Introduction  

Securities and Exchange board of India (SEBI) had amended the Infrastructure Investment Trust Regulations 2014 (InvIT regulations) through an amendment notification dated 17^th April 2026. Through this amendment, SEBI had clarified that the Special Purpose Vehicles (SPV) with expired or terminated concession agreements would also be considered as SPVs subject to certain conditions. However, the said conditions were not specified in the said amendment notification.  

Hence SEBI has now come out with the said conditions through a separate circular dated 15^th May 2026. This circular prescribes 2 conditions for treating companies/LLP with expired concession agreement as SPV. In this article we shall understand these conditions and implications thereof.  

Conditions prescribed under circular  

Through amendment dated 17^th April 2026, a proviso was inserted in the definition of SPV prescribed under reg 2(1)(zy) of InvIT regulations. As per this proviso, a SPV who has no infrastructure project  due to termination or expiry of concession agreement can also be treated as SPV subject to certain conditions specified by SEBI.  

The SEBI has specified following 2 conditions through circular dated 15^th May 2026.  

1. “The Investment Manager shall either exit investment in such SPV by way of sale / liquidation / winding-up / merger of such SPV, or acquire any new infrastructure project in such SPV, within one year from –  

(a) completion/termination of concession agreement or such other agreement of similar nature, or  

(b) conclusion of all pending claims/litigations/tax assessments and related appeals, or  

(c) completion of defect liability period,  

whichever is later.”  

AND  

2. “Till the time investment in such SPV is held by the InvIT, adequate disclosures shall be made in the annual report of the InvIT including the following –  

(a) InvIT Level: The Investment Manager shall disclose a detailed breakup of the value of investments (gross and net basis) in the SPV(s) wherein the concession agreement or such other agreement of similar nature has ended/terminated.  

(b) SPV Level: The Investment Manager shall provide additional disclosures pertaining to each SPV wherein the concession agreement or such other agreement of similar nature has ended/terminated, which shall include the following information:  

(1) Brief details of the project, date when such agreement ended and status of vesting certificate or any other document issued by the concessioning authority upon successful completion of handover of the project to the said authority.  

(2) Assets and Liabilities of the SPV (including specific reserves, if any): Provide the nature and amount of respective carrying value of assets and liabilities (including specific reserves, if any) on broad/grouped basis as determined in the annual audited financial statements of the SPV.  

(3) Contingent Liabilities: Details of Contingent Liabilities of the SPV as set out in its annual audited financial statements.  

(4) Debt Repayment: Brief details of outstanding debt of the SPV, if any, along with repayment schedule.  

(5) Whether SPV has sufficient assets to meet its liabilities (including contingent liabilities). If not, how such liabilities are planned to be met.  

(6) Exit Strategy and Timeline: A clear plan of action detailing how and when the InvIT intends to exit its investment in the SPV or plans to acquire new infrastructure project, along with the brief details of steps taken so far and expected timeline for completion.  

(7) Other Material Details: Other material details related to such SPV including details related to pending claims, pending litigations, pending assessments, pending statutory/contractual obligations, balance period of defect liability period, etc.”  

Analysis of conditions  

The first condition aims at solving the practical difficulty faced by InvITs in immediately exiting the investment in SPV due to pending claims, litigations, and other such matters. This condition prescribes a timeline within which the investment must be exited post settlement of all such contingent matters. Also, the condition provides multiple options for exiting investment and the circular also clarifies that the time taken in obtaining regulatory approvals in mergers/winding up/liquidation etc. would not be counted in the period of one year.  

Second condition provides a mechanism to ensure transparency through appropriate reporting to unit holders about the financial impact of holding investment in SPV with expired concession agreement and the exit plan for withdrawing such investment. This condition aims to ensure investor protection in the backdrop of practical changes made to bring ease of doing business.  

Points to be considered  

As per the second condition, the InvITs have to give detailed information relating to SPV with expired concession agreement in the annual report of InvIT. Since the circular is effective immediately, this information needs to be given in the annual report of Financial Year (FY) 2026 which is now in the process of finalization.  

