SEBI LISTING
REGULATIONS “COMMON OBLIGATIONS OF LISTED ENTITIES”
SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (Listing
Regulations)
Presently, a private agreement between Stock Exchange and
listed company govern all listing obligation and disclosure requirement. This
listing agreement like any other agreement among parties creates civil
obligation in case of any violation of the agreement.
Now, Securities and Exchange Board of India took direct
regulatory role over the listed entities in India. Securities and Exchange
Board of India notified in official gazette its SEBI (Listing Obligation and
Disclosure Requirements) Regulations, 2015 on 2nd September 2015.
Date
of Publication in Official Gazette: September
2, 2015
Date of Applicability: December
1, 2015
APPLICABILITY OF THE REGULATIONS:-
Any listed Entity who has following [1]Designated
Security Listed on any [2]Recognize
Stock Exchange:
a) Specified
Securities Listed On:
·
Main Board
·
SME Exchange
·
Institutional Trading Platform
b) Non-convertible
debt securities
c) Non-convertible
redeemable preference shares
d) Perpetual
debt instrument
e) Perpetual
non-cumulative preference shares
f) Indian
depository receipts
g) Securitized
debt instruments
h) Units
issued by mutual funds
i) Any
other securities as may be specified by the Board
5. COMMON OBLIGATIONS OF LISTED ENTITIES:
The
listed entity shall ensure that [3]Key
Managerial Personnel, Directors, [4]Promoters
or [5]Any
Other Person dealing with the listed entity, complies with responsibilities or
obligations, if any,
assigned to them under these regulations.
6. COMPLIANCE OFFICER AND HIS OBLIGATIONS:-
A listed entity shall appoint a qualified [6]Company Secretary as the
Compliance Officer. It is mandatory for listed entity to Appoint Company Secretary as Compliance
Officer.
Responsibility of Compliance Officer:
1.
Coordinator:
Co-ordination with and Reporting to following below mention with respect
to compliance with rules, Regulations and other directives of these authorities
in manner as specified from time to time:
·
Board of Directors
·
Recognize Stock Exchange
2. Ensuring
conformity with the regulatory provisions applicable to the Listed
Entity in letter and spirit.
3. Correctness
of Information, Statements and Reports filed by the Listed
Entity: Ensuring that the
correct procedures have been followed that would result in the Correctness, Authenticity
and Comprehensiveness of the Information, Statements and Reports filed by
the Listed Entity under these regulations.
4. Grievance
Redressal Division: Monitoring email address of Grievance
Redressal division as designated by the listed entity for the purpose of
registering complaints by investors.
Non-applicability of
provision of Compliance Officer:
·
The requirements of this regulation
shall not be applicable in the case of units issued by mutual funds which are
listed on recognized stock exchange(s).
But same shall be governed by the provisions of the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996.
CLARITY:
It is
clear that from the SEBI (LODR) responsibility of Company Secretary has been
increased. Like: It is responsibility of the company secretary to ensure that
the entity is in compliance with all the regulatory provisions applicable on
the Company, that correct procedure has been followed for the information,
statement and the reports filed by the listed entity under these regulations.
7. SHARE TRANSFER AGENT:-
The listed entity shall appoint a Share Transfer Agent or Manage the Share
Transfer Facility In-House. The listed entity shall ensure that all activities
in relation to both physical and electronic share transfer facility are
maintained either in house or by Registrar to an issue and share transfer agent
registered with the Board.
Ø
Mandatory Requirement to appoint Share Transfer Agent:
Company can manage in house Share Transfer Facility. But AS AND WHEN THE
TOTAL NUMBER OF HOLDERS OF SECURITIES
OF THE LISTED ENTITY EXCEEDS ONE LAC,
the listed entity shall either appoint Registrar to an issue and share
transfer agent registered with the Board or register with the Board as a
Category II share transfer agent.
Ø
Submission a Compliance Certificate to the Exchange:
·
The listed entity shall submit a
compliance certificate to the exchange signed
by both the Compliance Officer of the listed entity and the Authorized
Representative of the share transfer agent.
·
The listed entity shall submit within One Month of end of each
half of the financial year, certifying compliance with the requirements of sub-
regulation (2).
Ø
Alteration in Share Transfer Agent:
In case of any change or appointment of a new share transfer agent, the
listed entity shall enter into a TRIPARTITE AGREEMENT between
ü
Existing Share Transfer Agent; and
ü New
Share Transfer Agent; and
ü Listed
Entity
In case the existing share transfer facility is managed in-house, the
agreement referred above shall be entered into between
ü
Listed Entity; and
ü
New share Transfer Agent
Ø
Intimation to Board of Director:
The copy of Agreement will be placed before the Board of Directors in subsequent Board Meeting of the
Company.
