Listing and disclosure rules consolidation: A good step?

The Securities and Exchange Board of India (SEBI) notified the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, on 2 September. The regulations are designed to consolidate all post-listing requirements applicable to entities that have any securities listed on a stock exchange, thereby eliminating the need for issuers of multiple categories of securities to refer to multiple regulations.

With “streamlining” and “consolidation” as catchwords, the regulations consolidate the provisions of the listing agreements entered into between issuers and stock exchanges for issue of various types of securities such as equity shares, non-convertible debentures, non-convertible redeemable preference shares, Indian depository receipts, securitized debt instruments and mutual fund units, reducing the listing agreement to a much smaller document. SEBI’s press note on the notified regulations says the provisions of the regulations have been aligned with those of the Companies Act, 2013, and that forms of listing agreements will also be prescribed.

Continuing what seems to be a recent trend among Indian financial sector regulators, the regulations appear to be a hybrid mix of principles and prescriptions, with a chapter titled “Principles Governing Disclosures and Obligations of Listed Entity” followed by chapters prescribing obligations of listed entities in minute detail.

Sawant Singh is a partner and Aditya Bhargava is a principal associate at the Mumbai office of Phoenix Legal.