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SEBI (LODR) (Fourth Amendment) Regulations, 2021

September 3, 2021

Background:

Securities and Exchange Board of India vide notification dated 13th August 2021 has amended the Securities and  Exchange  Board of  India  (Listing  Obligations and  Disclosure  Requirements)  Regulations, 2015 ("SEBI LODR"), and the said amendment is named as Securities and  Exchange  Board of  India  (Listing  Obligations and  Disclosure  Requirements) (Fourth Amendment) Regulations, 2021 ("Amended Regulations").

The amendments are as follows:

S.No Regulation Existing provision Amended provision Remarks
1. 52(4)- Disclosure in financial results In the financial results of the listed entity, it was mandatory to disclose the 

a)credit rating and change in credit rating 

b) asset cover available, in case of non-convertible debt securities;

d)previous due date for the payment of interest/ dividend for non-convertible redeemable preference shares/ repayment of principal of non-convertible preference shares /non-convertible debt securities and whether the same has been paid or not; and, 

e) next due date for the payment of interest/ dividend of non-convertible preference shares /principal along with the amount of interest/ dividend of non-convertible preference shares payable and the redemption amount;

As per amended regulation the sub clauses (a) (b) (d) (e) of clause (4) of regulation 52 shall be omitted. by the amended regulation the company need not disclosure credit rating, asset cover, 

previous and next due date for the payment.

2. 57-Other submissions to stock exchange Other submissions to stock exchange Intimations/ Other submissions to stock exchange The heading of the section is changed by inclusion of the word “intimation/”
3. 57(2)-Undertaking to the stock exchange It was a mandate to submit the undertaking with the stock exchange that the entity has submitted all the documents and intimation required to Debenture trustee annually The sub section shall be omitted. By the amended regulation there is no requirement to submit the undertaking with the stock exchange.
4. 58-Documents and information to holders of non - convertible securities. Documents and information to holders of non - convertible debt securities and non-convertible preference shares Documents and information to holders of non - convertible securities. The words “debt” and “and non-convertible preference shares” shall be omitted.
5. 58(1)(a)- Soft copies of full Annual Reports Soft copies of full Annual Report to all the holders of non convertible preference share who have registered their email address(es) for the purpose  Soft copies of the full annual reports to all the holders of non-convertible securities who have registered their email address(es) either with the listed entity or with any depository; Previous it was required to send soft copies of Annual Report only to non convertible preference share holders Whereas by the amended regulation it should be sent to all the non-convertible securities holders.
6. 58(1)(b)- Hard copy of statement containing the salient features of annual report Hard copy of statement containing the salient features of all the documents, as specified in Section 136 of Companies Act, 2013 and rules made there under to those holders of non convertible preference share who have not so registered  Hard copy of statement containing the salient features of all the documents, as specified in Section 136 of Companies Act, 2013 and rules made there under to those holders of non convertible securities who have not so registered  Previously If any request is made for hard copies of statement containing the salient features of all the documents, as specified in Section 136 of Companies Act, 2013 to the holders of non-convertible preference share. However, in said amended regulations, it should be sent to all the securities holders
7. 58(1) (c)- Hard copies of full annual reports Hard copies of full annual report to those holders of non convertible debt securities and non convertible preference share, who request for the same.  Hard copies of full annual report to those holders of non convertible securities, who request for the same.  Previously If any request is made for hard copies of the annual report by the holders of non convertible debt securities and non-convertible preference share, then the same is to be sent. However, in said amended regulations, it should be sent to all the securities holders
8. 58(1)(d)- Half yearly communication Half yearly communication as specified in sub-regulation (4) and (5) of regulation 52, to holders of non convertible debt securities and non convertible preference shares  The sub section shall be omitted Previously Half-yearly disclosure about Financial results and certificate signed by debenture trustee that it has taken note of the contents was mandatory to send to the holders of non-convertible debt securities and non-convertible preference shares. Whereas by the amended regulation, it is not required to do so.
9. 61 (1) - Payment of interest or dividend The listed entity shall ensure timely payment of interest or dividend of non-convertible redeemable preference shares or redemption payment: 

Provided that the listed entity shall not declare or distribute any dividend wherein it has defaulted in payment of interest on debt securities or redemption thereof or in creation of security as per the terms of the issue of debt securities: 

Provided further that this requirement shall not be applicable in case of unsecured debt securities issued by regulated financial sector entities eligible for meeting capital requirements as specified by respective regulators

The listed entity shall ensure timely payment of interest or dividend of 

non-convertible debt securities and/or 

 non-convertible redeemable preference shares or redemption payment: 

Provided that the listed entity shall not declare or distribute any dividend wherein it has defaulted in payment of interest on debt securities or redemption thereof or in creation of security as per the terms of the issue of debt securities.

It was required to ensure by the listed entity that the payment of interest or dividend of non-convertible redeemable preference shares is done on a timely basis, by the amended regulations, the listed entity must also ensure that the payment of interest or dividend of non-convertible debt securities is also done on a timely basis.

 

Previously the said the requirement was not applicable in case of unsecured debt securities issued by regulated financial sector entities eligible for meeting capital requirements as specified by respective regulators, by the amended regulations, the requirement was not applicable in case of unsecured debt securities issued by regulated financial sector entities eligible for meeting capital requirements

 

Link of the notification: https://www.sebi.gov.in/legal/regulations/aug-2021/securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-fourth-amendment-regulations-2021_51885.html

Disclaimer: The entire contents of this document have been developed based on relevant provisions and are purely the views of the authors. Though the author has made utmost efforts to provide authentic information, however, the authors and the company expressly disclaim all and any liability to any person who has read this document, or otherwise, in respect of anything, and consequences of anything done or omitted to be done by any such person in reliance upon the contents of this document.

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