Amendments in SEBI LODR Regulations 30 & 30A

In order to bring more transparency and to ensure timely disclosure of material events/ information by
listed entities, amendments in Listing Obligations and Disclosure Requirements Regulations were notified
on June 14,2023 amending the provisions of Regulation 30 and inserting Regulation 30A. Accordingly
Securities and Exchange Board of India vide circular no. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated
July 13, 2023, has provided four Annexures to specify the details that need to be provided while disclosing events given in Part A of Schedule III: Disclosure of Events or Information: Specified Securities.
The amendments are effective from July 14, 2023.

Key changes made in Regulation 30 are as follows:

• Amendment in Sub-regulation 4: Sub clause (c) & (d) has been added to provide the criteria for
  determination of materiality of events/ information. The amended provision is as follows:

• The listed entity shall consider the following criteria for determination of materiality of events/
  information:
• the omission of an event or information, which is likely to result in discontinuity or alteration
  of event or information already available publicly; or
• the omission of an event or information is likely to result in significant market reaction if the
  said omission came to light at a later date; or
• the omission of an event or information, whose value or the expected impact in terms of value,
  exceeds the lower of the following:
• two percent of turnover, as per the last audited consolidated financial statements of the
  listed entity;
• two percent of net worth, as per the last audited consolidated financial statements of the
  listed entity, except in case the arithmetic value of the net worth is negative;
• five percent of the average of absolute value of profit or loss after tax, as per the last three
  audited consolidated financial statements of the listed entity;”
• In case where the criteria specified in sub-clauses (a), (b) and (c) is not applicable, an event or
  information may be treated as being material if in the opinion of the board of directors of the
  listed entity, the event or information is considered material:
  Provided that any continuing event or information which becomes material pursuant to
  notification of these amendment regulations shall be disclosed by the listed entity within
  thirty days from the date of coming into effect of the Securities and Exchange Board of India
  (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2023.
• The listed entity shall frame a policy for determination of materiality, based on criteria specified
  in this sub-regulation, duly approved by its board of directors, which shall be disclosed on its
  website.

• Amendment in Sub-regulation 6: This sub regulation provides the time limit for disclosing the events
  as specified in Part A of Schedule III. Earlier the time limit was twenty-four hours from the occurrence
  of event or information which has been now amended as follows:
  The listed entity shall disclose to the stock exchange(s) all events/ information material in terms of
  the provisions of this regulation as soon as reasonably possible and not later than the following:
• thirty minutes from the closure of the meeting of the board of directors in which the decision
  pertaining to the event or information has been taken;
• twelve hours from the occurrence of the event or information, in case the event or
  information is emanating from within the listed entity;
• twenty-four hours from the occurrence of the event or information, in case the event or
  information is not emanating from within the listed entity:
  ▪ Provided that disclosure with respect to events for which timelines have been specified in
  Part A of Schedule III shall be made within such timelines.
• Amendment in Sub-regulation 11: This sub regulation provides that the listed entity may on its own
  initiative also, confirm or deny any reported event or information to stock exchange. The following
  provisos are inserted thereafter:

Provided that the top 100 listed entities (with effect from October 1, 2023) and thereafter the top 250
listed entities (with effect from April 1, 2024) shall confirm, deny or clarify any reported event or
information in the mainstream media which is not general in nature and which indicates that
rumours of an impending specific material event or information in terms of the provisions of this
regulation are circulating amongst the investing public, as soon as reasonably possible and not later
than twenty four hours from the reporting of the event or information:

Insertion of Regulation 30A: Disclosure requirements for certain types of agreements binding listed
entities

(1) All the shareholders, promoters, promoter group entities, related parties, directors, key managerial
personnel and employees of a listed entity or of its holding, subsidiary and associate company, who
are parties to the agreements specified in clause 5A of para A of part A of schedule III which either
directly or indirectly or potentially impact the management or control of the listed entity, shall inform
the listed entity about the agreement to which such a listed entity is not a party, within two working
days of entering into such agreements or signing an agreement to enter into such agreements:
Provided that for the agreements that subsist as on the date of notification of clause 5A to para A
of part A of schedule III, the parties to the agreements shall inform the listed entity, about the
agreement to which such a listed entity is not a party and the listed entity shall in turn disclose all
such subsisting agreements to the Stock Exchanges and on its website within the timelines as
specified by the Board.
(2) The listed entity shall disclose the number of agreements that subsist as on the date of notification
of clause 5A to para A of part A of schedule III, their salient features, including the link to the webpage
where the complete details of such agreements are available, in the Annual Report for the financial
year 2022-23 or for the financial year 2023-24.

Disha Gupta, Audit Associate, SW India