Amendments in the Securities regulations
SEBI Updates October 2023
1. Filing of Related Party Transactions (RPT) disclosure on the NEAPS Portal
On September 29, 2023, NSE vide Circular NSE/CML/2023/68 stated the listed company should make RPT disclosure on the NEAPS Portal in XBRL form only.
This requirement pertains to Regulation 23(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, mandating listed entities to file RPT disclosure every 6 months, aligning with the publication of their standalone and consolidated financial results.
The listed entities are requested to submit RPT disclosure only in XBRL form on the following path: NEAPS > Compliance > Common XBRL Upload > Related Party Transactions
The submission of RPT disclosure in the XBRL form will only be treated as compliance under Regulation 23(9) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and no other form of filing (including PDF form) will be treated as compliance.
The link for the aforesaid Circular is as follows:
https://nsearchives.nseindia.com/web/sites/default/files/inline files/NSE_Circular_29092023.pdf
2.Change in Mode of Payment w.r.t. SEBI Investor Protection and Education Fund Bank A/c.
On September 29, 2023, NSE vide Circular NSE/CML/2023/69 issued a format for Cyber Security Incident Disclosure within the Corporate Governance Report ensuring comprehensive and standardized reporting.
SEBI vide Notification EBI/LAD-NRO/GN/2023/131 dated June 14, 2023, introduced the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2023 which states that listed entities should mandatorily disclose Cyber Security incidents, breaches, data, or document loss within the Corporate Governance Report. Moreover, listed entities are required to submit these details to the stock exchanges every quarter, in adherence to the new regulation effective from July 14, 2023. The abovementioned changes in the XBRL utility will be effective from the quarter ended September 30, 2023 and onwards.
The link for the aforesaid Circular is as follows:
https://nsearchives.nseindia.com/web/sites/default/files/inlinefiles/NSE_Circular_29092023_0.pdf
The link for the BSE Notice is as follows:
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20230929-26
3.Revised Standard Operating Procedure (SOP) on application filed under Regulation 37 and 59A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 w.r.t. Scheme of Arrangements
On September 29, 2023, NSE vide Circular NSE/CML/2023/70, updated the Standard Operating Procedure (SOP) which outlines the process for handling applications filed under Regulation 37 and 59A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, specifically concerning Schemes of Arrangements.
Revised (SOP) to be followed by listed entities:
1. The Scheme of Arrangement seeking the Stock Exchange’s NOC under Regulation 37/59A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR’) shall be submitted to the Exchange along with all the documents as per the Exchange Checklist within 15 working days of board meeting approving the draft scheme of arrangement. In case the application is not submitted within 15 working days, the company shall get fresh approval from its board considering fresh financials, valuation reports, etc.
2. At the time of submission of the application to the Exchange(s) under Regulation 37 / 59A of SEBI LODR, the Audited Financials of the last 3 years (financials not being older than 6 months) of the unlisted company(ies) involved in the Scheme of Arrangement has to be submitted.
3. Audited financials considered for preparation of the Valuation Report, should not be older than 3 months on the date of valuation report. While submitting with Exchange, the detailed working of valuation under different methods shall also be given.
4. The board shall consider the scheme of arrangement within 7 working days of the issuance of the valuation report.
5. For Listed Entity having their specified securities as well as NCDs/NCRPS listed, a single filing
of the draft scheme of arrangement in terms of Regulations 37 and Regulation 59A of SEBI LODR shall be submitted under Regulation 37 wherein additional documents, as required for Debt Listed company shall also be attached.
6. If the documents are incomplete or any material inadequacies/non-compliance with the SEBI Circulars are observed in the documents, by the Exchange, the scheme shall be returned to the Company for filing the scheme after ensuring compliance. In such cases, the processing fee paid by the company will be forfeited by the Exchange/Regulator.
7. If any clarification is required from the company side, a period of 7 working days from the date of raising the query by the Exchange will be allowed to the Company for submission of rectification. On expiry of aforesaid timelines if the company is unable to make submissions, then any fees paid by the Company for processing of the application shall be forfeited by the Exchange/Regulator and the scheme documents shall be returned to the Company.