As per regulation 23 of InvIT regulations, the annual report must be submitted till 30^th June. Now we are already standing in the month of May. Hence InvITs are in the process of finalizing their reports. In such a situation, if any InvIT has investment in any such SPV whose concession agreement has expired, it will have to first collate all the information listed in the circular and then will have to include the same in the annual report. Considering the shortage of time due to approaching last date, this may prove to be a tedious task. Also, the InvITs through their investment managers will have to finalize an exit plan with specified timelines as it has to be disclosed in the annual report as per the circular.

Conclusion  

The conditions prescribed by SEBI through the circular are not a total surprise, as they were already proposed through consultation paper dated 5^th February 2026, which proposed amendments to Invit regulations. Further, considering the ease of functioning this amendment and the subsequent circular is expected to bring, there should not arise any difficulty in its compliance.

The post Compliance Pertaining to Status of SPV with Expired Concession Agreements – SEBI Circular dt: May 15, 2026  first appeared on MMJC.

The Companies Act, 2013 offers two distinct exemptions that, when combined, create a legal paradox for intermediate holding companies. Specifically, if an intermediate holding company avails exemption from preparing Consolidated Financial Statements (CFS), does it inadvertently lose exemption from shareholders’ approval for Related Party Transactions provided under fourth proviso of Section 188(1)?

This article examines whether this literal interpretation, which creates an irreconcilable hurdle, can be reconciled through a purposive reading of the statutory framework.

Exemption From Consolidation

As per Section 129(3) of the Companies Act, 2013 r/w Rule 6 of the Companies (Accounts) Rules, 2014 (Accounts Rules), preparation of consolidated financial statements by a company is exempt if it meets the following conditions:

1. If Company is Wholly Owned Subsidiary or is a partially-owned subsidiary of another company and all its other members, including those not otherwise entitled to vote, having been intimated in writing for not objecting for consolidation and proof of the same is maintained by the Company;

2. No securities of Company are Listed or Proposed to be listed on any stock exchange, whether in India or outside India; and

3. its ultimate or any intermediate holding company files consolidated financial statements with the Registrar.

Exemption from Shareholders approval u/s 188

The fourth proviso to Section 188(1) exempts transactions between a holding company and its WOS from the requirement of shareholders’ approval. However, this relief is strictly conditional:

“…whose accounts are consolidated with such holding company and placed before the shareholders…”

Literal Rule V. Purposive Interpretation

The phrase “such holding company” in Section 188 indicates that for claiming said exemption, the consolidation must happen at the level of the company entering the transaction.

If we apply Literal Rule, the scenarios can be as follows:

· The Ultimate Parent (A Ltd): Since A Ltd prepares the CFS, any transaction between A Ltd and its step-down WOS (C Ltd) is exempt from shareholder approval. The accounts are consolidated at this level.

· The Intermediate Parent (B Ltd): If B Ltd enters into a transaction with its direct WOS (C Ltd), it faces a hurdle. Because B Ltd chose not to prepare CFS (relying on Rule 6), it cannot satisfy the condition that the accounts are “consolidated with such holding company” (B Ltd).

Purposive Interpretation

The purposive interpretation of the fourth proviso to Section 188(1) suggests that the legislative intent is to ensure transparency. If the ultimate parent consolidates the entire group, the underlying financial position of every subsidiary is already disclosed to the stakeholders who hold the actual economic interest.

Unlike Section 177, which protects creditors through Audit Committee oversight, Section 188 is purely shareholder centric. In a vertical structure, the ultimate shareholders already have “informed oversight” through the ultimate consolidation. Therefore, requiring an additional shareholder vote at the intermediate level offers no extra protection to shareholders. It therefore appears that intermediate holding companies can claim the exemption under the fourth proviso to Section 188(1)

Conclusion

The fourth proviso to Section 188(1) is not an independent requirement, but a consequential trigger. One may take a view that it does not exist to create a new obligation for consolidation; rather, it built upon the obligation created by Section 129 i.e. when consolidation is mandatory as per section 129.

The proviso uses the phrase “whose accounts are consolidated.” This refers to the financial statements that a company is legally mandated to prepare under the Accounting Rules1. If the law (Rule 6) provides a specific exemption from preparing CFS, then the legal “mandatory” requirement for consolidation at that level ceases to exist. If the obligation to consolidate is extinguished by an exemption, the subsequent condition (“and placed before shareholders”) loses its subject matter.

