SEBI proposes doubling threshold for 'High Value Debt Listed Entities' to Rs 1,000 Cr

Markets regulator Securities and Exchange Board of India (SEBI) has proposed raising the threshold for identifying High Value Debt Listed Entities (HVDLEs) to Rs 1,000 crore from Rs 500 crore at present to reduce compliance burdens.

Currently, an entity having outstanding value of listed non-convertible debt securities of Rs 500 crore and above are referred to as 'High Value Debt Listed Entities'.

In its consultation paper, SEBI has proposed introducing a sunset clause that would end governance obligations if an HVDLE's outstanding debt falls below the threshold for a specified period, providing more flexibility.

It has suggested a dedicated chapter within LODR (Listing Obligations and Disclosure Requirements) Regulations focused solely on corporate governance norms for HVDLEs distinguishing them from equity-listed entities.

Also, it has been proposed filing of governance reports in XBRL format, voluntary Business Responsibility and Sustainability Reporting (BRSR), and harmonise HVDLE reporting with equity-listed entities.

Further, SEBI has proposed relaxation for HVDLEs which are not companies as per the Companies Act, 2013, relaxation with regard to the constitution of the Nomination and Remuneration Committee (NRC), Risk Management Committee (RMC) and Stakeholders Relationship Committee (SRC).

To avoid the constitution of multiple committees by HVDLEs, SEBI has proposed that the board of directors of an HVDLE may either choose to constitute NRC/RMC/SRC or may ensure that the functions of these committees are delegated and discharged by the audit committee.

"It is proposed that the threshold of listed outstanding non-convertible securities for identification of a debt listed entity as HVDLE may be increased from Rs 500 crore to Rs 1,000 crore," SEBI said in its consultation paper on Thursday.

Also, SEBI has proposed setting a cap on the total number of committees a director can serve on, whether in equity or debt-listed entities. This would help in preventing over-commitment and ensure they can fulfil their responsibilities effectively.

It has proposed that committee limits for directors should include HVDLEs, along with equity-listed companies, to protect investors and ensure directors have sufficient time for each role.

The proposals, part of corporate governance norms, for HVDLEs are aimed at promoting ease of doing business and the interest of investors in such HVDLEs the Securities and Exchange Board of India (Sebi) has sought public comments till November 15 on the proposals.