In furtherance to one of the decisions taken in the board meeting held on March 25, 2021, the Securities and Exchange Board of India i.e. SEBI has recently notified the amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2021, bringing major changes in the existing regulations with following main objectives:

  • New Format of Business Responsibility and Sustainability Report is prescribed to bring in greater transparency  through disclosure of material Environmental, Social and Governance (ESG) – related information to enable market participants to identify and assess sustainability and related risks and opportunities.  These requirements set the stage for taking a major step for better disclosures in the ESG space in India.
  • Ease in the process requirement for re-classification of promoters in public category in certain situations and reducing the time limits to quicken the process
  • Other amendments aimed at ensuring :
    • gender neutrality and maintaining consistency within the LODR Regulations;
    • harmonizing certain provisions of the LODR Regulations with Companies Act;
    • strengthening the corporate governance practices and disclosure requirements; and
    • easing the compliance burden on listed entities.
  • Enhancing the role and effectiveness of Risk Management Committees

Basis the objectives, have segregated the amendments in LODR Regulations for the ease of understanding in 5 major areas:

  • Regular Compliance
  • Changes w.r.t. Risk Management Committee
  • New process for Re-classification of status of a promoter or person belonging to promoter group to public category
  • Event-based compliance
  • Applicable compliance to top 1000 listed entities

One major change is the applicability of provisions of LODR basis the specified thresholds. Now onwards, if any provision is applicable on any listed company basis market capitalization, it will continue to be applicable even if it falls below the specified threshold limits, e.g. Dividend Distribution policy, Business Responsibility & Sustainability Report etc.