If the proviso were interpreted as an absolute factual requirement, then any company exempt under Rule 6 would be effectively disqualified from the RPT exemption. This would create a legislative absurdity. However, to ensure absolute certainty and avoid the risk of transactions being deemed voidable, an MCA clarification to this effect remains necessary.

By Abhishek Gupta and Vrushali Bhave Athavale

This article is published on taxguru link below.

https://taxguru.in/company-law/saving-consolidation-cost-rpt-approval.html

The post Does Saving on Consolidation Cost You an RPT Approval? first appeared on MMJC.

Regulatory Framework Governing Gifts to Shareholders: In corporate practice, companies have historically expressed appreciation towards their shareholders through souvenirs, coupons or other forms of small tokens. This was particularly common when physical shareholder meetings were regularly conducted prior to the COVID period in certain Indian promoter operated companies.

A frequently asked question is whether companies are permitted to distribute gifts to shareholders? The position under law is fact sensitive and not absolute. However, the regulatory framework places certain restrictions, particularly where gifts are distributed at or in connection with a general meeting, as such practices may raise concerns regarding influence on shareholder voting.

Accordingly, it becomes important to understand the regulatory position under the Companies Act, 2013 read with Secretarial Standard-2 on General Meetings.

Section 118(10) of the Companies Act, 2013 requires companies to comply with the Secretarial Standards issued by the Institute of Company Secretaries of India and Clause 14 of Secretarial Standard-2 provides that:

“No gifts, gift coupons, or cash in lieu of gifts shall be distributed to members at or in connection with the meeting.”

The intent behind this provision is rooted in corporate governance considerations. Distribution of gifts at the time of a general meeting may give rise to a perception that shareholders are being influenced while exercising their voting rights.

At the same time, the Guidance Note -2 on General Meetings issued by The Institute of Company Secretaries of India, to the aforementioned clarifies that certain practical aspects which are to be considered for companies are:

• The restriction primarily applies to gifts distributed at the meeting or in connection with the meeting.
• One of the key concerns is that such distribution may benefit only those shareholders who physically attend the meeting.
• Any benefit provided with the intention of influencing the decision of members may also fall within the scope of a prohibited gift.

However, the guidance also clarifies that certain practices would not be treated as prohibited gifts. These include provision of tea, coffee, snacks or light refreshments as a matter of courtesy at the meeting venue.

Regulatory Interpretation in Practice: A relevant regulatory example can be seen in the order passed by the Regional Director (Southern Region) in the matter of Madras Fertilizers Limited AGM Gift Card Case. In this matter, the company had issued SBI gift cards to minority shareholders during an AGM conducted through video conferencing. The company’s explanation was that the gift cards were provided in lieu of refreshments that would ordinarily have been served during a physical AGM.

Since the meeting was conducted during the COVID period, the company extended the gesture as a substitute for the refreshments that could not be provided in a virtual meeting. However, the authorities held that the company had violated Clause 14 of Secretarial Standard-2 on the basis that the gift cards were distributed in connection with the AGM.

Concerns Raised from a Governance Perspective: The Ministry of Corporate Affairs has also noted instances where companies distributed gifts, coupons or other benefits during AGMs. It was observed in certain representations that, in some cases, shareholders appeared more interested in collecting gifts or coupons than participating in the actual proceedings of the meeting. Concerns were also raised that such practices could dilute discussion on agenda items and proposed motions.

The Ministry emphasised that companies should refrain from distributing gifts or inducements during AGMs and that only light refreshments as a matter of courtesy may be provided. The underlying objective of this position is to ensure that the integrity of shareholder participation and voting is preserved.

Reading the Position: From the above, it can be understood that the restriction is not on gifting per se, but on gifting which is linked to the conduct of a general meeting.

The concern primarily appears to be on timing of the benefit; linkage with the meeting; and possibility of influence on shareholder decision making.

At the same time, it is also relevant to note that benefits which are extended uniformly and not linked to the meeting may not attract the same level of regulatory concern.

What is Allowed: While Secretarial Standard-2 restricts distribution of gifts in connection with meetings, it does not mean that companies are completely prohibited from extending benefits to shareholders.

