Substantial amendments vide SEBI(LODR) (Second Amendment) Regulation, 2021 Effective from 6th May, 2021

    

Insertion of Definition
Working days‖ means working days of the stock exchange where the securities of the entity are listed.
Applicability of Regulation The provisions of these regulations which become applicable to listed entities on the basis of market capitalisation criteria shall continue to apply to such entities even if they fall below such thresholds
Regulation	Before Amendment	After Amendment	Remarks
7 Share Transfer Agent	The listed entity shall submit a compliance certificate to the exchange within one month of end of each half of the financial year.	The listed entity shall submit a compliance certificate to the exchange within thirty days from end of the financial year.	Now the half yearly compliance certificate is to be submitted once in a financial year.
21 Risk Management Committee	(2) The majority of members of Committee shall consist of members of the board of directors.     (3A) Committee shall meet at least once in a year.                                                     (5) The provisions of this regulation shall be applicable  to  top 500 listed entities determined on the basis of market capitalisation, as at the end of the immediate previous financial year.	(2) The Committee shall have minimum 3 members with majority of them being members of the board of directors including at least one independent director. (3A) Committee shall meet at least Twice in a year. Insertion of new sub-regulation (3B) The quorum for a meeting of the Committee shall be either two members or one third of the members of the committee, whichever is higher, including at least one member of the board of directors in attendance. (3C) The meetings of the committee shall be conducted in such a manner that on a continuous basis not more than one hundred and eighty days shall elapse between any two consecutive meetings. Provided that the role and responsibilities of the Risk Management Committee shall mandatorily include the performance of functions specified in Part D of Schedule II   (5) The provisions  of  this  regulation  shall  be  applicable  to  top 1000 listed entities determined on the basis of market capitalisation, as at the end of the immediate previous financial year   (6) The Risk Management Committee shall have powers to seek information from any employee, obtain outside legal or other professional advice and secure attendance of outsiders with relevant expertise, if it considers necessary.	Composition of the committee shall be at least three directors with at least one independent director     A committee shall hold minimum two meeting   Quorum of meeting was not defined earlier however as per amendment Quorum of the committee shall be 2 or 1/3rds of total members of RMC, whichever is higher Including at least 1 member of Board As per latest amendment two meeting are required to be conducted in a financial year the gap between two consecutive meetings shall Not be more than 180 days As provided under Part D of Schedule II, that inter alia includes: a)       Formulating of risk management policy; b)      Oversee implementation of the same; c)       Monitor and evaluate risks basis appropriate methodology, processes and systems. d)      Appointment, removal and terms of remuneration of CRO. Top 1000 listed companies need to constitute Risk Management Committee   The power of RMC include seeking of information from employee, obtain outside legal or other professional advice and secure attendance of outsiders with relevant expertise,
24A Secretarial audit and Secretarial Compliance Report	No time limit was prescribed before amendment	Every listed entity shall submit a secretarial compliance report in such form as specified, to stock exchanges, within sixty days from end of each financial year	Earlier in no time limit was prescribed in Regulation 24A however a circular was issued On Feb 8, 2019 prescribing the time line. The given amendment is in alignment with the said circular.
27 Corporate Governance Requirements	The listed entity shall submit a quarterly compliance report on corporate governance in the format as specified by the Board from time to time to the recognized stock exchange(s) within fifteen days from close of the quarter	The listed entity shall submit a quarterly compliance report on corporate governance in the format as specified by the Board from time to time to the recognized stock exchange(s) within twenty-one days from the end of each quarter	Corporate grievance Report to be submitted within 21 days from the end of quarter in place of 15 days from the end of quarte
31A Re-classification of status of a promoter/ person belonging to promoter group to public	(ii) the board of directors of the listed entity shall analyze the request and place the same before the shareholders in a general meeting for approval along with the views of the board of directors on the request: Provided that there shall be a time gap of at least three months but not exceeding six months between the date of board meeting and the shareholder’s meeting considering the request of the promoter(s) seeking re-classification.   (iii)the request of the promoter(s) seeking re-classification shall be approved in the general meeting by an ordinary resolution in which the promoter(s) seeking re-classification and persons related to the promoter(s) seeking re-classification shall not vote to approve such re-classification request	(ii) the board of directors of the listed entity has analyzed such request in the immediately next board meeting or within three months from the date of receipt of the request from its promoter(s), whichever is earlier and has placed the same before the shareholders in a general meeting for approval along with the views of the board of directors on the request: Provided that there shall be a time gap of at least one month but not exceeding three months between the dates of the board meeting and the shareholders ‘meeting considering the request of the promoter(s) seeking reclassification   (iii) the request of the promoter(s) seeking reclassification has been approved in the general meeting by an ordinary resolution in which the promoter(s) seeking reclassification and the persons related to him/her/it have not voted to approve such reclassification request: Provided that the provisions of this sub-clause shall not apply in cases: (a) where the promoter(s) seeking reclassification and persons related to the promoter(s) seeking reclassification, together, do not hold more than one percent of the total voting rights in the listed entity; (b) where reclassification is pursuant to a divorce.	The request of reclassification now to be considered by the Board immediately in the next board meeting or within 3 months from the receipt of request of reclassification by promoter whichever is earlier         The time gap between the Board meeting and the shareholder meeting is revised now the time gap shall be minimum one month and maximum 3 months
