To strengthen corporate governance practices and disclosure requirements, markets regulator SEBI on Thursday decided that the top 1,000 listed firms listed on the stock exchanges should formulate a dividend distribution policy.
“Requirement for formulation of dividend distribution policy by the existing top 500 listed entities has been extended to the top 1,000 listed entities on the basis of market capitalisation,” SEBI said in a statement after the conclusion of its board meeting.
In case of board meetings held for more than one day, SEBI said financial results should be disclosed by listed entities within 30 minutes of the end of the board meeting for the day on which such results are considered. SEBI also said that promoters should disclose their intention to delist their company by making an initial public announcement.
The regulator also decided to remove the list of restricted activities or sectors from the definition of venture capital undertaking, to provide flexibility to venture capital funds registered under alternative investment funds in making investments.
The markets watchdog also said listed firms should make available recordings of analyst and investor meets on their websites as well as stock exchanges within 24 hours or before the next trading day.
The regulator also cleared a proposal in relation to applicability, constitution and role of the risk management committee (RMC).
SEBI said requirement to seek stock exchange approval for change of name of a listed entity had been dispensed with. Also, the requirement to publish newspaper advertisements for the notice to board meetings where financial results are to be discussed and for quarterly statement on deviation or variation in use of funds, had also been dispensed with.
The time lines for submission of periodic reports — statement of investor complaints, corporate governance report and shareholding pattern — will be harmonised to 21 days from the end of each quarter, SEBI said.
Frequency of submission of compliance certificates relating to share transfer facility and issuance of share certificates within 30 days of lodgement for transfer, sub-division, among others have been revised from half-year to annual.
To strengthen these corporate governance practices, Sebi board approved several amendments to the LODR (Listing Obligations and Disclosure Requirements) Regulations.
“These amendments are aimed at ensuring gender neutrality and maintaining consistency within the LODR Regulations, harmonising certain provisions of the LODR Regulations with Companies Act, in addition to strengthening the corporate governance practices and disclosure requirements and easing the compliance burden on listed entities,” SEBI said.
The provisions of LODR norms, which become applicable to listed firms based on the market capitalisation criteria, should continue to apply even if such entities subsequently fall below the specified thresholds.
Paid-up capital as well net-worth criteria should continue to apply to such entities unless the paid-up capital or networth falls and continues to remain below the threshold for a period of three consecutive financial years, it added.
The requirement to constitute the RMC has been extended to the top-1,000 listed entities by market capitalisation from the existing top-500 listed entities.
The RMC should have minimum three members with majority of them being members of the board of directors, including at least one independent director.
The quorum for a meeting of the RMC should be either two members or one third of the members of the committee, whichever is higher, including at least one member of the board of directors in attendance.
The role of the RMC has been specified which includes formulation of a detailed risk management policy and monitoring its implementation, periodic review of such policy, review of the appointment, and removal and terms of remuneration of the chief risk officer (if any).
