Relaxation from Compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements)

Posted On - 26 October, 2023 • By - King Stubb & Kasiva

[1] In a recent development, SEBI issued a circular on July 11, 2023, titled “Master Circular,” which provided certain relaxations for listed entities with respect to Annual General Meetings (AGMs) and general meetings held electronically. The circular specifically exempted these entities from the applicability of Regulation 36(1)(b) of the LODR Regulations for AGMs and Regulation 44(4) of the LODR Regulations for general meetings held electronically until September 30, 2023.

However, in light of the prevailing circumstances and representations received from various stakeholders, SEBI has decided to extend these relaxations. The extension, as per SEBI’s latest announcement, will now be in effect until September 30, 2024.

This development follows a parallel move by the Ministry of Corporate Affairs (MCA), which issued General Circular No. 09/2023 on September 25, 2023. The MCA’s circular extended the relaxation for listed entities from sending physical copies of financial statements, including the Board’s report, Auditor’s report, or other necessary documents to shareholders, for AGMs conducted until September 30, 2024.

The extension of these relaxation measures is aimed at providing much-needed flexibility to listed entities in India. The ongoing pandemic has disrupted business operations and necessitated the use of digital platforms for conducting meetings and sharing financial information. These relaxations offer relief to companies by reducing the compliance burden associated with physical documentation and in-person meetings.

It is essential to note that while SEBI has extended these relaxations, listed entities must adhere to certain conditions outlined in Section VI-J of Chapter VI of the Master Circular. These conditions are intended to ensure transparency, accountability, and compliance with the LODR Regulations.

SEBI’s authority to issue these relaxations is derived from Section 11(1) of the Securities and Exchange Board of India Act, 1992, read in conjunction with Regulation 101 of the LODR Regulations. Moreover, it is crucial for listed entities to be aware that the relaxations provided herein are subject to the provisions of the Companies Act, 2013, and any rules made thereunder.

This move by SEBI reflects the regulator’s commitment to supporting businesses during challenging times while maintaining regulatory oversight and investor protection. Listed entities in India are encouraged to stay updated with SEBI’s guidelines and ensure compliance with the evolving regulatory landscape.

The extension of these relaxations is expected to provide much-needed flexibility to businesses as they navigate the uncertainties and challenges posed by the ongoing global health crisis. Companies are encouraged to proactively manage their compliance obligations while leveraging these measures to streamline their operations and meet the needs of their stakeholders.