Regulation 32 Statement of deviations and variations	Where the listed entity has appointed a monitoring agency to monitor utilization of proceeds of a public or rights issue, the listed entity shall submit to the stock exchange(s) any comments or report received from the monitoring agency.	Where the listed entity has appointed a monitoring agency to monitor utilization of proceeds of a public or rights issue, the listed entity shall submit to the stock exchange(s) any comments or report received from the monitoring agency within forty-five days from the end of each quarter	Comments of monitoring agency in respect of deviation and variation with regard to utilization of proceeds to be submitted quarterly within 45 days of end of quarter
Regulation 34 Annual Report	the top one thousand listed   entities   based   on   market   capitalization business responsibility report describing the initiatives taken by them from an environmental, social and governance perspective, in the format as specified by the Board from time to time:	The requirement of submitting a business responsibility report shall be discontinued after the financial year 2021–22 and thereafter, with effect from the financial year 2022–23, the top one thousand listed entities based on market capitalization shall submit a business responsibility and sustainability report in the format as specified by the Board from time to time Provided further that even during the financial year 2021–22, the top one thousand listed entities may voluntarily submit a business responsibility and sustainability report in place of the mandatory business responsibility report	Submission of business responsibility statement to be discontinued after the F/Y 2021-22 and from F/Y 2022-23 the Companies shall submit business responsibility and sustainability report same can be submitted by Companies on voluntary basis.
Regulation 40 Transfer Or transmission Or transposition of securities.	The listed entity shall ensure that the share transfer agent and/or the in-house share transfer facility, as the case may be, produces a certificate from  a  practicing company secretary within one month of the end of each half of the financial year, certifying that all certificates have  been issued  within  thirty days of the date of  lodgement  for  transfer,  sub-division, consolidation, renewal, exchange or endorsement of calls/allotment monies	The listed entity shall ensure that the share transfer agent and/or the in-house share transfer facility, as the case may be,  produces  a certificate  from  a  practicing company secretary within thirty days from end of the financial year, certifying that all certificates have  been issued  within  thirty days of the  date  of  lodgement  for  transfer,  sub-division, consolidation, renewal, exchange or endorsement of calls/allotment monies	Certificate from practicing company secretary that all the certificate in respect of issue of lodgment, transfer sub-division, consolidation renewal, exchange or endorsement of calls/allotment monies has been issued within 30 days to be obtained once in a Financial year in place of half yearly certificate
Regulation 43A Dividend Distribution Policy	The top 500 listed entities shall formulate a dividend distribution policy which shall be disclosed in their annual reports and on their websites	The top 1000 listed entities shall formulate a dividend distribution policy which shall be disclosed on the website of the listed entity and a web-link shall also be provided in their annual reports	Now top 1000 listed Companies to formulate dividend distribution policy which shall be displayed on website of Company the link of which shall be provided in annual report as well
Regulation 44 Meeting of Shareholder and voting	The listed entity shall submit to the stock exchange, within 48 hours of conclusion of its General Meeting, details regarding the voting results in the format specified by the Board.	The listed entity shall submit to the stock exchange, within 2 working days of conclusion of its General Meeting, details regarding the voting results in the format specified by the Board.	Now voting result to be submitted to stock exchange within 2 working days in place of 48 hours of conclusion of meeting
Regulation 45 Change in name of listed Entity	On receipt of confirmation regarding name availability from ROC, before filing the request for change of name with the Registrar of Companies in terms of provisions laid down in Companies Act, 2013 and rules made thereunder, the listed entity shall seek approval from Stock Exchange by submitting a certificate from chartered accountant stating compliance with conditions.	Upon compliance with the conditions for change of name laid down in Companies Act, 2013 and rules made thereunder, the listed entity, in the explanatory statement to the notice seeking shareholders’ approval for change in name, shall include a certificate from a practicing-chartered accountant stating compliance with conditions	Now, no requirement of SE approval for change in name is required and the certificate by the Practicing Chartered accountant to be attached with explanatory statement of shareholder meeting notice.

 

Conclusion :- The prime objective of introducing SEBI(LODR) (Second Amendment) Regulation, 2021 is to align the given regulation with Companies Act 2013 and the SEBI(ICDR) regulation 2018, whereby the given regulations have focused on gender neutrality by adding ‘her’ along with ’his’ as the main motive of the SEBI is to protect the interest of its investors, therefore with these amendments the SEBI, has focused in bringing more Companies under the Compliance of the Regulation by replacing the applicability of provision on top 1000 listed Companies in place of Top 500 listed Companies. Further to this, we have tried to capture major amendments in erstwhile regulations by SEBI(LODR) (Second Amendment) Regulation, 2021, whereas the other amendments in schedules, website disclosures etc. shall be covered in our upcoming article for our readers.

Here is the link of proposed amendment: 

https://www.sebi.gov.in/legal/regulations/may-2021/securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-second-amendment-regulations-2021_50100.html

This Article has been Compiled by Deepika Sharma (Senior Associate), and  Suruchi Garg (CS Trainee) You can direct your queries or comments to the author at deepika@factumlegal.com)

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