Compliance Requirements under the Regulations

1. Appointment, re-appointment or removal of Independent directors (Regulation 25(2A))

The appointment, re-appointment or removal of an independent director of a listed entity, shall be subject to the approval of shareholders by way of a special resolution

1. 1. Appointment is valid even if votes cast in favour exceed vote cast against it.

   2. Tenure as per companies act

2. Declaration wrt. Meeting the criteria of independence by Independent Director (Regulation 25(8), 16(1)(b))

Declaration wrt. Meeting the criteria of independence by Independent Director to be given at first meeting held after his appointment & at every first board meeting of a financial year

3. Directors and Officers insurance (Regulation 25(10) (12))

The top 1000 listed entities & high value debt listed entity by market capitalization, shall undertake Directors and Officers insurance (‘D and O insurance’) for all their independent directors of such quantum and for such risks as may be determined by its board of directors.

4. Membership in Committees/chairperson limit (Regulation 26(1))

A director shall not be a member in more than ten committees or act as chairperson of more than five committees across all listed entities in which he /she is a director

1. 1. For calculation of this limit, all public limited companies will be included and private company, section 8 company, high value debt listed entities will be excluded.

   2. For the purpose of determination of limit, chairpersonship and membership of the audit committee and the Stakeholders’ Relationship Committee alone shall be considered

5. Information w.r.t. committees in which a Director is a member (Regulation 26(2))

Every Director to notify the company, the committee position he occupies and changes, if any

6. Annual affirmation to the Code of Conduct (Regulation 26(3))

Board of Directors and senior management personnel shall affirm compliance with the code of conduct of board of directors and senior management on an annual basis.

7. Disclosures to the board of directors relating to all material, financial and commercial transactions (Regulation 26(5))

Senior management shall make disclosures to the board of directors relating to all material, financial and commercial transactions, where they have personal interest which may be in conflict with the interests of listed entity

8. Filling up of vacancies of Key Managerial Personnel (Regulation 26A)

Any vacancy in the office of Chief Executive Officer, Managing Director, Whole Time Director / CFO or Manager shall be filled within 3 months

9. Filling up of vacancies of Key Managerial Personnel where regulatory approval required (Regulation 26A (2))

Any vacancy in the office of Chief Executive Officer, Managing Director, Whole Time Director, CFO or Manager shall be filled by the listed entity at the earliest but where the listed entity is required to obtain approval of regulatory, government or statutory authorities to fill up such vacancies, then the vacancies shall be filled up by the listed entity at the earliest and in any case not later than six months from the date of vacancy

10. Filling up of vacancies of KMP where resolution plan under Insolvency Code has been approved (Regulation 26 A (3))

Any vacancy in the office of Chief Executive Officer, Managing Director, Whole Time Director or Manager or Chief Financial Officer of such listed entity in respect of which a resolution plan under section 31 of the Insolvency Code has been approved, shall be filled within a period of three months of such approval. Provided that, in the interim, such listed entity shall have not less than one full-time key managerial personnel managing its day-to-day affairs

11. Prior intimation of the Board Meeting for approving financial results (Regulation 29 (1) (a),(2))

Intimation of Board meeting for considering financial results viz. quarterly, half yearly, or annual to be given at least 2 working days in advance (excluding the date of BM and date of intimation)

12. Prior intimation of the Board Meeting to the Stock Exchange (Regulation 29(1) (b)-(h), (2))

Prior intimation of the Board meeting for buy back, voluntary delisting, fund raising (any AGM/EGM/postal ballot for fund raising requiring shareholder approval), any alteration in nature if securities/rights/privileges, any alteration in payment date of interest on debentures/bonds or their redemption, dividend , bonus securities, issue of convertible securities, etc.

The intimation required shall be given at least two working days in advance, excluding the date of the intimation and date of the meeting. Date of BM to be mentioned in intimation

13. Disclosure of Events or Information emanating from within listed entity (Regulation 30(6) (ii))

Events/information emanating from within listed entity as specified in Para A of Part A of Schedule III to be disclosed within 12 hours of occurrence.

14. Disclosure of Events / Information: Event/information is not emanating from within the listed entity (Regulation 30(6)(iii))

Events or information not emanating from within the listed entity must be disclosed to the Stock Exchange within 24 hours of occurrence, except where specific timelines are provided in Part A of Schedule III. For claims against the listed entity (excluding tax disputes) maintained in a structured digital database under SEBI’s Insider Trading regulations, disclosure must be made within 72 hours of receiving the notice.

15. Disclosure of claims against listed entity (excl. tax disputes) maintained in SDD (PIT Reg) (Regulation 30(6)(iii)(Proviso))

For claims against the listed entity (excluding tax disputes) maintained in a structured digital database under SEBI’s Insider Trading regulations, disclosure must be made within 72 hours of receiving the notice.

