Top 1,000 companies by m-cap to have dividend distribution policy: Sebi

The Sebi board also approved amendments to delisting regulations with an objective to make the delisting process more transparent and efficient



In an action packed board meeting, market regulator Securities and Exchange Board of India (Sebi) on Thursday approved several amendments to (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Requirement for formulation of dividend distribution policy by the existing top 500 listed companies has been extended to the top 1,000 listed companies on the basis of market capitalisation.

In case of board meetings held for more than one day, the financial results must be disclosed by the listed entities within 30 minutes of end of the board meeting for the day on which the financial results are considered.

The market regulator also made it mandatory for companies to release audio recording of all analyst meetings in 24 hours.

The Sebi board also approved amendments to delisting regulations with an objective to make the delisting process more transparent and efficient.

Under the new regulations, promoter or acquirer will be required to disclose their intention to delist the company by making an initial public announcement. The Committee of Independent Directors will be required to provide their reasoned recommendations on the proposal for delisting.

Further, timelines for completion of various activities forming part of delisting process have been introduced or revised to make the process more efficient.

Promoters will be permitted to specify an indicative price for delisting which shall not be less than the floor price and they will be bound to accept the price discovered through reverse book building if the same is equal to the floor price.

The board has also decided to introduce new requirements for sustainability reporting by listed entities.

This new report will be called the Business Responsibility and Sustainability Report (BRSR) and shall replace the existing Business Responsibility Report (BRR).

It will be applicable to the top 1000 listed entities (by market capitalisation), for reporting on a voluntary basis for FY 2021–22 and on a mandatory basis from FY 2022–23.

In the meeting, Sebi approved the proposal to rationalise the existing framework pertaining to reclassification of promoter companies which includes exemption from:

Existing requirements, in cases of reclassification pursuant to an order of the regulator under any law in line with existing exemption already available to cases of resolution plan approved under section 31 of the Insolvency code.

The requirement of seeking approval of shareholders in cases where the promoter seeking reclassification holds shareholding of less than 1 per cent, subject to the promoter not being in control.

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