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Securities and Exchange Board of India (SEBI)

  1. Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2016

    Notification date 25th May, 2016 vide No. SEBI/LAD-NRO/GN/2016-17/003

    Applicability of Regulations:

    These Regulations are applicable to issuers filing offer documents with the Registrar of Companies on or after the date of commencement of these regulations.

    In the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009

    1. In regulation 2, in sub-regulation (1),-
      1. in clause (zm), for the symbol “.”, the symbol “;” has been substituted;
      2. after clause (zm), the following has been inserted namely, -

      "(zn) "wilful defaulter" means an issuer who is categorized as a wilful defaulter by any bank or financial institution or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India and includes an issuer whose director or promoter is categorized as such."

    2. In regulation 4,-

      (1) in sub-regulation (2), clause (c) has been omitted;

      (2) after sub-regulation (4), the following has been inserted, namely, -

      "(5) No issuer shall make,

      1. a public issue of equity securities, if the issuer or any of its promoters or directors is a wilful defaulter; or
      2. a public issue of convertible debt instruments if,
        1. the issuer or any of its promoters or directors is a wilful defaulter, or
        2. (ii) it is in default of payment of interest or repayment of principal amount in respect of debt instruments issued by it to the public, if any, for a period of more than six months.

      (6) An issuer making a rights issue of specified securities, shall make disclosures as specified in Part G of Schedule VIII, in the offer document and abridged letter of offer, if the issuer or any of its promoters or directors is a wilful defaulter.

      (7) In case of a rights issue of specified securities referred to in sub-regulation (6) above, the promoters or promoter group of the issuer, shall not renounce their rights except to the extent of renunciation within the promoter group."

    3. In regulation 73, in sub-regulation (1), after clause (g) the following has been inserted, namely, -

      "(h) disclosures, similar to disclosures specified in Part G of Schedule VIII, if the issuer or any of its promoters or directors is a wilful defaulter."

    4. In regulation 84, in sub-regulation (1), after the words and numbers "Schedule XVIII", the words, symbols and numbers "and disclosures similar to disclosures specified in Part G of Schedule VIII shall be made, if applicable" shall be inserted;
    5. In Schedule VIII,-
      1. in Part A, in para (2), in item (XI), in sub-item (E) the words "by Reserve Bank of India or other authorities" has been omitted;
      2. in Part E, in para (5),in item (XV), in sub-item (D) the words “by Reserve Bank of India or such other authorities” has been omitted;
      3. after Part F, the following shall be inserted, namely,- “Part G

      [See regulation 4(6)]

      DISCLOSURES PERTAINING TO WILLFUL DEFAULTERS

      1. If the issuer or any of its promoters or directors is a wilful defaulter, it shall make the following disclosures:
        1. Name of the bank declaring the entity as a wilful defaulter;
        2. The year in which the entity is declared as a wilful defaulter;
        3. Outstanding amount when the entity is declared as a wilful defaulter;
        4. Name of the party declared as a wilful defaulter;
        5. Steps taken, if any, for the removal from the list of wilful defaulters;
        6. Other disclosures, as deemed fit by the issuer in order to enable investors to take informed decisions;
        7. Any other disclosure as specified by the Board.
      2. The fact that the issuer or any of its promoters or directors is a wilful defaulter shall be disclosed prominently on the cover page with suitable cross-referencing to the pages.
      3. Disclosures specified herein shall be made in a separate chapter or section distinctly identifiable in the Index / Table of Contents"
    6. In Schedule XXI, in Part A, in Para (XIV), in item (C), the words "by Reserve Bank of India or such other authorities" shall be substituted with the words "in India or".
  2. Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2016

    Notification date 25th May, 2016 vide No. SEBI/LAD-NRO/GN/2016-17/002

    In the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 - 

    1. In regulation 2, in sub-regulation (1),-
      1. clause (ze) shall be re-numbered as clause (zf);
      2. after clause (zd) and before clause (zf) the following has been inserted, namely,-

        "(ze) "wilful defaulter" means any person who is categorized as a wilful defaulter by any bank or financial institution or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India and includes any person whose director, promoter or partner is categorized as such;”

    2. After regulation 6 and before regulation 7, the following has been inserted, namely,-

      "6A. Notwithstanding anything contained in these regulations, no person who is a wilful defaulter shall make a public announcement of an open offer for acquiring shares or enter into any transaction that would attract the obligation to make a public announcement of an open offer for acquiring shares under these regulations:

      Provided that this regulation shall not prohibit the wilful defaulter from making a competing offer in accordance with regulation 20 of these regulations upon any other person making an open offer for acquiring shares of the target company."

  3. Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2016

    Notification date 25th May, 2016 vide No. SEBI/LAD-NRO/GN/2016-17/004

    In the SEBI (Issue and Listing of Debt Securities) Regulations, 2008 –

    1. In regulation 2, in sub-regulation (1),-
      1. in clause (m), for the symbol “.”, the symbol “;” has been substituted.
      2. after clause (m), the following clause has been inserted namely, -

        "(n) "wilful defaulter" means an issuer who is categorized as a wilful defaulter by any bank or financial institution or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India and includes an issuer whose director or promoter is categorized as such.”

