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The Securities and Exchange Board of India (SEBI), on Tuesday, removed certain disclosure requirements for acquirers and promoters of companies.
Companies will not have to disclose a stake purchase or sale of up to 5 percent by promoters or anybody else to the stock exchanges as systems at the depository will do this on their own. This will also ease the penalty burden on companies, since SEBI imposed fines when companies became lax with disclosures.
Under the new rule, some of the disclosure requirement over an acquisition or sale of 5 percent shares in a company and any change of 2 per cent thereafter, annual shareholding disclosures and creation or invocation or release of encumbrance (pledge) shares will not be required, SEBI said. The amendment will be effective from April 1, 2022. Under the new system driven disclosures (SDD), exchanges will disseminate data based on its aggregation from depositories without human intervention.
Other amendments
SEBI has also amended other listing obligations. The amendments pertain to issuers who have listed non-convertible debt securities, non-convertible redeemable preference shares, perpetual debt instruments and/ or perpetual non-cumulative preference shares. Only emails of annual reports and other documents will have to be sent to holders of non-convertible securities by companies, the SEBI said.
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