8. Specifically for Debt Listed Entities, it is mandatory for the Listed Entity to promptly respond to any queries raised by the Stock Exchange. This timely response is crucial to ensure compliance with the stipulated requirement that dictates the “maximum number of days for providing the ‘No-Objection’ Letter to SEBI shall not exceed 30 days from the date of receipt of the draft scheme of arrangement.”
9. Any refiling because of the previous unsatisfactory filing shall be made along with a fresh set of documents all together including a valuation report, fairness opinion, recommendation of the audit committee, etc. The Company shall be required to pay fresh fees to the Exchange/Regulator.
The link for the aforesaid Circular is as follows:
NSE link:
https://nsearchives.nseindia.com/web/sites/default/files/inline-files/Revised%20SOP_29.09-2023_equity_0.pdf
BSE link:
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20230929-30
4.Centralized mechanism for reporting the demise of an investor through KRAs
On October 03, 2023, SEBI vide Circular SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/0000000163, introduced a centralized mechanism for reporting and verification in case of the demise of an investor and thereby smoothen the process of transmission in the securities market. This Circular shall come into effect from January 01, 2023.
This circular spell out the operational norms including the obligations of regulated entities, including registered intermediaries that have an interface with ‘investors’ / ‘account holders’ who are natural persons.
Listed companies wanting to provide beneficial access to the centralized mechanism to their investors holding securities in physical form are eligible to establish connectivity with KYC Registration Agencies (KRAs) through their RTAs.
The obligation of the intermediary:
- Verification of the death certificate
- Updation of records in the KRA system by the Intermediary
The Circular also mentions obligations of KRAs, process of intimation on Transmission of assets of the deceased investor, how to make transaction request in accounts / folios flagged off as “On Hold”.
The link for the aforesaid Circular is as follows:
The link for the NSE Circular is as follows:
https://nsearchives.nseindia.com/web/sites/default/files/inlinefiles/NSE_Circular_04102023_4.pdf
5.Working Groups to recommend on simplification, ease of compliance, and reduction in the the cost of compliance; suggestions invited
On October 04, 2023, pursuant to the Budget Announcement, SEBI constituted Working Groups to recommend simplification of various SEBI Regulations. The Working Groups will also look into the compliance requirements to enhance ease of compliance and reduce compliance. At present, 16 Working Groups, under the aegis of its standing Advisory Committees, are reviewing compliance requirements under various SEBI Regulations applicable for various regulated entities, such as equity and debt listed companies, Mutual Funds, Stock Brokers, Alternative Investment Funds, REITs/InvITs, Portfolio Managers, Custodians, Investment Advisers, Research Analysts, etc. Suggestions pertaining to specific regulations may be sent latest by November 06, 2023, in the prescribed format.
The link for the aforesaid Press Release is as follows:
https://www.sebi.gov.in/media-and-notifications/press-releases/oct-2023/working-groups-to-recommend-on-simplification-ease-of-compliance-and-reduction-in-cost-of-compliance-suggestions-invited_77632.html
6.Limited relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
On October 06, 2023, SEBI vide Circular SEBI/HO/DDHS/P/CIR/ 2023/0164 granted a limited relaxation on Regulation 58(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 stating that the listed entity shall send a hard copy of the statement containing the salient features of all the documents, as specified in Section 136 of Companies Act, 2013 and rules made thereunder to those holders of non-convertible securities who have not so registered. SEBI has relaxed the requirements of regulation 58 (1)(b) of the SEBI Listing Regulations up to September 30, 2024.
The link for the aforesaid circular is as follows:
https://www.sebi.gov.in/legal/circulars/oct-2023/limited-relaxation-from-compliance-with-certain-provisions-of-the-sebi-listing-obligations-and-disclosure-requirements-regulations-2015_77763.html
The link for the BSE Notice is as follows:
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20231010-8
7. Master Circular for Depositories
On October 06, 2023, SEBI vide Circular SEBI/HO/DDHS/P/CIR/ 2023/0164 granted a limited relaxation on Regulation 58(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 stating that the listed entity shall send a hard copy of the statement containing the salient features of all the documents, as specified in Section 136 of Companies Act, 2013 and rules made thereunder to those holders of non-convertible securities who have not so registered. SEBI has relaxed the requirements of regulation 58 (1)(b) of the SEBI Listing Regulations up to September 30, 2024.
