LODR Regulations

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“One Level Below”: Clarifying the Hierarchical Position of the Compliance Officer under SEBI LODR Regulations

Regulation 6(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR Regulations”), requires every listed entity to appoint a company secretary as a compliance officer. The responsibilities of such an officer includes, among other things, ensuring compliance with regulations, coordinating with relevant authorities, verifying accuracy of submissions, and overseeing grievance redressal mechanisms. On April 1, 2025, the Securities and Exchange Board of India (“SEBI”) released a clarification[1] on the position of the compliance officer in terms of Regulation 6 of the SEBI LODR.[2]Continue Reading “One Level Below”: Clarifying the Hierarchical Position of the Compliance Officer under SEBI LODR Regulations

Background

India Inc’s initial public offering (“IPO”) landscape has witnessed significant growth in recent years, with numerous companies entering the capital markets to fund their growth and offer exits to existing investors. An IPO in India requires navigating a complex regulatory framework, complying with various provisions, and addressing stakeholders’ interests, including employees with stock options. In our post[1], we had assessed companies’ eligibility to undertake an IPO in situations where any individual holds rights entitling them to acquire equity shares of the company, or where there are any outstanding convertible securities that can be converted into the company’s equity shares.Continue Reading Amendment to make companies with outstanding Stock Appreciation Rights IPO eligible: A few steps closer, but not there yet

SEBI Proposes to Unlock Listed Debt Markets for Category II AIFs

Introduction

The Securities and Exchange Board of India (“SEBI”), as part of its ongoing regulatory reforms, released a consultation paper on February 7, 2025, seeking public comments to review Regulation 17(a) of the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”). The objective is to enhance investment flexibility for Alternative Investment Funds (“AIFs”), particularly in debt securities, while addressing concerns arising from recent regulatory changes by way of allowing Category II AIFs to make up to 100% of their investment in certain listed debt securities as explained in detail below. As of now, Category II AIFs are allowed to make less than 50% of their investments in listed securities.Continue Reading SEBI Proposes to Unlock Listed Debt Markets for Category II AIFs

SEBI’s Hammer and the RPT Nail: Navigating SEBI’s Principles-Based Oversight of Related Party Transactions

Related party transactions (“RPTs”)[1] potentially represent an inherent conflict of interest between the interests of listed entities on the one hand and ‘related parties’ on the other. Since Indian listed entities are significantly promoter driven or closely held, SEBI has been constantly reforming the regulatory framework governing RPTs to mitigate the possibility of abuse.Continue Reading SEBI’s Hammer and the RPT Nail: Navigating SEBI’s Principles-Based Oversight of Related Party Transactions

Holding-Subsidiary Relationship – Legal & Regulatory Architecture

Background

Companies, as the business grows, operate through their subsidiaries for various reasons such as flexibility in operation of different units, expansion in different geographies, etc. While subsidiary is an entity over which the wholly owned subsidiary has control, the Companies Act, 2013 (“CA 2013”) recognises subsidiary companies as a separate legal entity.Continue Reading Holding-Subsidiary Relationship – Legal & Regulatory Architecture

Purpose & Effect Test for RPTs – How should Audit Commitees navigate it?

Regulatory Context

The definition of ‘Related Party Transaction’ (“RPT”) under Regulation 2(1)(zc) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”), inter alia provides that with effect from April 1, 2023, a transaction involving transfer of resources, services or obligations between “a listed entity or any of its subsidiaries on one hand, and any other person or entity on the other hand, the purpose and effect of which is to benefit a related party of the listed entity or any of its subsidiaries,” will also be regarded as an RPT (referred to below as the “Purpose and Effect Test”).Continue Reading Purpose & Effect Test for RPTs – How should Audit Commitees navigate it?

Recommendations on Changes to SEBI ICDR Regulations for Ease of Doing Business – Missing the Point

On January 11, 2024, SEBI issued its consultation paper on interim recommendations of its expert committee to harmonise the SEBI ICDR and LODR regulations.  The public has been invited to share comments on this paper.Continue Reading Recommendations on Changes to SEBI ICDR Regulations for Ease of Doing Business – Missing the Point

Will ‘sale of shares’ amount to ‘sale of an undertaking’ – Has the Conundrum been resolved?

Context

‘What would constitute an ‘undertaking’ of a company’ has been among the most hotly debated topics in the history of India’s company law regime. This question arises while evaluating whether a transaction falls within the purview of Section 180(1)(a) of the Companies Act, 2013 (“2013 Act”), which corresponds to Section 293(1)(a) of…

Market Rumours SEBI’s New Prescription and India Inc’s Dilemma SM

Context

With effect from October 1, 2023, India’s top 100 listed entities (based on market capitalisation) would have to mandatorily confirm, deny, or clarify market rumours to the stock exchanges, and this requirement extends to the top 250 listed entities with effect from April 1, 2024. The Securities and Exchange Board of India (“SEBI”), by way of notifying amendments to the LODR Regulations on June 14, 2023 (“LODR Amendments”), has introduced this mandatory requirement under Regulation 30 read with Schedule III of the LODR Regulations (referred to below as the “Market Rumours Amendment”).Continue Reading Market Rumours: SEBI’s New Prescription and India Inc’s Dilemma