Compliance Requirements under the Regulations

1. Compliance of Regulation 15(1A), 16 to 27 by HVDL entities (Regulation 15(1A))

High-value debt-listed (HVDL) entities are required to comply with Regulations 16 to 27 mandatorily with effect from April 1, 2025. High-value debt-listed entity is one which has listed its non-convertible debt securities and has an outstanding value of listed non-convertible debt securities of Rupees One Thousand Crore and above.

Where the value of the outstanding listed non-convertible debt securities becomes equal to or greater than the specified threshold of Rupees One Thousand Crore during the course of the year, a high value debt listed entity shall ensure compliance with these provisions within six months from the date of such trigger, and the disclosures of such compliance may be made in the corporate governance compliance report on and from the third quarter following the date of the trigger.

In case a ‘high value debt listed entity’ has its specified securities listed, it shall comply with the provisions of regulation 15 to regulation 27 of these regulations.

2. Maximum number of Directorships (Regulation 17A)

A person shall be a director/independent director in not more than seven listed entities

1) Where a person is serving as a whole time director / managing  director  in  any  listed  entity, he shall  serve  as  an  independent  director  in  not more than three listed entities.

2) For the purpose of counting the number of listed entities on which a person is a director / independent director, all entities whose equity shares are listed on a stock exchange and high value debt listed entities shall be considered

3) Directorship(s) held by a person on an ex-officio basis due to statute or applicable contractual framework in case of public sector undertakings and entities set up under a public private partnership arrangement shall not be included in calculating the maximum number of directorships

4) Provisions relating to HVDLE shall come into effect after 6 months from date of publication of SEBI LODR Amendment Regulations 2025 in Official Gazette(viz 27.09.25) or AGM date which ever is later.

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. Fees/compensation paid to NED to be approved by shareholders in GM of HVDLE (Regulation 62D (11)(a)-(e))

The board of directors of HVDLE shall recommend all fees or compensation, if any, paid to non-executive directors, including independent directors and shall require approval of shareholders in general meeting.

Requirement of obtaining approval of shareholders in general meeting shall not apply to payment of sitting fees to non-executive directors, if made within limits prescribed under Companies Act, 2013 for payment of sitting fees without approval of CG.

Approval of shareholders shall specify the limits for the maximum number of stock options that may be granted to non-executive directors, in any financial year and in aggregate.

Approval of shareholders by special resolution shall be obtained every year, in which the annual remuneration payable to a single non-executive director exceeds fifty per cent of the total annual remuneration payable to all non-executive directors, giving details of the remuneration thereof.

Independent directors shall not be entitled to any stock option.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

5. Fees/compensation paid to Executive Directors (Promoter/Promoter Group) of HVDLE (Regulation 62D (12))

The fees or compensation payable to executive directors who are promoters or members of the promoter group of HVDLE, shall be subject to the approval of the shareholders by special resolution in general meeting if certain conditions are met.

Conditions:

(i) the annual remuneration payable to such executive director exceeds rupees 5 crore or 2.5 per cent of the net profits of the listed entity, whichever is higher; or

(ii) where there is more than one such director, the aggregate annual remuneration to such directors exceeds 5 per cent of the net profits of the HVDLE.

The approval of the shareholders under this provision shall be valid only till the expiry of the term of such director.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

6. Code of Conduct for Board and Senior Management by HVDLE (Regulation 62D (10))

The board of directors shall lay down a code of conduct suitably incorporating the duties of independent directors as laid down in the Companies Act, 2013 for all members of board of directors and senior management of the HVDLE.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

7. Corporate Governance: Minimum information to be placed before the Board – HVDLE (Regulation 62D (13))

The information specified in Part A of Schedule II of LODR regulations [Corporate Governance: Minimum information to be placed before Board] shall be placed before the board of directors of HVDLE.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

8. Furnishing of Compliance Certificate – HVDLE (Regulation 62D (14))

The chief executive officer and the chief financial officer of the HVDLE shall provide the compliance certificate to the board of directors as specified in Part B of Schedule II of LODR Regulations.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

9. Risk assessment and monitoring for HVDLE (Regulation 62D (15))

The board of directors shall be responsible for framing, implementing and monitoring the risk management plan for the HVDLE. Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

10. Evaluation of Independent Directors in HVDLE (Regulation 62D (16))

The board of directors shall evaluate independent directors on the following parameters:

(a) performance of the directors; and

(b) fulfillment of the independence criteria as specified in these regulations and their independence from the management:

Provided that in the above evaluation, the directors who are subject to evaluation shall not participate.

Regulation 62D shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of Board shall be fulfilled by IRP/RP.

 

Penalty & Punishment

1) Sec 15A of SEBI Act:

If any person, who is required under this Act or any rules or regulations made thereunder,—

(a)  to furnish any document, return or report to the Board, fails to furnish the same or who furnishes or files false, incorrect or incomplete information, return, report, books or other documents, he shall be liable to a penalty which shall not be less than one lakh rupees but  which  may  extend  to  one  lakh  rupees  for  each  day  during  which  such failure continues subject to a maximum of one crore rupees  

(b)  to file any return or furnish any information, books or other documents within the time specified therefor in the regulations, fails to file return or furnish the same within the time specified  therefor  in  the  regulations or  who  furnishes  or  files  false,  incorrect  or incomplete information, return, report, books or other documents, he shall be liable to penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees

(c) to maintain books of account or records, fails to maintain the same, he shall be liable to a penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees

2) 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:

1. a) action as per Securities Law,
2. b) fine,
3. c) suspension of trading,
4. d) freezing of promoter/promoter group holding of designated securities, as may be applicable, in coordination with depositories,
5. e) any other action specified by Board