The link for the aforesaid circular is as follows:
https://www.sebi.gov.in/legal/circulars/oct-2023/limited-relaxation-from-compliance-with-certain-provisions-of-the-sebi-listing-obligations-and-disclosure-requirements-regulations-2015_77763.html
The link for the BSE Notice is as follows:
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20231010-8
8.Relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
On October 07, 2023, SEBI vide Circular SEBI/HO/CFD/CFD-PoD-2/P/CIR/2023/167, extended the relaxation on the applicability of regulation 36(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations, 2015 for Annual General Meetings (AGMs) and regulation 44(4) of the LODR Regulations for general meetings (in electronic mode) held till September 30, 2024. Earlier, SEBI Master Circular dated July 11, 2023 on compliance with the provisions of the LODR Regulations, 2015 by listed entities inter-alia relaxed the applicability of regulations 36(1)(b) and 44(4) of the LODR Regulations till September 30, 2023 (section VI-J of the Master Circular).
The link for the aforesaid circular is as follows:
https://www.sebi.gov.in/legal/circulars/oct-2023/relaxation-from-compliance-with-certain-provisions-of-the-sebi-listing-obligations-and-disclosure-requirements-regulations-2015-reg-_77781.html
The link for the BSE Notice is as follow:
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20231009-9
The link for the NSE Circular is as follows:
https://nsearchives.nseindia.com/web/sites/default/files/inlinefiles/NSE_Circular_09102023.pdf
9.Extension in timeline for compliance with qualification and experience requirements under Regulation 7(1) of SEBI (Investment Advisers) Regulations, 2013
On October 10, 2023, SEBI vide Circular SEBI/HO/MIRSD/MIRSD-PoD-2/P/CIR/2023/168 extended the timeline for compliance with qualification and experience requirements under Regulation 7(1) of SEBI (Investment Advisers) Regulations, 2013
Regulation 7 of SEBI (Investment Advisers) Regulations, 2013, as amended vide SEBI (Investment Advisers) (Amendment) Regulations, 2020, specifies the qualification and experience requirements for investment advisers and provides that an individual investment adviser or principal officer of a non-individual investment adviser registered under these regulations and persons associated with investment advice shall comply with the enhanced qualification and experience requirements within a period of 3 years, i.e., by September 30, 2023. Accordingly, it is now specified that the timeline to comply with the enhanced qualification and experience requirements under regulation 7(1) is extended to September 30, 2025.
The link of the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/oct-2023/extension-in-timeline-for-compliance-with-qualification-and-experience-requirements-under-regulation-7-1-of-sebi-investment-advisers-regulations-2013_77901.html
10.Master Circular on Know Your Client (KYC) norms for the securities market
On October 12, 2023, SEBI vide Circular SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 issued Master Circular on Know Your Client (KYC) norms to be followed by intermediaries in the securities market to enable the users to have access to all the applicable circulars/directions at one place.
This Master Circular is a compilation of the circulars/directions issued by SEBI up to September 30, 2023, on Know Your Client (KYC) norms for the securities market includes certain modifications to align such circulars/directions with the provisions of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 and the Securities and Exchange Board of India [KYC (Know Your Client) Registration Agency] Regulations, 2011. The provisions of this Master Circular shall come into force from the date of its issue. Any modifications/ updation in existing KYC records, shall be effected in line with the provisions of this Circular by December 31, 2023.
The link of the aforesaid Circular is as follows:
11.Mandatory Filing of Voting Results in XBRL Mode.
On October 17, 2023, NSE vide Circular NSE/CML/2023/74 mandated the submission of voting results in XBRL format ensuring compliance with standardized reporting measures and facilitating transparent and efficient dissemination of voting outcomes.