Key compliance considerations from a practical standpoint, companies should keep the following aspects in mind:

• Gifts should not be distributed at or in connection with an AGM;
• Any benefit should not be linked to attendance, participation, or voting at a meeting;
• Promotional offers or coupons should be uniformly available to all shareholders;
• The purpose of any benefit should remain corporate goodwill rather than influencing shareholder decisions.

Intent Behind Allowing and Restricting Certain Practices: The distinction appears to be based on preserving the integrity of shareholder meetings. While companies are allowed to engage with shareholders and extend goodwill gestures, the law seeks to ensure that such gestures do not have any bearing, direct or indirect, on shareholder participation or voting at a general meeting.

Accordingly, what is restricted is not the act of gifting itself, but the possibility of such gifting being perceived as an inducement.

Conclusion:

The regulatory framework does not prohibit companies from expressing appreciation to their shareholders. However, it is important that such gestures remain clearly separated from the conduct of shareholder meetings and the exercise of voting rights.

The post Gifting to Shareholders – Courtesy or an Inducement in Disguise? first appeared on MMJC.

A. The Case of Coffee Day Enterprises Limited- Non-recognition of finance cost:

The SEBI Adjudication Order in the matter of Coffee Day Enterprises Limited (CDEL) serves as a stark reminder that internal certifications and affirmations, even those that never leave the organization’s walls, carry immense legal weight.

While certain documents (like financial results) are filed directly with Stock Exchanges, many critical affirmations are addressed internally to the Board of Directors, Audit Committee, or Compliance Officer as per the requirement of law. The CDEL case highlights that these internal “checks” must be handled with the same level of care as public filings, as they form the legal foundation upon which the integrity of the entire reporting system rests.

In the present matter, CDEL failed to recognize interest expenses on its borrowings based on the management’s expectations/ confidence for a future waiver and the assumption that providing for such interest would be misleading. This constituted a failure to adhere to Ind AS requirements for the preparation of financial statements and a failure to fulfil disclosure obligations.

The statutory auditors had highlighted this issue in audit qualifications in the reports for FY 2022-23 and 2023-24.

“Expectation” vs. Accrual:

The CDEL Order emphasizes that signatories must exercise “utmost care, skill and diligence” when providing these affirmations.

• Accrual Basis (Ind AS 1): Entities must strictly adhere to the accrual basis of accounting.

• Derecognition Criteria (Ind AS 109): A financial liability can only be removed from the balance sheet when it is extinguished, meaning the obligation is legally discharged, cancelled, or expires. Mere “negotiations” for a waiver do not meet this legal threshold.

• The Transparency Myth: CDEL argued that non-recognition of interest was transparently disclosed in the ‘Notes to Accounts’. SEBI clarified that disclosure is not a substitute for compliance. An internal certification stating that financials are compliant cannot be justified by a footnote that simultaneously admits to a departure from accounting standards.

B. The Case of Golden Tobacco Limited- Diversion through Subsidiaries:

The recent SEBI Adjudication Order in the matter of Golden Tobacco Limited (GTL) further reinforces these principles, particularly regarding the role of the CFO in certifying financials.

In this case, GTL advanced approximately Rs. 17,517.57 lakhs to its wholly owned subsidiary, Golden Realty Infrastructure Ltd (GRIL), purportedly for land development rights.

SEBI’s investigation revealed a complex web of fund transfers:

• Conduit Mechanism: GRIL, which had no commercial substance or revenue, acted as a conduit, transferring the majority of these funds to WGF Financial Services Ltd and General Exports and Credit Limited.

• Ultimate Beneficiaries: From these intermediaries, funds were further diverted to various promoter-related entities.

The CFO’s Accountability:

Similar to the CDEL case, the CFO of GTL was held liable for violating Regulation 17(8) and 33(2)(a) of SEBI (LODR) Regulations, 2015.

The CFO submitted in his reply that the decisions to grant advances were made by the Board before his appointment and that he merely followed management instructions. He claimed he was merely an employee working under the guidance of the Managing Director and was never part of the Board or the decision-making process regarding these advances.

He further contested that his salary did not change after his promotion to CFO and that there was no mens rea (guilty intention) on his part. He asserted that he issued the certifications in good faith, following the instructions of the management to save his employment.

