Sebi makes dividend distribution policy compulsory for top 1,000 listed companies
New Delhi: To strengthen corporate governance practices and disclosure requirements, Sebi on Thursday decided that top 1,000 listed firms should formulate a dividend distribution policy.
"Requirement for formulation of dividend distribution policy by the existing top 500 listed entities has been extended to the top 1,000 listed entities on the basis of market capitalisation," Sebi said in a statement after conclusion of its board meeting.
In case of board meetings held for more than one day, Sebi said the financial results should be disclosed by listed entities within 30 minutes of end of the board meeting for the day on which such results are considered. Also, the regulator has decided to do away with the requirement to seek stock exchange's approval for change of name of a listed entity.
Further, the requirement to publish newspaper advertisements for the notice for board meetings where financial results are to be discussed and for quarterly statement on deviation or variation in use of funds, has been dispensed 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 each quarter, Sebi said.
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, among others, have been revised from half-year period to one year.
Sebi board has also cleared several amendments to LODR (Listing Obligations and Disclosure Requirements) Regulations.
"These amendments are aimed at ensuring gender neutrality and maintaining consistency within 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 said.
The provisions of LODR norms which become applicable to listed firms based on the market capitalisation criteria, should continue to apply even if such entities subsequently fall below the specified thresholds. Also, paid-up capital as well net-worth criteria should continue to apply to such entities unless the paid-up capital or net-worth falls and remains below the threshold for a period of three consecutive financial years, it added.
Moreover, Regulator Sebi on Thursday decided to have a new format for business responsibility and sustainability reporting (BRSR), and top 1,000 listed companies will be compulsorily required to prepare such reports from financial year 2022-23.
The requirement will be applicable for top 1,000 companies in terms of their market capitalisation. The move is expected to bring in greater transparency and enable market participants to identify and assess sustainability-related risks and opportunities.
The report will be called the BRSR and it will replace the existing Business Responsibility Report (BRR) filed by companies, Sebi said in a press release after conclusion of its board meeting. The BRSR will be applicable to the top 1,000 listed entities on a voluntary basis for financial year 2021-22 and on a mandatory basis from financial year 2022-23.
According to Sebi, the BRSR will lay considerable emphasis on quantifiable metrics, which allows for easy measurement and comparability across companies, sectors and time
periods.
