Frequently asked questions on BSE and NSE circular dt: October 18, 2024, regarding certification of SDD maintenance - MMJC

Applicability of SDD compliance certificate:

1. Whether listed entities to whom reg. 24A of SEBI (LODR) [viz. submitting Annual Secretarial Compliance Report [‘ASCR’]] are applicable are required to submit separate certificate on maintenance of Structural Digital Database [‘SDD’] every quarter?

No. Listed entities to whom corporate governance provisions are applicable have to confirm SDD maintenance in ASCR.

2. Whether SDD certificate would still be applicable for real estate investments trusts [‘REIT’], Infrastructure Investments Trust [‘InvIT’], and exclusively debt listed entities?

BSE and NSE circular dt: October 18, 2024, [‘October 2024 circular’] listed entities to whom reg. 24A of SEBI (LODR) [viz. submitting ASCR’] are not applicable are required to submit certificate for maintenance of SDD within 60 days from end of financial year. For exclusively debt listed entities that are not high value debt listed entities reg 24A would not be applicable. Hence for exclusively debt listed entities SDD compliance certificate will be given at the end of financial year in the specified format.

For real estate investments trust and infrastructure investments trust reg.24A of SEBI (LODR) is not applicable. Further ASCR format for REIT and InvITs does not have a specific confirmation for compliance with SDD under SEBI (PIT)[i]. Hence REITs, InvITs, and exclusive debt listed entities will have to submit SDD maintenance certificate within 60 days from end of financial year in the format as prescribed under October 2024 circular.

3. Whether listed entities to whom reg. 24A of SEBI (LODR) [viz. submitting ASCR’] are not applicable are required to submit separate certificate on maintenance of Structural Digital Database [‘SDD’] every quarter?

Yes. Listed entities to whom corporate governance provisions are not applicable have to submit SDD maintenance certificate within 60 days of end of financial year in the format as prescribed under October 2024 circular.

4. Whether listed entities to whom reg. 24A of SEBI (LODR) [viz. submitting ASCR’] are not applicable are required to submit separate certificate on maintenance of Structural Digital Database [‘SDD’] for quarter ended December 2024?

As per October 2024 circular listed entities to whom corporate governance provisions are not applicable are required to submit certificate for maintenance of SDD within 60 days from end of financial year. Further vide October 2024 circular, all previous circular[ii] relating to maintenance of SDD are rescinded with immediate effect. So, SDD certificate now needs to be submitted by listed entities to whom corporate governance provisions are not applicable within sixty days end of financial year 2025. Quarterly SDD compliance certificate for quarter ended December 2024 need not be submitted.

Format of SDD compliance certificate:

1. Can SDD certificate be given by compliance officer of listed entity instead of practising company secretary?

SDD compliance certificate by listed entity now needs to be given by a practising company secretary only. Compliance certificate from a compliance officer will not do.

2. Is there any change in the format of SDD certificate?

No there is no change in the format of SDD certificate required to be submitted to stock exchange pursuant to October 2024 circular.

Non-Maintenance of SDD:

1. Non-maintenance of SDD will now require comments from board of directors. Is it also necessary to place it before audit committee of listed entity prior to placing it before board of directors?

As per regulation 9(4) read with schedule B Point 1, audit committee of listed entity shall review compliance with provisions of these regulations atleast once in a financial year and shall verify that the systems for internal controls are adequate and are operating effectively. Hence even if it is mentioned in the October 2024 circular that board of directors shall comment on the non-maintenance of SDD it is necessary that the matter shall be placed before audit committee of listed entity before placing it in front of board of directors.

2. If the PCS certification for financial year or annual secretarial compliance report states that listed entity is non-compliant with SDD then what is further course of action for listed entity?

Once it is certified that listed entity is SDD non-compliant then listed entity will have to take measures to ensure that SDD compliance is done. This matter of non-maintenance of SDD will have to be placed before audit committee and board of directors of listed entity. Listed entity will then have to submit quarterly SDD compliance certificate to stock exchange certifying that SDD compliance is done. Post this the listed entity can submit SDD compliance certificate for financial year.

E.g. If SDD certificate for financial year ended 24-25 states that listed entity was non-compliant with SDD then listed entity will have to submit SDD certificate for June quarter mentioning whether SDD compliance has been done? Once compliance is done SDD certificate will be required to be filed for financial year 25-26 and not for subsequent quarter.

3. What are the consequences of non-maintenance of SDD?

In case a listed entity is non-compliant with SDD, the Exchange will take below action within 30 days from the due date of submission of certificate by PCS:

1. Under the “Get Quote” page of the Exchange Website of the Listed Entity, wherever listed, would display that the company is non-compliant with SDD along with the name of the compliance officer, till the time company is compliant.
2. The Exchanges will not provide any further Listing Approval except bonus and split.

SDD compliance certificate for proposed to be listed entities:

1. In case of proposed to be listed entities when is SDD confirmation is necessary and in which format?

In case of entities proposed to be listed a certificate from a Practicing Company Secretary confirming SDD compliance shall be submitted at the time of submission of offer document. Term ‘offer document’ is defined under reg 2(1)(kk) of SEBI (ICDR)[iii]. Entities proposing to list securities will have to submit SDD maintenance compliance certificate at the time of red herring prospectus, prospectus and shelf prospectus.  

2. In case of entities who have already filed their red herring prospectus, prospectus or shelf prospectus before October 2024 circular coming into effect will they have to submit SDD certificate now?

Entities who already have filed their offer documents or draft red herring prospectus will have to submit SDD certificate as follows:

Category of entities	When to file SDD compliance certificate
Entities who have filed DRHP but are yet to file RHP	SDD compliance certificate needs to be submitted at the time of filing RHP
Entities who are already listed before October 2024 circular coming into effect	SDD compliance certificate needs to be submitted within 60 days from end of financial year 24-25.
Entities who have filed their RHP but are yet to get listed	SDD compliance certificate needs to be submitted within 60 days from end of financial year 24-25.

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[i] Reg. 26G of SEBI (InvIT) Regulations, 2014 read with SEBI Master circular of InvITs – Annexure 14 – https://www.sebi.gov.in/legal/master-circulars/may-2024/master-circular-for-infrastructure-investment-trusts-invits-_83376.html

[ii] circular No. 20221028-15 dated October 28, 2022, circular No. 20221104-37 dated November 04, 2022, Circular No. 20230125-9 dated January 25, 2023, Circular No. 20230329-20 dated March 29, 2023

[iii] offer  document”  means  a  red  herring  prospectus,  prospectus  or  shelf  prospectus,  as applicable, referred to under the Companies Act, 2013, in case of a public issue, and a letter of offer in case of a rights issue.