Ø
Intimation to Stock Exchange:
The Listed entity shall intimate such appointment, to the Stock
Exchange(s) within 7 (Seven) days on entering into agreement.
Ø
Non-applicability of provision of Compliance Officer:
·
The requirements of this regulation
shall not be applicable in the case of units issued by mutual funds which are
listed on recognized stock exchange(s).
8. CO-OPERATION WITH INTERMEDIARIES REGISTERED WITH THE BOARD:
The listed entity,
wherever applicable, shall co-operate
with and submit correct and adequate information to the intermediaries
registered with the Board (such as given below) within timelines and procedures
specified under the Act, regulations and circulars issued there under:
ü Credit
Rating Agencies;
ü Registrar
to an Issue and Share Transfer Agents;
ü Debenture
Trustee; etc.
Non-applicability of
provision of Compliance Officer:
The requirements of this regulation shall not be
applicable in the case of units issued by mutual funds which are listed on
recognized stock exchange(s).Exchange Board of India (Mutual Funds)
Regulations, 1996 shall be applicable.
9. PRESERVATION OF DOCUMENTS :
The listed entity shall have a POLICY for preservation
of documents, approved by its board of directors. Listed entity may keep
documents in electronic mode. Company will classifying them in at least Two categories
as follows-
Documents whose preservation shall be PERMANENT IN NATURE ;
|
Documents with preservation period of NOT LESS THAN EIGHT YEARS after completion
of the relevant transactions
|
10.
FILING OF INFORMATION:
ü The
listed entity shall file the reports, statements, documents, filings and any
other information with the recognized stock exchange(s) on the Electronic Platform as specified by the Board or the
recognized stock exchange(s).
ü The
listed entity shall put in place infrastructure as required for compliance with
sub-regulation (1).
11.
APPLICABILITY OF SCHEME OF ARRANGEMENT:
The listed entity shall ensure that any scheme of arrangement
/amalgamation /merger /reconstruction /reduction of capital etc. to be presented
to any Court or Tribunal does not in any way violate, override or limit the
provisions of securities laws or requirements of the stock exchange(s).
12. PAYMENT OF DIVIDEND OR INTEREST OR REDEMPTION OR REPAYMENT:-
Modes for Payment:
The listed entity shall use any of the electronic mode of payment facility
approved by the Reserve Bank of India, in the manner specified in Schedule I, for the payment of
the following:
i.
PAYMENT OF DIVIDEND OR INTEREST OR REDEMPTION OR REPAYMENT:-
ii.
Dividend
iii.
Interest
iv.
Redemption or Repayment of amounts
Modes of Payment if Electronic mode is not possible: Where
it is not possible to use electronic mode of payment then payment can be made
by following:
i.
‘Payable-at-Par’
Warrants
ii.
Cheques
Note:
Where the amount payable as dividend exceeds one thousand and five
hundred rupees, the ‘payable-at-par’ warrants or cheques shall be sent by Speed Post.
13. GRIEVANCE REDRESSAL MECHANISH:-
§ The
listed entity shall ensure that Adequate
Steps Are Taken for expeditious redressal of investor complaints.
Registration
of Company: The listed entity shall ensure that it is registered
on the SCORES platform or such other electronic platform or system of the Board
as shall be mandated from time to time, in order to handle investor complaints
electronically in the manner specified by the Board.
Reporting
with Stock Exchange:
§ The
listed entity shall file with the recognized stock exchange(s) on a QUARTERLY BASIS,
§ within twenty one days from the end of
each quarter,
§ a
statement giving
·
The number of investor complaints
pending at the beginning of the quarter,
·
Those received during the quarter,
·
Disposed of during the quarter and
·
Those remaining unresolved at the end
of the quarter.
Reporting
to Board of Director:
The above mention statement shall be placed, on Quarterly Basis, before
the board of directors of the listed entity.
14. FEES AND OTHER CHARGES TO BE PAID TO THE RECOGNIZED STOCK EXCHANGE(S):-
The listed entity shall pay all such fees or charges, as applicable, to
the recognized stock exchange(s), in the manner specified by the Board or the recognized
stock exchange(s).
CONCLUSION:
Above given are the 10 (Ten) Common Obligation on Listed Companies as per
List SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The above given regulation are applicable on each and every security issued by
listed entity. Security Specific Obligation on Listed Company will discuss in
my Next Article.
