The Securities Exchange Board of India (“SEBI”) vide circular dated January 7, 2022 (“Circular”) stipulated the disclosure obligations of listed entities in relation related party transactions (“RPT”).
The SEBI vide its notification dated September 7, 2021 had introduced regulation 15(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”). The said notification stated that Regulations 15 to 27 of the LODR, which lays down the obligations of a listed entity which has listed its specified securities and non-convertible debt securities, shall be applicable to high value debt listed entities on a comply or explain basis. It is to be noted that high value debt listed entities are the entities which have listed non-convertible debt securities and have an outstanding value of listed non-convertible debt securities of Rs. 500 crore (Rupees five hundred crore) and above.
Further, vide amendment dated November 9, 2021, regulation 23 of the LODR was amended to state that listed entities having listed specified securities must submit to the stock exchanges disclosure of RPTs.
SEBI vide circular its circulate bearing number SEBI/HO/CFD/CMD1/CIR/P/2021/662 dated November 22, 2021, also enumerated disclosure obligations of listed entities in relation to RPTs with respect to specified securities. The disclosure obligations are as follows:
As per the Circular, keeping in mind that provisions of regulation 23 of the LODR would be applicable to high value debt listed companies, provisions of the SEBI circular dated November 22, 2021 shall be made applicable to high value debt listed entities.
Please find a copy of the circular, here.
This update has been contributed by Adity Chaudhury (Partner) and Nipuna Varman (Associate).
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