[Vatsal Jain and Vedant Bhardwaj Singh are 3rd year B.A., LL.B. (Hons) students at Hidayatullah National Law University] On 4 May 2023, the Securities and Exchange Board of India (‘SEBI’), by way of a circular titled ‘Additional requirements for the issuers of transition bonds’ (‘Circular’) laid down certain additional compliance measures for the issuance of transition bonds to prevent the...
Unraveling “Materiality” in SEBI’s Consultation Paper: Legal Perspectives and Recommendations
[Shantanu Dhingra is a 3rd year law student at the National Law University Odisha] The Securities and Exchange Board of India (SEBI) on 20 February 2023 released a consultation paper focused on streamlining disclosures by listed entities, intending to strengthen compliance with the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. Central to this post is the notion of...
Designing a Framework for Disclosures of “Market Rumors” under the LODR Regulations
[Harsh N Dudhe is a IV year student at NALSAR University of Law, Hyderabad] Much has already been said (here and here) about the pitfalls of the mandate proposed by the Securities and Exchange Board of India (SEBI) on top 250 listed companies to confirm or deny market rumors, as part of the continuous disclosure mechanism. The major criticism is that such disclosures would premature and may...
SEBI’s Proposed Disclosure Regime: Impact on Public M&A and Directors’ Liabilities
[Shivam Yadav, Amudavalli Kannan, and Shreyas Bhushan are with Resolut Partners] Institutional investors, listed companies, and retail shareholders – three key market participants – will be watching SEBI with eagle-eyes while it attempts to implement a new disclosure regime, as set out in its recent consultation paper (Consultation Paper). Most of SEBI’s proposals are well-intentioned and...
SEBI Proposals to Revamp the Continuing Disclosure Regime
A robust continuing disclosure regime is a sine qua non for maintaining efficient capital markets. Over the years, the Securities and Exchange Board of India (SEBI) has developed and enhanced a continuing disclosure regime for Indian listed companies, which is now encapsulated in regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘LODR Regulations’)...
SAT on the Non-Liability of a Company Secretary for Incorrect Disclosures
On 1 November 2022, the Securities Appellate Tribunal (SAT) in V. Shankar v. Securities and Exchange Board of India exonerated the company secretary of Deccan Chronicle Holdings Limited (DCHL) from liability for certain misstatements and incorrect disclosures made by the company. Background and Decision The Securities and Exchange Board of India (SEBI) had conducted investigation for certain...
India’s Changing Landscape of ESG Disclosures
[Aanchal Kabra is a 5th year B.A. LLB (Hons.) student at the West Bengal National University of Juridical Sciences, Kolkata] Sustainable finance has been gaining considerable prominence in corporate India. This conception of finance refers to finance which integrates environmental, social, and governance (‘ESG’) criteria into business and investment decisions, in an effort to increase benefits to...
Double Materiality in Indian ESG Disclosures
[Aanchal Kabra is a 5th year B.A. LLB (Hons.) student at the West Bengal National University of Juridical Sciences, Kolkata] The concept of ‘materiality’ in financial disclosures was first introduced in the United States Securities Act of 1993. Thereafter, the United States Securities and Exchange Commission (‘SEC’) has maintained a consistent understanding of what information constitutes...
Applicability of Significant Beneficial Owner Provisions to Limited Liability Partnerships
[Gaurav Pingle is practising company secretary and can be reached at [email protected]] With an intention to regulate limited liability partnerships (‘LLPs’) more stringently, the Ministry of Corporate Affairs (‘MCA’) issued a notification dated February 11, 2022 (‘MCA Notification’) whereby certain provisions of the Companies Act, 2013 are now applicable to LLPs. The said amendment falls...
Directors’ Liability and Climate Risk in India
Climate change has garnered significant attention given that it poses a serious challenge to sustainable development. No longer is it merely within the domain of voluntary conduct on the part of corporations. Instead, it is a material financial risk that corporations encounter, thereby imposing duties on the boards of directors of corporations to recognise and address climate risk. In “Directors’...
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