    2. In regulation 4, for sub-regulation (1), the following sub-regulation has been substituted, namely, - 2

      “(1) No issuer shall make any public issue of debt securities if as on the date of filing of draft offer document or final offer document as provided in these regulations:

      1. the issuer or the person in control of the issuer or its promoter or its director is restrained or prohibited or debarred by the Board from accessing the securities market or dealing in securities; or
      2. the issuer or any of its promoters or directors is a wilful defaulter or it is in default of payment of interest or repayment of principal amount in respect of debt securities issued by it to the public, if any, for a period of more than six months.”
    3. In Schedule I, in paragraph 3, after sub- paragraph B, the following sub- paragraph has been inserted namely,-

      “C. Disclosures pertaining to wilful default

      1. In case of listing of debt securities made on private placement, the following disclosures has been made:
        1. Name of the bank declaring the entity as a wilful defaulter;
        2. The year in which the entity is declared as a wilful defaulter;
        3. Outstanding amount when the entity is declared as a wilful defaulter;
        4. Name of the entity declared as a wilful defaulter;
        5. Steps taken, if any, for the removal from the list of wilful defaulters;
        6. Other disclosures, as deemed fit by the issuer in order to enable investors to take informed decisions;
        7. Any other disclosure as specified by the Board.
      2. The fact that the issuer or any of its promoters or directors is a wilful defaulter shall be disclosed prominently on the cover page with suitable cross-referencing to the pages.
      3. Disclosures specified herein shall be made in a separate chapter or section, distinctly identifiable in the Index / Table of Contents."
  4. Securities and Exchange Board of India (Issue and Listing of Non- Convertible Redeemable Preference Shares) (Amendment) Regulations, 2016

    Notification date 25th May, 2016 vide No. SEBI/LAD-NRO/GN/2016-17/005

    In the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013:-

    1. In regulation 2, in sub-regulation (1),-
      1. in clause (s), for the symbol “.”, the symbol “;” has been substituted.
      2. after clause (s), the following clause has been inserted namely, -

        "(t) "wilful defaulter" means an issuer who is categorized as a wilful defaulter by any bank or financial institution or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India and includes an issuer whose director or promoter is categorized as such.”

    2. In regulation 4, for sub-regulation (1), the following sub-regulation has been substituted, namely,-

      “(1) No issuer shall make any public issue of non-convertible redeemable preference shares if as on the date of filing of draft offer document or final offer document as provided in these regulations:

      1. the issuer or the person in control of the issuer or its promoter or its director is restrained or prohibited or debarred by the Board from accessing the securities market or dealing in securities; or
      2. the issuer or any of its promoters or directors is a wilful defaulter or it is in default of payment of interest or repayment of principal amount in respect of non-convertible redeemable preference shares issued by it to the public, if any, for a period of more than six months.”
    3. In Schedule I, after paragraph III, the following paragraph shall be inserted namely,-

      “IV. Disclosures pertaining to wilful default

      1. In case of listing of non-convertible redeemable preference shares made on private placement, the following disclosures shall be made:
        1. Name of the bank declaring the entity as a wilful defaulter;
        2. The year in which the entity is declared as a wilful defaulter;
        3. Outstanding amount when the entity is declared as a wilful defaulter;
        4. Name of the entity declared as a wilful defaulter;
        5. Steps taken, if any, for removal from the list of wilful defaulter;
        6. Other disclosures, as deemed fit by the issuer in order to enable investors to take informed decisions;
        7. Any other disclosure as specified by the Board.
      2. The fact that the issuer or any of its promoters or directors is a wilful defaulter shall be disclosed prominently on the cover page with suitable cross-referencing to the pages.
      3. Disclosures specified herein shall be made as a separate chapter or section distinctly identifiable in the Index / Table of Contents."
  5. Securities and Exchange Board of India (Depositories and Participants) (Third Amendment) Regulations, 2016

    Notification date 27th May, 2016 vide No. SEBI/LAD-NRO/GN/2016-17/007

    In the SEBI (Depositories and Participants) Regulations, 1996, after regulations 35A the following regulation has been inserted, namely, -

    Wind-down Plan

    35B. Every depository shall devise and maintain a wind-down plan in accordance with guidelines specified by the Board.

    Explanation- For the purpose of this regulation, 'wind-down plan' means a process or plan of action employed, for transfer of the beneficial owner accounts and other 2 operational powers of the depository to an alternative institution that would take over the operations of the depository in scenarios such as erosion of networth of the depository or its insolvency or its inability to provide critical depository operations or services."