This is in reference to Regulation 44(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which requires the listed entities to submit the Voting Results within 2 working days of conclusion of its General Meeting in the format specified by SEBI.
Currently, the listed entities are filing the Voting Results of the General Meeting both in the PDF and XBRL format. To facilitate ease of compliance for the listed entities, it has been decided to discontinue the PDF reporting format of the Voting Results submission and continue the filings in the XBRL format only.
The prescribed XBRL format for filing the Voting Results is available at the below mentioned path: NEAPS> Compliance > Event Based Compliances > Voting Result
The listed entities are requested to submit voting result disclosure only in XBRL form on the following path: NEAPS > Compliance > Common XBRL Upload > Voting Results
The link for the aforesaid Circular is as follows:
https://nsearchives.nseindia.com/web/sites/default/files/inline-files/MANDATORY%20FILING%20OF%20VOTING%20RESULTS%20IN%20XBRL%20MODE.pdf
12.Ease of doing business and development of corporate bond markets – revision in the framework for fund raising by issuance of debt securities by large corporates (LCs)
On October 19,2023 SEBI vide circular SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 revised framework for fund raising by issuance of debt securities by large corporates (LCs).
Applicability of the framework:
This framework is applicable with effect from April 01, 2024 for LCs following April – March as their financial year. This framework is applicable with effect from January 01, 2024, for LCs which follow January – December as their financial year.
The framework shall be applicable for all listed entities (except for Scheduled Commercial Banks), which as on last day of the financial year:
- Have their specified securities, debt securities, or non-convertible redeemable preference shares listed on recognized stock exchanges under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
- Maintain outstanding long-term borrowings of Rs. 1,000 crore or more. Outstanding long-term borrowings exclude external commercial borrowings, inter-corporate borrowings involving holding company and subsidiaries, government grants, interest capitalization, and borrowings related to mergers, acquisitions, and takeovers.
- Hold a credit rating of “AA,” “AA+,” or “AAA,” specifically for unsupported bank borrowings or plain vanilla bonds, without any structural support.
LCs are required to comply with the following provisions:
- Raising Debt Securities: LCs are obligated to raise at least 25% of their “qualified borrowings” by issuing debt securities in the following financial years.
- Contiguous Three-Year Block: From FY 2025, LCs must fulfill the mandatory qualified borrowing rule continuously for three years, starting from March 31 (FY “T-1”) for April-March financial years, and December 31 (FY “T-1”) for January-December financial years.
- Incentives and Disincentives:Incentives and disincentives are applied based on an LC’s borrowing performance
- Surplus in Required Borrowings: If an LC surpasses the 25% borrowing condition over the three-year block, it qualifies for benefits including lower annual listing fees and reduced contribution to the Core Settlement Guarantee Fund (SGF) of Limited Purpose Clearing Corporations (LPCC).
- Shortfall in Required Borrowings: If an LC fails to meet the 25% borrowing requirement, it faces a dis-incentive in the form of an additional contribution to the core SGF.
- Responsibilities of Stock Exchanges and LPCC: Stock Exchanges will play a crucial role in identifying LCs and calculating incentives or dis-incentives. They will notify LCs and facilitate the implementation of these provisions. LPCC will need to make necessary changes and ensure LCs comply with the requirements related to contribution to the core SGF.
- Requirements for LCs Identified Based on Erstwhile Criteria: LCs that were identified based on previous criteria and meet the new criteria have the flexibility to comply with the 25% borrowing requirement over three years, starting from FY 2022.
The link for the aforesaid circular is as follows: –
https://www.sebi.gov.in/legal/circulars/oct-2023/ease-of-doing-business-and-development-of-corporate-bond-markets-revision-in-the-framework-for-fund-raising-by-issuance-of-debt-securities-by-large-corporates-lcs-_78237.html
The link for the NSE circular is as follows: –
https://nsearchives.nseindia.com/web/sites/default/files/inlinefiles/NSE_Circular_20102023.pdf
The link for the aforesaid BSE Notice is as follows: –https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20231025-4
13.Guidelines for Business Continuity Plan (BCP) and Disaster Recovery (DR) of Qualified RTAs (QRTAs)
Qualified RTAs (QRTAs) (i.e. RTAs having more than 2 Crore folios) are systemically important institutions as they, inter-alia, provide infrastructure necessary for the smooth and uninterrupted functioning of the securities market. As part of the operational risk management, these QRTAs need to have high level of resiliency to provide essential facilities and perform systemically critical functions uninterruptedly in the securities market.
