Sebi has decided to grant relaxations from compliance stipulations specified under the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015, (LODR) to listed entities.
The Securities and Exchange Board of India (Sebi) on Thursday relaxed several compliance norms and allowed listed companies to file their quarterly and annual financial results by June 30, 2020. According to the market regulator, developments arising due to the coronavirus spread warranted the need for temporary easing in compliance requirements for the listed entities.
Market participants have welcomed the move. “It’s possible that the next step by Sebi will be to nudge companies into disclosing the impact of coronavirus on their business, revenues, etc, to give investors more clarity on the broader picture, even if results get held up,” said Shruti Rajan, partner, Cyril Amarchand Mangaldas.
Sebi has decided to grant relaxations from compliance stipulations specified under the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015, (LODR) to listed entities. Currently under Regulation 33 relating to financial results, listed entities need to file its quarterly results 45 days from the end of the quarter and 60 days from the end of fiscal for annual financial results.
Even the US Securities and Exchange Commission gave similar relaxations earlier this month. “But that is on a conditional, targeted basis and requires firms to file reports with it. Sebi’s move is broader because it doesn’t seek an explanation on business continuity issues and is applicable across all listed companies, without exception,” added Rajan.
Sebi also gave relaxation of time gap between two board and audit committee meetings. “The board of directors and audit committee of the listed entity are exempted from observing the maximum stipulated time gap between two meetings for the meetings held or proposed to be held between the period December 1, 2019 and June 30, 2020. However, the board of directors and audit committee shall ensure that they meet at least four times a year, as stipulated under regulations 17(2) and 18(2)(a) of the LODR,” said Sebi in its circular. Other relaxation was related to filing shareholding pattern, corporate governance report, statement of investor complaints, among others.