[Key Highlights] SEBI (LODR) (Sixth Amendment) Regulations, 2022

The SEBI vide. Notification No. SEBI/LAD-NRO/GN/2022/103, Dated 14.11.2022 has notified the SEBI (LODR) ) (Sixth Amendment) Regulations, 2022. Under the new norms, the SEBI has notified various amendments in provisions relating to independent directors, financial statements, Draft Scheme of Arrangement and Scheme of Arrangement, Fee in respect of the draft scheme of arrangement, etc. The amendments are effective from 14.11.2022. The key highlights of the SEBI (LODR) (Sixth Amendment) Regulations, 2022 are discussed in detail hereunder –

1. Resolution no longer required ‘mandatorily’ for Appointment or removal of Independent Director

Earlier, a Special Resolution was mandatorily required to appoint an independent director. Now, if a listed entity, where a special resolution for the appointment of an independent director fails to get passed, but the votes cast in favor exceed the votes cast against the resolution by public shareholders, then such appointment of an independent director shall be deemed to have been made under SEBI (LODR) Regulations, 2015.

Further, such an independent director shall be removed only if the votes cast in favour of the resolution proposing the removal exceed the votes cast against the resolution and the votes cast by the public shareholders in favour of the resolution exceed the votes cast against the resolution.

This is a welcome move. It would ease the process for the appointment of Independent Directors in listed entities. This amendment will play a major role in the event where a special resolution could not be passed for a person for appointment as Independent director

2. Entities with preferential issue and QIPs shall also provide Statement of deviation(s) or variation(s)

Earlier, the listed entity were submit to the stock exchange the following statement(s)on a quarterly basis for public issue, rights issue, preferential issue, etc. Now SEBI has expanded the scope of the applicability of the Statement of deviation(s)or variation(s) for entities who has done preferential issue and QIPs. Majorly SEBI has now increase the scope of disclosure for the entities which has raised money via preferential issue and QIPs.

3. Now greater disclosures applicable to listed entities for Financial Results, Audited or unaudited

Listed entities are required to prepare and submit un-audited or audited quarterly and year to date standalone financial results on a quarterly basis in the format as specified by the Board within 45 days from the end of the quarter, other than last quarter, to the recognized stock exchange. Now, in order to enhance disclosure requirements of the listed entities, SEBI has directed that, for the last quarter of the financial year, the listed entity shall submit un-audited or audited quarterly and year to date standalone financial results within 60 days from the end of the quarter to the recognized stock exchange(s).

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