Accordingly, SEBI on consultation with its Technical Advisory Committee (TAC), on October 20, 2023, vide Circular No. SEBI/HO/IMD/IMD-TPD-1/P/CIR/2023/173 decided to issue new guidelines to for strengthening overall resiliency, the procedures at / governance of QRTAs for handling disruption, augmentation of systems and practices to achieve better Recovery Time Objective (“RTO”) and Recovery Point Objective (“RPO”), and to improve overall preparedness by conducting periodic announced / unannounced drills.
In view of the above QRTAs are required to comply with the framework for BCP and DR as prescribed in the Circular which inter-alia provides for the following:
Expertise Equality: The staff at DRS/Near Site (NS) should possess the same expertise as those at the Primary Data Center (PDC) to ensure they can operate independently in case of a disaster.
Incident and Response Team: QRTAs must establish an Incident and Response Team (IRT) or Crisis Management Team (CMT), headed by the Managing Director (MD) or Chief Technology Officer (CTO). The team will be responsible for declaring a disaster, implementing the BCP, and shifting operations from PDC to DRS as needed.
Policy Documentation: QRTAs are required to document roles, responsibilities, and actions to be taken by employees, IRT/CMT, and support/outsourced staff in the event of a disaster.
Configuration of DRS/NS with PDC
- In addition to maintaining a Disaster Recovery Site (DRS), QRTAs should have a Near Site (NS) to ensure zero data loss. The DRS should ideally be located in different seismic zones, and if this is not feasible, a minimum distance of 500 kilometers between PDC and DRS should be ensured.
- Hardware, software, application environments, network and security devices in the DRS should correspond one-to-one with those in the PDC. Any system updates or changes should not be required for the switch from PDC to DRS.
- QRTAs are required to ensure a Recovery Time Objective (RTO) of 45 minutes, meaning they must restore critical systems’ operations from DRS within 45 minutes of declaring a disaster. This should be implemented within 90 days from the issuance of the circular.
- The “Critical Systems” for QRTAs may include various transaction processes, connectivity with Asset Management Companies (AMCs), NAV calculation-related processes, and others. It is imperative that the RPO (Recovery Point Objective), the maximum tolerable data loss period, is set at 15 minutes.
DR Drills/Testing
QRTAs are expected to conduct regular training programs for employees and outsourced staff to enhance preparedness. DR drills should be held quarterly and closely mimic real trading scenarios. Additionally, unannounced live operations from the DRS should be conducted at least once every three months on normal working days. The results and observations of these drills should be documented and reviewed.
BCP-DR Policy Document
QRTAs are required to have a comprehensive BCP-DR policy document that outlines various aspects of disaster recovery. This document should be approved by the Governing Board, periodically reviewed, and communicated to SEBI.
The BCP-DR policy should also address scenarios of intraday shifting from PDC to DRS, highlighting preparedness in meeting RTO and RPO requirements.
The link of the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/oct-2023/guidelines-for-business-continuity-plan-bcp-and-disaster-recovery-dr-of-qualified-rtas-qrtas-_78272.html
14.Annual Listing Fees – Privately Placed Debt Instruments
On October 26, 2023 BSE issued Notice 20231026-31 which contains revised Annual Listing Fees – Privately Placed Debt Instruments (PPDIs). This revision in Annual Listing Fees shall be effective from November 1, 2023. The revised fees shall be applicable on the incremental debt securities to be listed on and after November 01, 2023 and to the existing Capital.
