presentation on industry perspective of listing regulations by cs ahalada rao v

Ahalada Rao V & AssociatesCompany Secretaries

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SEBI (Listing Obligation and Disclosure Requirements)

Regulations, 2015

INDUSTRY PERSPECTIVE OF THE LISTING REGULATIONS

By CS Ahalada Rao .VCompany Secretary In Practice

2Ahalada Rao V & AssociatesCompany Secretaries




Regulations, 2015

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SEBI




Regulations, 2015

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Consolidation of provisions

Apply to all types of securities

Disclosure and transparency

coverage

Investor Redressal




Regulations, 2015

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Transformation from contractual to legal obligations

Fail to file any return, furnish information under Regulations1lakh for every day or 1crore whichever is less

15h OF SEBI ACT

15A OF SEBI ACT

Penalty for disclosure of acquisition of shares and take overs under Regulations25cr or 3 times of profits made whichever is higher



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Transformation from contractual to legal obligations

Listing agreement

SEBI (LODR) regulations,2015

Company Stock exchange

Company SEBI Stock exchange



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Liability for contravention of the Act, rules or the regulations. ( Regulation 98)


Imposition of fines

Suspension of trading

Freezing of promoter/promoter group holding of designated securities

Any other action as may be specified by the Board


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Codification and Consolidation

SE/23761. April 3, 1992 Amendment to Clause 41 of Listing Agreement

128.CIR/CFD/CMD/1/2015 April 08, 2015

Fine structure for non-compliance with therequirement of Clause 49(II)(A)(1) of ListingAgreement

To



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SEBI Regulations (sec 11,11A and sec 30 of SEBI act,1992)

Regulations

Rules based

Principles based

Principles-based regulation means placing greater reliance on principles and outcome-focused, high level rules as a means to drive at the regulatory aims we want to achieve, and less reliance on prescriptive rules.



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Practicing on principle based rules



Don’t practice nearly like this

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Practicing on principle based rules



It shall be on letter and spirit…….

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Uniformity with other laws

Companies act,2013Companies act,1956Competition act,2002Depositories act,1996SEBI act,1992



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Similarities with companies act,2013


Gap between board meeting(120 days) (Regulation 35)


Preservation of documents (Regulation 9)

Permanent

Eight financial years

Definitions

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Contradiction with companies act,2013

Year for consideration of meetings of board

• Financial year and calendar year

Annual report(Regulation 34)

• Submission to stock exchange within 21 days after approval and adoption in AGM

Quarter

•Three months commencing on the first dayof April, July, October or January of a financial year



Ambiguity ( Regulation 4(2))

• Respective act shall prevail.

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New concepts

Material subsidiary

(Regulation 16)

Income or net worth is > 25% of consolidated income or net worth


Annual information

memorandum(Regulation 35)

Observation letter or

No objection letter

Regulation37(3)


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Promoters(Regulation 31A)

Ahalada Rao V & AssociatesCompany Secretaries 17Ahalada Rao V & Associates

Company Secretaries

Re classification of promoters as public share holders.

31A (5) When a new promoter replaces the previous promoter subsequent to an open offer or in any other manner, re-classification may be permitted subject to approval of shareholders in the general meeting and compliance of the following conditions: (a) Such promoter along with the promoter group and the Persons Acting in Concert shall not

hold more than ten per cent of the paid-up equity capital of the entity. (b) Such promoter shall not continue to have any special rights through formal or informal

arrangements. All shareholding agreements granting special rights to such entities shall be terminated.

(c) Such promoters and their relatives shall not act as key managerial person for a period of more than three years from the date of shareholders’ approval:

Provided that the resolution of the said shareholders' meeting must specifically grant approval for such promoter to act as key managerial person.

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CEO/MD (Regulation 17(8) )



The listed entity may appoint separate persons posts of chairperson and chief executive officer

Compliance certificate from chief executive officer

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Role of company secretary

Compliance Officer and his Obligations

To act as compliance officer

To ensure conformity with the regulatory provisions

Coordination with board and stock exchange and depositories

Maintaining grievance redressal mechanism



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Functional website(Regulation 46)

Details of business

Terms and conditions of independent directors

Composition of committees of board of directors

Code of conduct of management

vigil mechanism/ Whistle Blower policy

Subsidiaries

Related party transactions

Grievance redressal mechanism

Contact information of designated officials of listed entity

Financial information

Shareholding pattern

Details of agreements entered with media companies

institutional investor meet and presentations

new name and the old name of the listed entity for a continuous period of one year



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IFRS(Regulation 70(2) & 71(3) )

Indian GAAPUS GAAPIFRSASInd AS


Listed companies in addition to applicable accounting standards they may adopt IFRS.


Right to participate and to be informed of fundamental corporate changes

Right to participate effectively and vote in general shareholder meetings.

Right to be informed of the rules, including voting procedures

Right to ask questions, place items in the agenda and propose resolutions

Right to participate in key corporate governance decisions

Rights of shareholders(Regulation 27&Part E of Schedule II)



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SME (Regulation 31)

Big blow for SMEs. Equated with big brother



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Acquisitions( SCHEDULE III PART A)


The new listing regulation mandates disclosure for every damn acquisition. Materiality is of no importance. If RIL buy outs a company with 1 lac capital, need to report !

Listing agreement was more focused on price sensitive information.I can buy a big flat worth 1000 crore and not report and I may acquire a company worth 1 lac and have to make disclosure.



Disclosure and transparency (Regulation 4)

presentation on industry perspective of listing regulations by cs ahalada rao v

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