SEBI Drives Business Efficiency: New Regulatory Measures for Listed Entities

Industrials

a day agoPWG Publications

Introduction to SEBI's Initiative

The Securities and Exchange Board of India (SEBI) has been actively working to enhance the ease of doing business in India, particularly for listed companies. In line with the government's broader strategy to boost economic growth and attract foreign investment, SEBI has introduced several regulatory reforms. These efforts aim to reduce compliance burdens, streamline processes, and improve corporate governance practices among listed entities.

Recent SEBI Circulars and Their Impact

In December 2024, SEBI released a circular based on recommendations from an expert committee formed in 2023. This circular focuses on integrating filings, reducing regulatory burdens, improving disclosure requirements, and enhancing corporate governance standards.

Key Highlights of the Circular:

Integrated Filing: SEBI has introduced an integrated filing system for governance and financial reports to simplify compliance processes. This system requires listed companies to file their quarterly governance reports within 30 days and financial reports within 45 or 60 days, depending on the case[5].
Disclosure of Key Events: Listed companies must disclose significant events such as acquisitions of shares or voting rights in unlisted businesses and updates on tax-related disputes on a quarterly basis[1].
Regulatory Burden Reduction: The committee suggested rationalizing reporting requirements to simplify compliance processes for listed entities[1].
Single Filing System: Building on earlier initiatives, SEBI supports a single filing system for multiple submissions, saving time and resources for companies[1].

Advancements in Corporate Governance

SEBI's efforts also emphasize strengthening corporate governance. This includes enhancing transparency in related-party transactions and ensuring that secretarial auditors meet specific qualification criteria[1].

Key Corporate Governance Enhancements:

Related Party Transactions: SEBI emphasized the need for detailed disclosures regarding related-party transactions, ensuring minority shareholder protection[1].
Secretarial Auditor Qualifications: To qualify as a secretarial auditor for listed companies, a person must be a peer-reviewed company secretary with no disqualifications as per the company's board of directors[1].

ESG Disclosures and Sustainability Reporting

In July 2023, SEBI introduced a framework for Business Responsibility and Sustainability Reporting (BRSR) disclosures. This framework is part of broader ESG (Environmental, Social, and Governance) initiatives to ensure listed entities report on sustainability practices.

Recent Developments in BRSR and ESG:

BRSR Core and Value Chain Disclosures: SEBI recommended substituting 'assurance' with 'assessment' for BRSR Core to reduce financial burdens. Value chain reporting will cover significant upstream and downstream partners[3].
Voluntary Approach for Value Chain Disclosures: Initially, ESG disclosures for the value chain will be voluntary, starting from FY 2024-25, with assessment or assurance applicable from FY 2026-27[3].

SEBI's Continued Efforts for Transparency and Efficiency

Under the leadership of its new chairman, Tuhin Kanta Pandey, SEBI continues to focus on enhancing transparency and ease of doing business. The regulator has constituted a high-level committee to review conflicts of interest and simplify regulatory processes[4].

Recent Initiatives by SEBI:

Conflicts of Interest Review: A high-level committee will examine and update disclosure norms related to conflicts of interest, last revised in 2008[4].
Increased Investment Threshold for FPIs: The investment threshold for granular ownership disclosures by foreign portfolio investors (FPIs) has been raised from Rs 25,000 crore to Rs 50,000 crore[4].

Conclusion

SEBI's proactive measures to streamline regulatory processes, enhance corporate governance, and promote sustainability reporting are pivotal for boosting the Indian economy. These reforms not only reduce compliance costs for listed entities but also foster a more transparent and efficient capital market environment. As India continues to attract foreign investment and grow economically, SEBI's role in simplifying regulations remains crucial.

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