Analysis of Regulation 30 of SEBI (LODR) Regulations, 2015

LODR is one of the most important regulations mandated by the Securities and Exchange Board of India to enable transparency and fair disclosures by all listed entities in India. Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR Regulations’) a listed entity shall disclose to stock exchange(s) all events or information, which are material, as soon as reasonably possible and not later than twenty-four hours from the occurrence of event or information.

Introduction

Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR Regulations’) a listed entity shall disclose to stock exchange(s) all events or information, which are material, as soon as reasonably possible and not later than twenty-four hours from the occurrence of event or information.

Event And Information

Events- The consequence of anything that happens or comes to pass as distinguished from a thing that exists. (As per Black’s Law Dictionary) 

Information- Anything that -happens or comes to pass as distinguished from a thing that exists 

When does an event/information occur? 

As per the Guidance note issued by SEBI- In certain instances, the answer to the above question would depend upon the stage of discussion, negotiation, or approval, and in other instances where there is no such discussion, negotiation, or approval required viz. in case of natural calamities, disruptions, etc, the answer to the above question would depend upon the timing when the listed entity became aware of the event/information. In the former, the events/information can be said to have occurred upon receipt of approval of the Board of Directors e.g. further issue of capital by rights issuance and in certain events/information after receipt of approval of both i.e. Board of Directors and Shareholders. However, considering the price sensitivity involved, for certain events e.g. decision on declaration of dividends, etc., disclosure shall be made on receipt of approval of the event by the Board of Directors, pending Shareholder’s approval. In the latter, the events/information can be said to have occurred when a listed entity becomes aware of the events/information, or as soon as, an officer of the entity has, or ought to have reasonably come into possession of the information in the course of the performance of his duties.

Clauses 

• Every listed entity shall make disclosures of any events or information which, in the opinion of the board of directors of the listed company, is material.
• Events specified in Part A of Schedule III. are deemed to be material events and the listed entity shall make disclosure of such events.
• The listed entity shall make disclosure of events specified in Para B of Part A of Schedule III, based on the application of the guidelines for materiality, as specified in sub-regulation (4).
• The listed entity shall consider the following criteria for the determination of the materiality of events/ information:
  • The omission of an event or information, which is likely to result in discontinuity or alteration of event or information already available publicly; or
  • The omission of an event or information is likely to result in a significant market reaction if the said omission came to light at a later date;
  • In the case where the criteria specified in sub-clauses (a) and (b) are not applicable, an event/information may be treated as being material if, in the opinion of the board of directors of the listed entity, the event/information is considered material.
  • The listed entity shall frame a policy for the determination of materiality, based on criteria specified in this sub-regulation, duly approved by its board of directors, which shall be disclosed on its website.
• The board of directors of the listed entity shall authorize one or more Key Managerial Personnel for the purpose of determining the materiality of an event or information and for the purpose of making disclosures to stock exchange(s) under this regulation and the contact details of such personnel shall be also disclosed to the stock exchange(s) and as well as on the listed entity’s website.
•  The listed entity shall first disclose to stock exchange(s) all events, as specified in Part A of Schedule III, or information as soon as reasonably possible and not later than twenty-four hours from the occurrence of the event or information:
• Provided that in case the disclosure is made after twenty-four hours of the occurrence of the event or information, the listed entity shall, along with such disclosures provide an explanation for the delay:
• Provided further that disclosure with respect to events specified in sub-para 4 of Para A of Part A of Schedule III shall be made within the timelines specified therein thirty minutes of the conclusion of the board meeting.

• The listed entity shall, with respect to disclosures referred to in this regulation, make disclosures updating material developments on a regular basis, till such time the event is resolved/closed, with relevant explanations.
• The listed entity shall disclose on its website all such events or information which has been disclosed to stock exchange(s) under this regulation, and such disclosures shall be hosted on the website of the listed entity for a minimum period of five years and thereafter as per the archival policy of the listed entity, as disclosed on its website.
• The listed entity shall disclose all events or information with respect to subsidiaries that are material for the listed entity.
• The listed entity shall provide a specific and adequate reply to all queries raised by stock exchange(s) with respect to any events or information.
• Provided that the stock exchange(s) shall disseminate information and clarification as soon as reasonably practicable.

• The listed entity may on its own initiative also, confirm or deny any reported event or information to stock exchange(s).
• In the case where an event occurs or information is available with the listed entity, which has not been indicated in Para A or B of Part A of Schedule III, but which may have a material effect on it, the listed entity is required to make adequate disclosures in regard thereof.

Conclusion 

There is no said particular formatted list of disclosures. It’s the responsibility of all the listed entities not to just have the disclosures done but the same to be done on a timely basis to maintain the spirit of the law.