The Securities and Exchange Board of India (SEBI) held a board meeting on March 15, 2024 (Board Meeting), pursuant to which several key amendments to various securities laws have been approved.
Specifically, SEBI approved the proposals contained in the consultation paper dated December 28, 2023 with respect to the proposed mandatory verification of market rumours by listed entities (as discussed in our last newsletter, available by clicking on this link). The amendments to the concerned regulations are yet to be notified and it would be interesting to note how the rumour verification requirement is now implemented and interpreted by SEBI.
Further, with respect to the circular mandating additional disclosures by certain Foreign Portfolio Investors (FPIs) (as discussed in LegIt Vol. I Issue 1), SEBI vide the Board Meeting approved the proposal for exempting FPIs having more than 50% of their Indian equity Assets Under Management (AUM) in a single corporate group from the requirement of additional disclosures, subject to the following conditions:
- the parent company of such corporate group has no identified promoter;
- the FPI holds not more than 50% of its Indian equity AUM in the corporate group, after disregarding its holding in the parent company (with no identified promoter); and
- the composite holdings of all such FPIs (that meet the 50% concentration criteria) in the parent company (with no identified promoter) is less than 3% of the total equity share capital of the parent company (with no identified promoter).
Additionally, SEBI vide the Board Meeting approved several proposals for enhancing ease of doing business for listed entities in relation to on-going compliance requirements, such as inter alia approving proposals in relation to extending timelines for filling up vacancies of key managerial personnel requiring statutory approvals, harmonizing timelines in relation to prior intimation of board meetings and introducing a sunset clause of three years for market capitalization based compliance provisions. The approval of these proposals is a part of a continued trend of SEBI taking measures to enhance ease of doing business for listed entities under various securities laws and would be a welcome change for all listed entities.