SEBI concluded:

• Statutory Liability: SEBI ruled that the violation pertains to the act of certifying the financial results during his tenure. Even if the funds were transferred earlier, his signature affirmed that the current financial statements (FY 2015-16 to FY 2020-21) were “true and fair” despite the ongoing diversion.

• Irrelevance of Intent: The absence of mens-rea (guilty mind) or the fact that an employee followed orders does not absolve an officer from the breach of civil obligations under securities law.

• Misrepresentation: GTL continued to show these advances as outstanding assets in its annual reports for over a decade (FY 2009-10 to FY 2020-21), even though the funds had been diverted and the development projects were never approved by the Delhi Development Authority (DDA).

SEBI concluded that the CFO is mandated by law to ensure financial results do not contain false or misleading statements. Relying on “management instructions” does not absolve the officer of this duty.

C. Internal Affirmations: Substantive Obligations, Not Administrative Paperwork:

A primary takeaway from both the CDEL and GTL matters is that internal certifications, such as those issued under Regulation 17(8) of LODR, are not mere procedural formalities.

• The Responsibility of Integrity: These internal declarations affirm the integrity of financial systems. In CDEL, officials issued certifications despite failing to accrue interest expenses exceeding ₹489 crores. In GTL, the CFO certified financials while funds were being diverted to promoter-related entities through a subsidiary which resulted into misrepresentation as stated above.

• Personal Liability: SEBI held that these officers failed to ensure the integrity of reporting systems, resulting in personal penalties. Addressing an affirmation internally does not shield an officer from regulatory scrutiny if that affirmation is fundamentally flawed.

D. List of certifications:

Below is the illustrative list where such certifications by CEO/CFO or Board of Directors are required under LODR and Act:

E. Conclusion

The matters clearly emphasised that internal certifications may lose credibility where they are contradicted by explicit observations or qualifications recorded by statutory auditors, potentially raising concerns as to the robustness of the underlying financial reporting framework.Further, the burden may rest on the such official, CEO/ CFO etc, to demonstrate that reasonable care, due diligence, and independent verification were exercised prior to issuing such certifications. Every certification required under LODR or the Act must move beyond a “checkbox” approach. Ensuring exercise of professional scepticism is an essential.

 Coffee Day Enterprises Limited: https://www.sebi.gov.in/enforcement/orders/mar-2026/adjudication-order-in-the-matter-of-financial-mis-statements-of-coffee-day-enterprises-limited_100080.html 

and Golden Tobacco Limited: https://www.sebi.gov.in/enforcement/orders/apr-2026/adjudication-order-in-the-matter-of-golden-tobacco-limited_101125.html 

 Abbreviations:

SEBI- The Securities Exchange Board of India

LODR- Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 

CEO- Chief Executive Officer

CFO- Chief Financial Officer

Ind AS- Indian Accounting Standards

FY- Financial Year

CSR- Corporate Social Responsibility

RPT- Related Party Transactions

The post The Critical Weight of Internal Affirmations: Lessons from the SEBI Adjudication Orders first appeared on MMJC.

INTRODUCTION

Capital market does a very important function in any economy, that is distributing capital to most deserving enterprises. In journey of India towards Viksit Bharat ensuring that capital is distributed wisely is very vital aspect. Securities and Exchange Board of India [SEBI] has been taking path breaking steps in that direction. And in this journey SEBI has been relying on Company Secretaries as very important stakeholder.

There are following trends –

1. Ease of raising funds
2. Ease of compliance and disclosures
3. Strengthening governance
4. Curb wrong companies getting capital market access
5. Tight enforcement

Ease of raising funds and discovery of market price

Over last four years [‘2021-22 till 2023-24’], SEBI could successfully reduce the time taken for listing in public issue from T+6 days to T+3 days, where ‘T’ denotes date of closures of the issue[1]. Trade settlement days brought down from T+2 to T+0 in phased manner[2]. As a result, total number of companies raising funds via Initial Public Offer [‘IPO’] increased from 55 in 2020-21 to 272 in 2023-24 in last four years[3] and total market capital of Indian listed companies raised from ₹ 29,365,732.90 as on March 2022 to ₹441,83,829.51 as on March 2025[4].