  6. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2016

    Notification date 25th May, 2016 vide No. SEBI/LAD-NRO/GN/2016-17/001 – came into force on the 1st day of April, 2016

    In the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015,

    1. in regulation 33,
      1. in sub regulation (3),in clause (d),–
        1. after the words “listed entity shall submit” and before the words “audited standalone financial results”, the word “annual” shall be inserted;
        2. for the words and symbols “either Form A (for audit report with unmodified opinion) or Form B(”, the words and symbols “Statement on Impact of Audit Qualifications (applicable only” shall be substituted;
        3. in the proviso, for the words and symbols “either Form A (for audit report with unmodified opinion) or Form B (”, the words and symbols “Statement on Impact of Audit Qualifications (applicable only” shall be substituted;
        4. in the proviso, for the symbol “.”, the symbol “:” shall be substituted;
        5. after the proviso, the following new proviso shall be inserted, namely,

          “Provided further that, in case of audit reports with unmodified opinion(s), the listed entity shall furnish a declaration to that effect to the Stock Exchange(s) while publishing the annual audited financial results.”;

      2. in sub regulation (4),
        1. for the words and symbols “Form A (for audit report with unmodified opinion) & Form B (for audit report with modified opinion)”, the words and symbols “Statement on Impact of Audit Qualifications (for audit report with modified opinion)” shall be substituted;
        2. the words “from time to time” shall be deleted;
      3. in sub regulation (6),
        1. for the words “Form B”, the words and symbols “Statement on Impact of Audit Qualifications (for audit report with modified opinion)” shall be substituted;
        2. the words and symbols “and Qualified Audit Report Review Committee in manner as specified in Schedule VIII” shall be deleted;
      4. sub regulation (7) shall be deleted;
      5. in regulation 34, in sub regulation (2) in clause (a), for the symbol “;”the words and symbols “, and Statement on Impact of Audit Qualifications as stipulated in regulation 33(3)(d), if applicable;” shall be substituted;
      6. in regulation 52,
        1. in sub regulation (3), in clause (a),
          1. for the words and symbols “either Form A for audit report withunmodified opinion, or Form B”, the words and symbols “Statement on Impact of Audit Qualifications (applicable only” shall be substituted;
          2. after the words and symbol “for audit report with modified opinion”, the symbol “)” shall be inserted;
          3. for the symbol “.”, the symbol “:” shall be substituted;
          4. after the clause (a), the following proviso shall be inserted, namely,

            “Provided that, in case of audit reports with unmodified opinion, the listed entity shall furnish a declaration to that effect to the Stock Exchange(s) while publishing the annual audited financial results.”;

        2. in sub regulation (3), in clause (b),
          1. for the words “Form B”, the words and symbols “Statement on Impact of Audit Qualifications(for audit report with modified opinion)” shall be substituted;
          2. the words and symbols “and the Qualified Audit Report Review Committee in the manner as specified in Schedule VIII” shall be deleted;
        3. in sub regulation (3), clause (c) shall be deleted;
        4. in sub regulation (3), in clause (d),
          1. for the word “formats”, the word “format” shall be substituted;
          2. for the words “Form A and Form B”, the words and symbols “Statement on Impact of Audit Qualifications (for audit report with modified opinion)” shall be substituted;
          3. after the words “shall be” and before the words “specified by the Board”, the words “in the manner as” shall be inserted
          4. the words “from time to time” shall be deleted;
      7. in regulation 53, in clause (a), for the symbol “;”the words and symbols “, and Statement on Impact of Audit Qualifications as stipulated in regulation 52(3)(a), if applicable;” shall be substituted;
      8. regulation 95 shall be substituted with the following:

        “Statement on Impact of Audit Qualifications accompanying Annual Audit Report.

        95. The recognised stock exchange(s) shall review the Statement on Impact of Audit Qualifications and the accompanying annual audit report submitted in terms of clause (d) of sub-regulation (3) of regulation33 and clause (a) of sub-regulation (3) of regulation 52.”

      9. In Schedule IV, in Part A, in clause B,
        1. after the words and symbols “expressed any modified opinion(s)” and before the words “in respect of audited financial results”, the words and symbols “or other reservation(s)” shall be deleted;
        2. after the words and symbol “earning per share” and before the words and symbols “or any other financial item(s)”, the words and symbols “,total expenditure, total liabilities” shall be inserted;
        3. after the words and symbols “such modified opinion(s)” and before the words “and cumulative impact”, the words and symbols “or other reservation(s)” shall be deleted;
        4. after the words and symbols “due to modified opinion(s)” and before the words and symbol “while publishing or submitting such results”, the words and symbols “or other reservation(s)” shall be deleted;
        5. after clause B, the following new provisions shall be inserted, namely-

          “BA. If the auditor has expressed any modified opinion(s), the management of the listed entity has the option to explain its views on the audit qualifications and the same shall be included in the Statement on Impact of Audit Qualifications (for audit report with modified opinion).

          With respect to audit qualifications where the impact of the qualification is not quantifiable:

          1. The management shall make an estimate and the auditor shall review the same and report accordingly; or
          2. If the management is unable to make an estimate, it shall provide the reasons and the auditor shall review the same and report accordingly. The above shall be included in the statement on impact of audit qualifications (for audit report with modified opinion).”;
      10. Schedule VIII shall be deleted.

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