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Friday, April 23, 2021

Compliance burden reduced for listed cos, but disclosures go up

The BRSR will be applicable to the top 1000 listed entities (by market capitalization), for reporting on a voluntary basis for FY 2021 – 22 and on a mandatory basis from FY 2022 – 23, the regulator said.

Written by Khushboo Narayan | New Delhi |
March 26, 2021 3:08:09 am

The Securities and Exchange Board of India (SEBI) has increased the disclosure requirements for listed firms while removing certain compliance requirements.

In a bid to enhance disclosure on ESG (environmental, social and governance standards) information, the Sebi board, in its meeting on Thursday, has introduced new requirements for sustainability reporting by listed companies. Under the new format, called the Business Responsibility and Sustainability Report (BRSR), companies have to share quantifiable yardsticks which will allow investors to compare them across companies, sectors and time periods.

The BRSR will be applicable to the top 1000 listed entities (by market capitalization), for reporting on a voluntary basis for FY 2021 – 22 and on a mandatory basis from FY 2022 – 23, the regulator said.

Among other tightened disclosure requirements, the regulator said that in cases where the board meetings of companies are held for more than one day, the financial results shall be disclosed within 30 minutes of end of the board meeting for the day on which the financial results are considered.

SEBI also said that when companies hold analyst or investor meetings, the audio/video recordings of such meetings should be share on their website and exchanges before the next trading day or within 24 hours, whichever is earlier. Further, companies have to disclose written transcripts of such meetings within five working days.

The regulator also said that companies have to disclose statements of investor complaints, corporate governance reports and shareholding patterns within 21 days of the end of a quarter.

Further, the top 1000 listed entities by market capitalisation have been asked to formulate a dividend distribution policy and constitute a risk management committee, an increase from the top 500 now.

The regulator has also eased the compliance burden. For e.g., listed companies no longer need to seek stock exchange approval to change their names. They no longer need to publish newspaper advertisements for the notice to board meetings where financial results are to be discussed and for quarterly statements on deviation or variation in use of funds.

In a bid to make the delisting process more transparent and efficient, the regulator has asked the promoter or acquire to disclose their intention to delist the company by making an initial public announcement. SEBI wants a panel of independent directors to examine the delisting proposal and provide their reasoned recommendations. It tweaked the timelines for the completion of various activities forming part of the delisting process to make the process more efficient. Further, SEBI has allowed the promoter or acquirer to specify an indicative price for delisting which shall not be less than the floor price. It also said that promoters will be bound to accept the price discovered through reverse book building if the same is equal to the floor price or indicative price.

The board also approved changes to norms which will make it easier for promoters wishing to reclassify themselves as non-promoters, especially if they are not in control or have a shareholding of less than 1 per cent.

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