(Image 1: Number of IPOs and Funds Raised from year 2020-21 to 2023-24)

Total number of days for non-fast track rights issue got reduced from 317 days to 23 as a result total 40+ companies came out with rights issue and could raise ₹ 9303 crore in a span of 65 days. This is a record.

In last 7 years number of people penalised under Securities and Exchange Boad of India [Prohibition of Insider Trading] Regulation, 2015 [‘SEBI PIT’] has gone close to 500 out of that around 130+ have been debarred from capital market, levied penalty of ₹ 600 crore + and many CXOs had to compromise their position. These enforcement and changes in law has contributed for improvement in hygiene of secondary market transaction and overall improvement of healthy price discovery mechanism.

Collectively these initiatives contribute eliminating or minimising any undue interference in price discovery and thereby ensuring right distribution of capital to deserving companies. This clearly indicates that capital raise, capital distribution and capital deployment all of it has increased by multi times and it has resulted in wealth creation for 12.5 crore investors in India[5].

This clearly indicates that company secretaries contributing to IPO/ Rights Issue / Employee Stock Option Plan [‘ESOP’] will have great opportunity. Practising Company Secretaries [’PCS’] and company secretaries in employment both will have great area of specialisation in this. Transformation of company from unlisted to listed is a challenging step and therefor professionals helping companies to achieve this seamlessly will have great opportunity to contribute. And helping listed companies to have robust mechanisms to ensure adherence to SEBI PIT regulations is equal opportunity to contribute in this endeavour of SEBI.

Wrong Companies 

Though we saw some instances like Gensol Engineering Ltd, overall number of such cases have seen decline in numbers. SEBI and stock exchanges have returned many offer documents in last few years to ensure basic hygiene about companies approaching capital market. One should not ignore these efforts which have contributed to overall capital market development and improvement in quality of companies planning for IPO.

In last few years we have also seen eligibility norms for Smal and Medium Enterprises Initial Public Offer [‘SME IPO’] undergoing major change and there by resulting in IPO size of SME IPO getting raised from ₹5 – ₹10 crore to more than ₹25 crore in recent times. On an average, companies making higher profits and more sustainability are approaching for SME IPO. Though this is perceived not the good news for smaller SMEs, it helps market reach equilibrium. Recently SEBI has done lot of changes in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 [‘SEBI LODR’] to make many governance provisions appliable to even smaller companies. Though this may be perceived as higher compliance norms, it is important in overall scheme of things of building trust of retail investors in capital market.

Company Secretary both in employment or practice [‘CS’] has great opportunity for preparing companies to knock the door of capital market and unlock wealth. CS is a guide for corporates to prepare for IPO, and opportunity in preparing companies is equally valuable as helping companies to go for IPO. CS also shoulders a responsibility to warn promoter and protect them from going in wrong direction.

Strengthening Disclosure Requirements

In last 3 years 26 changes have happened in regulation 30 and schedule III of SEBI LODR. 11 consultation papers got released from SEBI in last three years to listen to ecosystem and market towards strengthening of disclosures under SEBI LODR. Industry Standards Forum [ISF’] released 3 to 4 documents to strengthen disclosure standards followed by Indian inc.

This disclosure requirements might have created information overload for some time, but over a period, probably, it will help to enhance maturity about understanding of company amongst investors and culture of compliance will get deeper, wider. This will be a game changer and also build trust amongst investors about corporates.

In last one-year overall ease towards disclosures has enhanced as a result of single window upload facility to companies [when it comes to disclosure of details on stock exchange is concerned]. Overall consolidation of disclosure timings and curating data about listed companies of regulators portal brings lot of ease both to corporates and investors. It is a role of CS to ensure that this ease is communicated well to the important stakeholders.

Disclosure is a compliance, but it is essentially the tool for investor to take informed decision and opportunity for corporate to get stakeholders alignment. Therefore, disclosure should not be considered as burden but a platform and an opportunity for getting investors alignment and also to distinguish itself with others in market.

Opportunities for CS and PCS

SEBI wide amendment dated December 12, 2024, to SEBI LODR has validated that compliance officer should be at one level below Board of Directors and thereby raising bar of company secretaries who are functioning as compliance officer in listed companies. Same amendment has also placed secretarial auditor at par with statutory auditors in many parameters. This will have far reaching implications and will strengthen the position of CS in corporate and PCS in overall landscape of governance in India. Now it is our responsibility to invest in self and occupy that position to serve best interest of nation.

