SEBI's new disclosure norms to kick in on Saturday

The compliance burden on listed companies is set to increase from Saturday as the Securities and Exchange Board of India (SEBI) has put in place a stricter timeline for the disclosure of material events or information by them.

Under this, the capital markets regulator has given 12 to 24 hours for disclosures.

The regulator has asked companies to disclose agreements entered into by shareholders, promoters, related parties, directors, key managerial personnel, and employees of the listed entity or of its subsidiary, which can impact the management and control of such firms to stock exchanges.

Such agreements need to be disclosed within 12 hours in case a listed entity is a party and within 24 hours where the listed entity is not a party.

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Disclosure of family settlement agreements was already required under the existing Para A of Schedule III under the LODR (Listing of Obligations and Disclosure Requirements) Regulations.

Further, for material events or information that emanate from the listed entity, including those related to acquisitions, Scheme of Arrangement, consolidation of shares, and buyback of securities, the timeline for disclosure by the entity has been set at 12 hours, according to a SEBI circular.

Besides, timelines have been fixed at 24 hours from the occurrence of the event in case the information is not emanating from within the listed entity. This included a revision in rating, fraud, or defaults by a listed entity, its promoter, or directors; restructuring about loans from banks, one-time settlement with a bank, and winding-up petition filed by any party/creditor.

The outcome of meetings of the board of directors needs to be made within 30 minutes from the closure of such meetings.

Earlier, the regulator amended LODR rules after the SEBI board approved a proposal in this regard.