Finance
By: Shree1news, 25 MAR 2021
To strengthen corporate governance practices and disclosure requirements, Sebi on Thursday decided that top-1,000 listed firms ought to formulate a dividend distribution policy.
“Requirement for formulation of dividend distribution policy by the present top-500 listed entities has been extended to the top-1,000 listed entities on the basis of market capitalisation,” Sebi stated in a statement after conclusion of its board meeting.
The regulator also cleared a proposal in relation to applicability, constitution and role of the risk management committee (RMC).
Sebi stated requirement to seek inventory change approval for change of name of a listed entity has been dispensed with.
Also, the requirement to publish newspaper advertisements for the notice to board meetings where financial results are to be discussed and for quarterly statement on deviation or variation in use of funds, has been disbursed with.
The timelines for submission of periodic reports — statement of investor complaints, corporate governance report and shareholding pattern — will be harmonised to 21 days from the end of every quarter, Sebi stated.
Frequency of submission of compliance certificates relating to share transfer facility and issuance of share certificates within 30 days of lodgement for transfer, sub-division, amongst others have been revised from half-year to annual.
To strengthen these corporate governance practices, Sebi board accredited a number of amendments to the LODR (Listing Obligations and Disclosure Requirements) Regulations.
“These amendments are aimed at ensuring gender neutrality and maintaining consistency throughout the LODR Regulations, harmonising certain provisions of the LODR Regulations with Companies Act, in addition to strengthening the corporate governance practices and disclosure requirements and easing the compliance burden on listed entities,” Sebi stated.
The provisions of LODR norms, which turn out to be relevant to listed corporations based mostly on the market capitalisation criteria, ought to proceed to apply even if such entities subsequently fall under the specified thresholds.
Paid-up capital as well net-worth criteria ought to continue to apply to such entities unless the paid-up capital or networth falls and continues to remain below the threshold for a period of three consecutive financial years, it added.
The requirement to constitute the RMC has been extended to the top-1,000 listed entities by market capitalisation from the existing top-500 listed entities.
The RMC should have minimum three members with majority of them being members of the board of directors, together with at least one independent director.
The quorum for a meeting of the RMC needs to be either two members or one third of the members of the committee, whichever is higher, together with at least one member of the board of directors in attendance.
The role of the RMC has been specified which incorporates formulation of a detailed risk management policy and monitoring its implementation, periodic review of such policy, review of the appointment, and removal and terms of remuneration of the chief risk officer (if any).
Source:A-N
