Capital market regulator Securities and Exchange Board of India (SEBI) has been devising and enforcing various measures, from time to time, to protect the interest of investors and the sanctity of the capital market by making listed companies more accountable through enhanced disclosures.
SEBI provides a platform to these listed companies by listing and trading their specified securities on the recognised stock exchanges and regulates these listed companies by making set of requirements and regulations to be followed by these companies.
Till now there were different types of listing agreements for different class of securities which are being done away with the notification of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 on 02.09.2015 which encompasses all classes of securities including equity, convertible and non-convertible securities.
The primary objective of bringing this regulation into force was first to align the Listing agreement with the Companies Act, 2013. Secondly, to make a single regulation for requirements under different securities listing agreements.
The Regulation has been converted to a consolidated form, to make all the listed agreements a single structured document for easy referencing. The Listing Regulations have been sub-divided into two parts viz., (a) substantive provisions incorporated in the main body of Regulations; (b) procedural requirements in the form of Schedules to the Regulations.
Basic features of the regulations are as follows:
• Chapter II of the Regulation provides for the guiding principles governing disclosure and obligations of listed companies. The chapter provides for the principles for the listed entities for periodic disclosure and corporate governance followed by the companies.
• Chapter III of the Regulations provides for a common obligation for listed companies, in the matter of compliance, the appointment of a compliance officer, filing on the electronic platform, etc.
• Chapter IV to IX provides for the obligations applicable to specific securities incorporated in different chapters.
• Chapter X to XI provides for the responsibilities to compliance given to stock exchanges to regulate, monitor and take action for compliance measures.
As is evident from these regulations, SEBI has not only attempted to streamline the provisions of the listing agreement, but at the same time provisions have been made to strengthen shareholder democracy by enumerating the rights of shareholders alongwith the obligations of listed companies. The new listing regulations provides for qualitatively better and timely flow of information from listed entities to stock exchanges, investors and other stakeholders thereby further strengthening the hands of SEBI.