Consultation Paper on measures towards Ease of Doing Business and streamlining compliance requirements for Non- Convertible securities – review of LODR Regulations
Background
Consultation paper on alignment of compliances of debt listed entities with equity listed entities
Annexure I
The recommendations as mentioned above are presented in comparative format against existing provision for better understanding :
Regulation | Existing Provision under LODR regulation | Proposed Provision under LODR regulation |
Signing of financial results | Reg. 52(2)(b) The listed entity shall comply with following requirements with respect to preparation, approval, authentication and publication of annual and quarterly financial results: (b) The quarterly results shall be taken on record by the board of directors and signed by the managing director/ executive director” | Replacing the existing provision under Reg, 52(2)(b) with below referred provision: The quarterly financial results submitted shall be approved by the board of directors. Further, the financial results submitted to the stock exchange shall be signed by the chairperson or managing director, or a whole time director or in the absence of all of them; it shall be signed by any other director of the listed entity who is duly authorized by the board of directors to sign the financial results. |
Definition of fraud | Clause A.17 of Part-B of Schedule III reads as under: “Fraud/ defaults by promoter or key managerial personnel or director or employees of listed entity or by listed entity or arrest of key managerial personnel or promoter” | Replacing clause A point 17 Part B Schedule III provisions with one referred below: “Fraud or defaults by a listed entity, its promoter, director, key managerial personnel, senior management or subsidiary or arrest of key managerial personnel, senior management, promoter or director of the listed entity, whether occurred within India or abroad For the purpose of this sub-paragraph: (i) ‘Fraud’ shall include fraud as defined under Regulation 2(1)(c) of Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003. (ii) ‘Default’ shall mean non-payment of the interest or principal amount in full on the date when the debt has become due and payable. Explanation 1- In case of revolving facilities like cash credit, an entity would be considered to be in ‘default’ if the outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for more than thirty days. Explanation 2- Default by a promoter, director, key managerial personnel, senior management, subsidiary shall mean default which has or may have an impact on the listed entity.” |
Timeline for intimation of record date | “(1) The listed entity shall fix a record date for purposes of payment of interest, dividend and payment of redemption or repayment amount or for such other purposes as specified by the stock exchange. (2) The listed entity shall give notice in advance of at least seven working days (excluding the date of intimation and the record date) to the recognised stock exchange(s) of the record date or of as many days as the stock exchange(s) may agree to or require specifying the purpose of the record date.” | “(1) The listed entity shall fix a record date for purposes of payment of interest, dividend and payment of redemption or repayment amount or for such other purposes as specified by the stock exchange. (2) The listed entity shall give notice in advance of at least three working days (excluding the date of intimation and the record date) to the recognised stock exchange(s) of the record date or of as many days as the stock exchange(s) may agree to or require specifying the purpose of the record date.” |
Filings of disclosures made by listed entities | Fillings made in XBRL and PDF format | Filings to be made in XBRL format only except for financial results. |
Relaxation in listing of ISIN. | Clause 1.1 of Chapter VIII of NCS Master Circular reads as under: “1. In respect of private placement of debt securities, the following shall be complied with regard to ISINs, utilised to issue debt securities from April 1, 2023: 1.1 A maximum number of fourteen ISINs maturing in any financial year shall be allowed for an issuer of debt securities. In addition, a further six ISINs shall also be available for the issuance of the capital gains tax debt securities…………” | Unlisted ISINs outstanding as on December 31, 2023 being converted to listed ISINs subsequent to introduction of Regulation 62A of the LODR Regulation to be exempted for the purpose of computation of the limit of 14 ISINs specified in clause 1 of Chapter VIII of the NCS Master Circular |