Requirement of
Intimation to Stock Exchange as per Regulation No. 5 – 14:
S. No.
|
Regulation No.
|
Particular of Regulation
|
Time Period of filing of
Certificate
|
1.
|
7(3)
|
The listed
entity shall submit a compliance certificate to the exchange signed by both
the compliance officer of the listed entity and the authorized representative
of the share transfer agent
|
The listed
entity shall submit within one month of end of each half of the financial
year
|
2.
|
7(5)
|
In case of any
change or appointment of a new share transfer agent, the listed entity shall
enter into a TRIPARTITE AGREEMENT. The Listed entity shall intimate
such appointment, to the Stock Exchange(s).
|
Intimation within 7 (Seven) days on entering into agreement
|
3.
|
10(1)
|
The listed
entity shall file the reports, statements, documents, filings and any other
information with the recognised stock exchange(s) on the electronic platform
as specified by the Board or the recognized stock exchange(s)
|
As specivied with Board and recognized stock exchange.
|
4.
|
13(3)
|
The listed entity shall file with the recognized
stock exchange(s) on a QUARTERLY
BASIS
·
statement giving
·
The number of investor complaints
pending at the beginning of the quarter,
·
Those received during the quarter,
·
Disposed of during the quarter and
·
Those remaining unresolved at the end
of the quarter
|
Within 21 days (Twenty
One days) from the end of each quarter
|
Requirement of
Intimation to Board of Directors in Regulation No. 5 – 14:
S. No.
|
Regulation No.
|
Particular of Regulation
|
Time Period of filing of
Certificate
|
1.
|
7(6)
|
In case of any
change or appointment of a new share transfer agent, the listed entity shall
enter into a TRIPARTITE AGREEMENT. The copy of same placed before the Board of
Directors.
|
In Subsequent
Board Meeting of the Company
|
2.
|
13(4)
|
The listed entity shall placed before Board of
Directors:
·
statement giving
·
The number of investor complaints
pending at the beginning of the quarter,
·
Those received during the quarter,
·
Disposed of during the quarter and
Those remaining unresolved
at the end of the quarter
|
Place on Quarterly
Basis, before the Board of Directors of the listed entity
|
3Promoter:
“Promoter” includes:
(i) the
person or persons who are in control of the issuer;
(ii) the
person or persons who are instrumental in the formulation of a plan or
programme pursuant to which specified securities are offered to public;
(iii)
the person or persons named in
the offer document as promoters:
A director or officer of the issuer or a person shall not be
deemed as a promoter, if such director or officer or person is acting as such
merely in his professional capacity. A financial institution, scheduled bank,
foreign portfolio investor other than Category III foreign portfolio investor, and
mutual fund shall not be deemed to be a promoter merely by virtue of the fact
that ten percent or more of the equity share capacity of the issuer is held by
such person. A financial institution, scheduled bank and foreign portfolio
investor other than Category III foreign portfolio investor shall be treated as
promoter for the subsidiaries or companies promoted by them or for mutual fund
sponsored by them.
CONCLUSION:
The alignment of the Listing Regulations with the Companies
Act 2013 is a step in the right direction by SEBI and will go a long way in
removing the ambiguity and confusion with respect to the Listing Regulations.
Further, consolidation of different provisions of the listing agreements with
respect to different securities is also a positive step and will ensure ease
for companies who intend to list themselves on various stock exchanges.
(Author – CS Divesh Goyal, GOYAL DIVESH &
ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at
csdiveshgoyal@gmail.com)
Disclaimer: The entire contents of this document
have been prepared on the basis of relevant provisions and as per the
information existing at the time of the preparation. The observations of the
author are personal view
and the authors do not take responsibility of the same and this cannot be
quoted before any authority without the written
[1] Specified
securities, non-convertible debt securities, non-convertible redeemable
preference shares, perpetual debt instrument, perpetual non-cumulative
preference shares, Indian depository receipts, securitized debt instruments,
units issued by mutual funds and any other securities as may be specified by
the Board. [Regulation 2(1) (h) of SEBI (LODR) Regulations, 2015]
[2]
As per “The Securities Contracts (Regulation) Act, 1956, “Recognized Stock
Exchange [Section 2(f)] means a stock exchange which is for the time being
recognized by the Central Government under Section 4 of the Act.
[3] Section 2(51) of Companies Act, 2013“key managerial personnel”, in
relation to a company, means—
(i) the Chief Executive Officer or the managing director or the
manager; (ii) the company
secretary; (iii) the whole-time
director; (iv) the Chief
Financial Officer; and (v) such
other officer as may be prescribed;
[4] (w)"promoter" and
"promoter group" shall have the same meaning as assigned to them
respectively in clauses (za) and (zb) of sub-regulation (1) of regulation 2 of
the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009- Define at the
end of the Article.
[5] Compliance Officer, Debenture Trustee, Security
Holder, Stock Exchange
[6] Company Secretary or
secretary means a company secretary as defined in clause (c) of sub-section (1)
of section 2 of the Company Secretaries Act, 1980 who is appointed by a company
to perform the functions of a Company Secretary under this Act;
As per Company Secretary Act,
"Company Secretary" means a person who is a member of the Institute
of Company Secretary of INDIA
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