To strengthen corporate governance practices and disclosure requirements, market regulator Sebi decided on Thursday that the top 1,000 listed firms listed on the stock exchanges should formulate a dividend distribution policy.
“The need to formulate a dividend distribution policy by the current top 500 listed entities has been extended to the top 1,000 listed entities on the basis of market capitalization,” Sebi said in a statement.
In the case of board meetings held for more than one day, SEBI stated that the financial results should be disclosed by the listed entities within 30 minutes of the end of the board meeting for the day on which such results are considered goes. SEBI also said that promoters should disclose their intention to delist their company by making an initial public announcement.
The regulator also decided to remove the list of restricted activities or sectors from the definition of venture capital undertaking, to provide flexibility to venture capital funds registered under Alternative Investment Funds in making investments.
Markets also stated that listed firms should provide recording of analyst and investors on their website as well as in stock markets within 24 hours or before the next business day.
The regulator also approved a proposal regarding the applicability, constitution and the role of the Risk Management Committee (RMC).
SEBI said that to change the name of the listed entity, approval of the Stock Exchange will have to be taken. Also, there is a need to publish newspaper advertisements for notices of board meetings where financial results are to be discussed and a quarterly statement on deviations or variations in the use of funds was also sent along.
SEBI said that the timeline for submitting the report from time to time – details of investor complaints, corporate governance report and shareholding pattern – would be harmonized for 21 days from the end of each quarter.
The frequency of submission of compliance certificate relating to the facility of share transfer and issue of share certificate within 30 days for transfer, sub-division, among others, has been revised from half to yearly.
To strengthen these corporate governance practices, the SEBI Board approved several amendments to the LODR (Listing Objectives and Disclosure Requirements) Regulations.
“These amendments aim to ensure gender neutrality and maintain consistency within the LODR regulations, in addition to strengthening corporate governance practices and disclosure requirements and reducing compliance burdens on listed entities, consistent with certain provisions of the LODR Regulations with the Companies Act is.” said.
The provisions of the LODR criteria, which apply to listed firms based on market capitalization criteria, should apply even if such entities subsequently fall below the specified limits.
Paid-up capital as well as net-worth criteria should continue to apply to such entities until the paid-up capital or net worth falls and remains below the threshold for a period of three consecutive financial years.
The need to constitute the RMC has been expanded from the current top-500 listed entities to the top-1,000 listed entities by market capitalization.
The RMC must have a minimum of three members, with at least one independent director as its member of the board of directors.
The quorum for the meeting of the RMC should consist of two or one-third members of the committee, whichever is greater, including the presence of at least one member of the board of directors.
The role of the RMC is specified in which formulation of a detailed risk management policy and monitoring its implementation, periodic review of such policy, review and removal of appointments and terms of remuneration of the Chief Risk Officer (if any) Are included.
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