16. Disclosure of events or information on website (Regulation 30(8))

All disclosures made to Stock Exchange to be disclosed promptly on website of company for a period of 5 years and thereafter as per its Archival policy

17. Verification of Market rumours upon material price movement as specified by S.E. (Regulation 30(11))

Top 250 (top 100 with effect from June 1, 2024 and next top 150 after first 100) listed entities with effect from December 1, 2024 shall confirm, deny or clarify upon material price movement as may be specified by the S.E. any reported event or information in the mainstream media which is not general in nature and which indicates that rumour of an impending specific event or information is circulating amongst the investing public asap and not later than 24 hours from the trigger of material price movement. If the listed entity confirms the reported event or information, it shall also provide the current stage of such event or information Date Extended: Extension of timeline for verification of market rumours by listed entities as follows:

1. 1. For top 100 listed entities by market cap – Date extended from Feb 1, 2024 to June 1, 2024

   2. For top 100-250 listed entities by market cap – Date extended from Aug 1, 2024 to Dec 1, 2024

18. Dissemination of the response received from promoter, director, KMP w.r.t market rumour (Regulation 30(11A))

The promoter, director, key managerial personnel or senior management of a listed entity shall provide adequate, accurate and timely response to queries raised or explanation sought by the listed entity in order to ensure compliance with the requirements under sub-regulation 11 of this regulation and the listed entity shall disseminate the response received from such individual(s) promptly to the stock exchanges

19. Disclosure of events within 30 min. of outcome of meetings of board /within 3 hours as applicable (Regulation 30(6)(i) & Point 4 of Para A of Part A of Schedule III)

The listed entity shall disclose to the Exchange(s), certain events within 30 minutes of the outcome of meetings of the board of directors

a)Listed co. to disclose to S.E. within 30 min of outcome of board meeting: a)dividend & payment/dispatch date

b) cancellation of dividend with reasons

c)decision for buyback/ fund raising

d)increase in capital via bonus shares thru cap. & date on which they will be credited/dispatched;

e)reissue of forfeited shares/sec./issue of shares/securities held in reserve for future issue/creation in any form/ manner of new shares/securities/any other rights, privileges/benefits to subscribe

f) particulars of any alteration of capital, incl. calls

g)financial results

h)voluntary delisting

Where meeting of B.O.D closes after normal trading hours of that day but more than 3 hours before beginning of trading hours of next trading day, listed co shall disclose decision pertaining to event/information within 3 hours from closure of BM. In case meeting is being held for more than a day, final results shall be disclosed within 30 min/ 3 hours from closure of such meeting for day on which it has been considered

20. Intimation of Schedule of analysts or institutional investors meet (Regulation 30 & Point 15(a) of Para A of Part A of Schedule III, Reg 43(2)(o))

Intimation of Schedule of analysts or institutional investors meet to be made at least two working days in advance (excluding the date of the intimation and the date of the meet)

21. Disclosure of certain Agreements to the Stock Exchange (Regulation 30A)

Agreements entered into by the shareholders, promoters, promoter group entities, related parties, directors, key managerial personnel, employees of the listed entity or of its holding, subsidiary or associate company to which listed entity is not a party and has the impact on management/control of listed entity shall be disclosed to the latter within 2 working days of the agreement.

22. Disclosure of Shareholding Pattern (Regulation 31 (1) (b))

Statement showing holding of securities and shareholding pattern for each class of securities is to be submitted to stock exchange within 21 days of end of quarter

23. Disclosure of shareholding pattern (Regulation 31(1)(a))

The listed entity shall submit to the stock exchange(s) a statement showing holding of securities and shareholding pattern separately for each class of securities, in the format specified by the Board ,one day prior to listing of its securities on the stock exchange(s)

All entities falling under promoter and promoter group shall be disclosed separately in the shareholding pattern appearing on the website of all stock exchanges having nationwide trading terminals where the specified securities of the entity are listed

24. Disclosure of the shareholding pattern (Regulation 31(1)(c))

The listed entity shall submit to the stock exchange(s) a statement showing holding of securities and shareholding pattern separately for each class of securities, in the format specified by the Board within ten days of any capital restructuring of the listed entity resulting in a change exceeding two per cent of the total paid-up share capital

25. Application for re-classification by Promoter including promoter group to Listed entity (Regulation 31A(3)(a)(i))

The promoter(s) seeking reclassification shall make a request for reclassification to the listed entity along with a rationale for the request and a description as to how the conditions specified in clause (b) of this sub-regulation (3) are satisfied.

26. NOC from S.E. for reclassification by promoters/promoter group (Regulation 31A(3)(a)(iii))

The listed entity shall submit an application seeking no-objection of the recognized stock exchange for reclassification request made by promoter/promoter group along with the views of the board of directors within five days of consideration of the request by the board of directors

 

Penalty & Punishment

• General penalty: Listed entity/any other person who contravenes any provision of the regulations shall be liable for one or more of the following penalties/actions as deemed fit by the regulator:

a) action as per Securities Law,

b) fine,

c) suspension of trading,

d) freezing of promoter/promoter group holding of designated securities, as may be applicable, in coordination with depositories,

e) any other action specified by Board

• 2000/- per day for non-submission of corporate governance report. Failure for non compliance for 2 consecutive quarters may lead to suspension of trading.
• Failure to appoint woman director – Rs 5000/- per day.
• Failure for non compliance for 2 consecutive quarters may lead to suspension of trading.
• Non compliance with  the  requirements  pertaining  to  quorum of Board meetings: 10,000 per instance