[Opinion] Latest Amendments to Regulation 30 of SEBI LODR Regulations

Raghunath Ravi – [2023] 151 taxmann.com 539 (Article)

Amendments made to SEBI LODR

With the Securities and Exchange Board of India (SEBI) having announced amendments to the SEBI Listing Obligations and Disclosure Requirements Regulations 2015 (Listing Regulations/ LODR ), effective June 13 , 2023, we may expect a slew of seminars/webinars/articles in print media and also posts in social media on the salient features of the amendments and the impact of the amendments on the listed entities. However, what has been not noticed/ realised by many including professionals and experts in corporate laws is that the amendments are only “tinkering” of the provisions of a part of the Regulations – focus on the provisions – that deal with material event/information relating to the listed entities without any efforts on the part of the SEBI to give a complete revamp to the Regulations. That this has been the status ever since the Listing Regulations were brought info force about seven years ago shows the “efficiency” of the Regulator in drafting laws and updating them periodically with changes that become imperative so as to make the Regulations relevant effective and meaningful.

Let’s go into the details of the amendments made now

One of the main amendments made now relates to certain changes made to the Regulation 30 of the Listing Regulations that requires listed entities to disclose material events or information to the stock exchanges.

Amendments Proposed to be Made to SEBI (PIT) Regulations

It is worth mentioning here that SEBI has, in terms of its consultation paper dated May 18, 2023, dealt in detail the need for amending the definition of “unpublished price sensitive information”(UPSI,) under the SEBI (Prohibition of Insider Trading) Regulations, 2015 ( SEBI PIT Regulations) in order to bring greater clarity and uniformity of compliance in the ecosystem by linking to material events as defined under Regulation 30 of SEBI Listing Regulations.

The said Paper proposes amendment to the SEBI PIT Regulations by insertion of the following in Regulation 2(1) (n) of Regulation 2(1)(n) of the SEBI PIT Regulations:

“(vi) material event in accordance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 “

It is to be noted that the aforesaid (proposed) insertion is only a re-introduction of the earlier sub-regulation (vi) which reads as follows, till it was deleted with effect from April 1 2019

“(vi) material events in accordance with the listing agreement”

(Yes. It is similar to the provisions in the Companies Act 2013 relating to “commencement of new business” that prohibited companies incorporated under the said Act from commencing any business or exercising borrowing powers unless such companies file the prescribed declaration within 180 days of incorporation evidencing the subscribers to the Memorandum of Association having paid the value of the shares subscribed by them – which was in force from April 1 2014 as Section 11 but got deleted with effect from May 29 2015 only to be re-introduced verbatim thro Section 10A with effect from Nov 2 2018)

While the amendments now made to R 30 are all relevant, it is surprising that SEBI has been leaving the regulation 29 -which deals with “Prior Intimation” to be given to stock exchanges by listed entities about the meeting of board of directors in which certain proposals that fall under material events are due to be considered also relates to material events- untouched

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