COMMON OBLIGATIONS OF LISTED COMPANIES UNDER SEBI (LODR) REGULATIONS, 2015

[Mr. M. GOVINDARAJAN]

Listed company

Section 2(52) of the Companies Act, 2013 defines the expression ‘listed company’ as a company which has any of its securities listed on any recognized stock exchange. 

Regulations

Securities and Exchange Board of India (‘SEBI’ for short) notified ‘SEBI (Listed Obligations and Disclosures Requirement) Regulations, 2015 (‘LODR’ for short) vide Notification No.  SEBI/LAD-NRO/GN/2015-16/013, dated  02.09.2015.       .

The LODR consolidated the provisions contained in-

• Equity listing agreement;
• Listing agreement for listing on SME Exchange;
• Listing agreement for listing Indian Deposit Receipt;
• Listing agreement of listing debt securities;
• Listing agreement for listing securitized Debt instruments;

Common obligations

Chapter III of the Regulations provides the common obligations that are to be carried out by listed entities as detailed below-

• General obligations of compliance;
• Compliance Officer and his compliances;
• Share Transfer Agent;
• Co-operation with intermediaries registered with the Board;
• Preservations of documents;
• Scheme of arrangement;
• Payment of dividend or interest or redemption or repayment;
• Grievance redressal mechanism;
• Fees and other charges to be paid in the recognized stock exchanges.

General obligations of compliance

The listed entity shall ensure those key managerial personnel, directors, promoters or any other person dealing with the listed entity, complies with responsibilities or obligations, if any, assigned to them under these regulations.

Obligations of Compliance Officer

Every listed entity is to appoint Compliance Officer compulsory.  The Compliance Officer shall be a Company Secretary.  The Regulations imposes the following obligations on the Compliance Officer-

• to ensure conformity with the regulatory provisions applicable to the listed entity in letter and spirit;
• to co-ordinate with and reporting to the Board, recognized stock exchange(s) and depositories with respect to compliance with rules, regulations and other directives of these authorities in manner as specified from time to time;
• to ensure that the correct procedures have been followed that would result in the correctness, authenticity and comprehensiveness of the information, statements and reports filed by the listed entity under these regulations;
• to monitor email address of grievance redressal division as designated by the listed entity for the purpose of registering complaints by investors.

Obligations in relation to Share Transfer Agent

Share Transfer Agent means-

• any person, who on behalf of any body corporate, maintains the records of holders of securities issued by such body corporate and deals with all matters connected with the transfer and redemption of its securities;
• a department or division, by whatever name called, of a body corporate performing the activities referred to above if at any time the total number of the holders of its securities issued exceed one lakh.

The list entity is to appoint share transfer agent or manage the share transfer facility in house.  The listed entity shall either register with the Board as a Category II share transfer agent or appoint Registrar to an issue and share transfer agent registered with the Board.

The listed entity shall submit a compliance certificate to the Exchange within 30 days from the end of the financial year, duly signed by the Compliance Officer and authorized representative of share transfer agent.  In case of change in or appointment of new share transfer agent, the listed entity shall enter into a tripartite agreement between the existing share transfer agent, the new share transfer agent and the listed entity, in the manner as specified by the Board from time to time.  If the share transfer is maintained by in-house the agreement shall be entered into between the listed entity and the new share transfer agent.  The listed entity shall intimate such appointment to the stock exchange(s) within seven days of entering into the agreement.  The said agreement shall be placed in the subsequent meeting of the board of directors.  

Co-operation with intermediaries

The listed entity shall co-operate with and submit correct and adequate information to the intermediaries registered with the Board such as credit rating agencies, registrar to an issue and share transfer agents, debenture trustees etc, within timelines and procedures specified under the Act, regulations and circulars issued there under.

Preservation of documents

The listed entity shall have a policy for preservation of documents, approved by its board of directors, classifying them in at least 2 categories as follows-

• documents whose preservation shall be permanent in nature ;
•  documents with preservation period of not less than 8 years after completion of the relevant transactions.

The documents may be preserved in electronic form.

Filing of information

The listed entity shall file the reports, statements, documents, filings and any other information with the recognized stock exchange(s) on the electronic platform as specified by the Board or the recognized stock exchange(s).

Scheme of arrangement

The listed entity shall ensure that any scheme of arrangement /amalgamation /merger /reconstruction /reduction of capital etc. to be presented to any Court or Tribunal does not in any way violate, override or limit the provisions of securities laws or requirements of the stock exchange(s).

Payment of dividend etc.

The listed entity is used to pay dividends or interest or redemption or repayment of debts.  The list entity shall use any electronic mode of payment facility as approved by the Reserve Bank of India.

If it is not possible to use electronic mode of payment, ‘payable-at-par’ warrants or cheques may be issued.  Where the amount payable as dividend exceeds one thousand and five hundred rupees, the ‘payable-at-par’ warrants or cheques shall be sent by speed post.      

Grievance Redressal Mechanism

The listed entity shall have grievance redressal mechanism to redress the grievances of the investors.  The grievances shall be settled within 21 calendar days from the date of receipt of the complaint.

The listed entity shall ensure that it is registered on the SCORES platform or such other electronic platform or system of the Board as shall be mandated from time to time, in order to handle investor complaints electronically in the manner specified by the Board.

The listed entity shall file a quarterly Statement to the stock exchange within 21 days from the end of each quarter.   The said statement shall contain the following-

• the number of investor complaints pending at the beginning of the quarter;
• t hose received during the quarter,
• disposed of during the quarter; and
• those remaining unresolved at the end of the quarter.

The said quarterly statement shall be placed, on quarterly basis, before the board of directors of the listed entity.

The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.

Fees payable to stock exchanges

The listed entity shall pay all such fees or charges, as applicable, to the recognized stock exchange(s), in the manner specified by the Board or the recognized stock exchange(s).