The revised schedule of Annual Listing Fees for PPDIs is given below: –
| Particulars | Amount in Rupees* |
| Initial Listing Fees | 20,000 |
Processing fees (Applicable only to Private Companies) | 4,500 per ISIN (If the parent company is a public limited company or a listed entity Rs. 2,500/- per ISIN) |
Annual Listing Fees Chargeable – Issue Size Per ISIN
| Up to Rs.100 crore | Rs. 70,000 |
| Above Rs.100 crore and up to Rs.200 crores | Rs. 90,000 |
| Above Rs.200 crores and up to Rs.300 crores | Rs. 120,000 |
| Above Rs.300 crores and up to Rs.400 crores | Rs. 150,000 |
| Above Rs.400 crores and up to Rs.500 crores | Rs. 250,000 |
| Above Rs. 500 Crores | Rs. 250,000 plus an additional listing fee of Rs. 1,000/- for every increase of Rs. 1 crore or part thereof above the issue size of Rs. 500 crores subject to a maximum of Rs. 10 lakhs |
| Annual Listing Fee payable by an Issuer shall be limited to a maximum of Rs. 10 lakhs. | |
| * Plus, Applicable Taxes | |
The link for the aforesaid BSE Notice is as follows:
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20231026-31
15.Revision in manner of achieving minimum public unitholding requirement – Infrastructure Investment Trusts (InvITs)
SEBI vide circular dated June 27, 2023 prescribed methods to achieve minimum public unitholding requirements for InvITs. Subsequently, SEBI on July 06, 2023 issued Master Circular for InvITs in which the circular dated June 27, 2023 was consolidated as Chapter 21.
On October 31, 2023 SEBI vide Circular No. SEBI/HO/DDHS-PoD-2/P/CIR/2023/174 (“the Circular”) provided for an additional method (given below) to be included in para 21.2 of Chapter 21 of the above-mentioned Master Circular to achieve minimum public unitholding requirements by privately placed InvITs.
| S. No. | Method | Specific Conditions, if any, applicable |
| 10. | Issuance of units through preferential allotment | Only units issued to the public shall be considered for compliance with minimum unitholding requirement |
Further, vide the Circular SEBI has also substituted the S. No. 7 under para 21.2 of Chapter 21 of the said Master Circular.
The circular shall come into force with effect from October 31, 2023.
The link of the aforesaid Circular is as follows:
https://www.sebi.gov.in/legal/circulars/oct-2023/revision-in-manner-of-achieving-minimum-public-unitholding-requirement-infrastructure-investment-trusts-invits-_78561.html
16. Informal Guidance with respect of the disclosure of material events/ information
Query 1: With reference to Point No. 8 of Para B of Part A of Schedule III of the LODR Regulations, whether details of arbitral proceedings of pending arbitration matters or arbitral awards can be disclosed to SEBI as it may contravene Section 42A of Arbitration and Conciliation Act, 1996?
Response: The disclosure of the details of arbitral proceedings or arbitral awards can be made to the extent it is legally permissible under the Arbitration and Conciliation Act, 1996 which would inter-alia include disclosure of fact of initiation of arbitration proceedings, amount of claim involved in such proceedings, fact of passing of arbitral award and its effect on the listed entity, fact of termination of the arbitration proceedings, court orders in relation to the arbitration proceedings etc.
Query 2: With reference to the above provision, in the SEBI Circular, what does ‘cumulative basis’ mean. Whether it includes:
In case there are multiple litigations/ cases with the same party, whether the claims by/ against the said party in all such multiple litigations/ cases are to be taken together for arriving at the cumulative figure (deciding materiality)?
In any single litigation/ case, whether claim by the listed entity and counter-claim against the listed entity needs to be added together, for the purpose of arriving at the cumulative figure (deciding materiality)?
Response: It is clarified that the cumulative figure is to be arrived at by taking together the claims by/ against a party in all ongoing litigations or disputes with the same party. However, claim by the listed entity and counter-claim against the listed entity in any single litigation/ case may not be added together or set-off for the purpose of arriving at the aforesaid cumulative figure.
The link for the aforesaid Informal Guidance is as follows:
https://www.sebi.gov.in/sebi_data/commondocs/oct-2023/Gail_India_Ltd_CFD_AL_p.pdf