Conclusion .

Overall, width and depth of capital market is growing. Many investors are betting on Indian capital market and Indian enterprises. Indian enterprises are also coming forward to take them to next orbit and unlock value. Role CS is unique in this value unlocking and good governance journey. Next 25 years are going to be crucial and game changer for this profession. Let’s try to optimise it and contribute fullest

[1] https://www.sebi.gov.in/legal/circulars/aug-2023/reduction-of-timeline-for-listing-of-shares-in-public-issue-from-existing-t-6-days-to-t-3-days_75122.html

[2] https://www.sebi.gov.in/media-and-notifications/press-releases/sep-2024/sebi-board-meeting_87154.html  

[3] https://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListing=yes&sid=4&ssid=80&smid=101

[4] https://www.bseindia.com/markets/equity/EQReports/allindiamktcap.aspx

[5] https://www.moneycontrol.com/news/business/markets/retail-power-retail-holdings-rise-more-than-10x-over-the-last-decade-12901840.html

The post Reflection on Regulatory Changes in Capital Market and Role of Company Secretary first appeared on MMJC.

Background

With the rapid growth of social media usage in the securities market, instances of misleading and unverified content have also increased. Investors often find it difficult to distinguish between content posted by SEBI-registered entities and that circulated by unregistered persons. This often results into investors losing their hard earned money at the hands of fraudsters. Taking cognisance of this SEBI has issued a circular dt: February 26, 2026 [‘February circular’] in this regard.

In this article we will try to understand the applicability of this circular, pre-dominantly to Infrastructure Investment Trusts (InVITs), Real Estate Investment Trusts (ReITs) and the compliances to be undertaken by them.

Applicability

As per clause 3 of the February circular, it is applicable to all persons regulated by the SEBI as defined under explanation 1 to regulation 16A of SEBI Intermediaries Regulations 20081. As per this definition, this circular is applicable to all market intermediaries, InVITs, ReITs as well as to the trustees and investment managers of INVITs and REITs.

Importantly, the requirements also extend to agents of such regulated entities, including mutual fund distributors and other authorised intermediaries.

However, a point worth noting is that this circular is silent about applicability to individuals like directors, KMPs, compliance officers etc. associated with the entities listed above.

Key Requirements

SEBI has mandated that regulated entities and their agents must prominently disclose their SEBI registered name and registration number:

• On the home page of their social media handles; and

• At the beginning of each video or content related to the securities market.

In cases where an entity holds multiple SEBI registrations, a web link listing all registrations must be provided on the home page, and details of that particular registration, in capacity of which the content is being shared, must be disclosed at the beginning of each specific content.

In case of agents, the additional requirement is that, they must disclose their own registration details in the manner specified above, and in addition to that, they should

also disclose the registration details of that regulated entity for whom they are acting as agent.

This disclosure requirement applies to all securities market-related content posted on social media platforms such as YouTube, Instagram, Facebook, WhatsApp, X, LinkedIn, Telegram, Reddit and similar platforms, including content shared in closed groups. One point worth noting here is that, The list of social media platforms provided in the circular is illustrative and the disclosure requirements can also apply to other social media platforms not listed in the circular.

For example,

If an entity is registered as INVIT and it is desirous of posting any securities market related content on any of its social media handle, then the home page of that entity’s social media account as well as the content itself should contain the registered name and registration number of that INVIT. Further, if the investment manager is posting any security market related content on its own social media account in the capacity of agent of INVIT, then it has to disclose its own registration details as well as the details of the INVIT on whose behalf the content is being posted.

Effective Date

The provisions of the circular will come into effect from May 1, 2026, and will apply to all securities market related content uploaded on or after that date.

Conclusion

This circular reinforces SEBI’s focus on transparency and investor protection in the digital space. Regulated entities, including InvITs and REITs, must now align their social media practices with these disclosure norms to ensure clear identification of authentic market participants and to mitigate the risk of misuse of their names on online platforms.

The post SEBI Mandates Disclosure of Registration Details on Social Media Platforms by SEBI registered entities. first appeared on MMJC.