COMPLIANCE WITH LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS UNDER THE SEBI MASTER CIRCULAR

The Securities and Exchange Board of India (“SEBI”) in the exercise of its powers conferred under Section 11(1) and 11 A of the SEBI Act, 1992 and Regulation 101 of the Listing Obligations and Disclosure Requirements Regulations, 2015 (“LODR Regulations”) has issued a Master Circular vide Circular No. SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated July 11, 2023 for compliance with the provisions of the SEBI LODR Regulations, 2015 by listed entities (“Master Circular”).¹ The Master Circular consolidates the provisions of all applicable circulars issued by SEBI till June 30, 2023, and enables the users to have easier access to the framework for various obligations under the LODR Regulations.

The following are the key highlights of the Master Circular:

1. Uniform Listing Agreement- Different Regulations on initial issuance of capital such as the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 specifies the requirement of executing a listing agreement with the Stock Exchange. The Master Circular provides for a simplified listing agreement which is uniform across all types of securities/listed entities.²


2. Periodic Disclosures- In consonance with the mandate for disclosure and maintenance of shareholding pattern in dematerialized format³ , the Master Circular provides for the following:
   
   
   1. Manner of representation of holding of specified securities: The holding of specified securities is categorized into-(i)Promoter and Promoter Group, (ii) Public and (iii) Non-Promoter Non-Public. Shareholding details of promoters, promoter groups, public shareholders, and non-public non-promoter shareholders must be accompanied with their Permanent Account Number (“PAN”). In terms of disclosure of Public Shareholding, the names of shareholders holding 1% or more shares and persons acting in concert should be disclosed separately.
   
   
   2. Holding of specified securities in dematerialized form:Regulation 31(2) of the LODR Regulations requires listed entities to ensure that all shareholdings of the promoter and promoter group are in dematerialized form. However, there are exemptions such as- shares sold physically but not transferred, shareholdings involved in pending legal matters, and shares that cannot be converted due to promoter’s death. To avail these exemptions, the listed entity shall approach to the Stock Exchanges along with document evidence. Furthermore, at least 50% of non-promoter holdings shall be in dematerialized form, excluding government holdings in non-promoter category.
   
   
   3. Display of holding of specified securities on Stock Exchange(s) Website:Listed entities must inform the Stock Exchanges about the absence of specific instruments, encumbered/pledged shares, and locked-in shares for display on the website.


3. Compliance with Corporate Governance Provisions- The listed entities in terms of Regulation 27(2) of the LODR Regulations is required to submit quarterly compliance report on Corporate Governance to the recognized Stock Exchanges. In case of non-applicability of Corporate Governance provisions, a declaration to that effect needs to be submitted.


4. Disclosure norms for Indian Depository Receipts (IDR)- The listed entities in accordance with Regulation 69(1) of the LODR Regulations shall file with the Stock Exchange the IDR holding pattern on a quarterly basis within 15 days from the end of the quarter.Furthermore, Regulation 72(1) mandates compliance with corporate governance provisions in the entity’s home country and other jurisdictions where its equity shares are listed. Such entity shall also submit a comparative analysis of the corporate governance provisions that are applicable in its home countryand other jurisdictions where its equity shares are listed, along with the compliance of the same. Information furnished by the listed entities in terms of Regulation 69(1) and Regulation 72(2) shall also be disclosed on the website of such listed entities.


5. Financial Disclosures- Regulation 33 of the LODR Regulations outlines the requirements for submitting financial results. The same shall be applicable to all listed banking and insurance companies.
   
   
   1. Formats for submission of financial result:Regulation 33(4) of LODR Regulations requires unaudited/audited quarterly financial results to adhere to the formats mentioned under Schedule III of the Companies Act, 2013 and relevant accounting standards.⁴
   
   
   2. Disclosure of reasons for delay in submission of financial results: Regulation 33(3) of the LODR Regulations requires listed entities to submit their quarterly and annual financial results within 45 days from the end of the quarter, and within 60 days from the end of the financial year, respectively. If the entity fails to submit its financial results, it shall provide detailed reasons for the delay to the stock exchanges within one working day of the due date for submission.
   
   
   3. Procedure and formats for limited review / audit report of the listed entity: According to Regulation 33(8), the statutory auditor of a listed company must conduct a limited review of the audit for all entities whose accounts will be consolidated with the listed company. This review should be done in accordance with the relevant accounting standard (AS 21 / Ind-AS 110) and guidelines provided by the Board.
   
   
   4. Disclosure of the Impact of Audit Qualifications by listed entities: According to Regulations 33(3)(d) and Schedule IV, an audit report with a modified opinion must include a Statement on Impact of Audit Qualifications. In the case of unmodified opinion, the listed entity needs to provide a declaration to that effect while submitting the audited financial results.
   
   


6. Disclosure in relation to Related Party Transactions (“RPT”)-Regulation 23(9) of the LODR Regulationsmandates listed entities to disclose RPTs on a half-yearly basis. Listed entities are required to provide detailed information to the audit committee for the proposed RPTs. The audit committee would review long-term or recurring RPTs annually and the material RPTs in terms of Regulation 23(1) would further require the shareholder’s approval.


7. Statement of Deviation or Variation-According to Regulation 32(1), 32(2) and 32(3) of the LODR Regulations, listed entities must regularly submit a statement of deviation or variation to the stock exchange, detailing any discrepancies in the use of funds raised through public issue, rights issue, or preferential issue. This report must be submitted until the funds are fully utilized or the intended purpose is achieved. Listed entities with no discrepancies must submit a NIL report.


8. Annual Disclosures- Regulation 24A(1) of the LODR Regulations mandates every listed entities and their material unlisted subsidiaries in India to conduct an annual secretarial audit. Regulation 24A(2) further requires submission of a secretarial compliance report to stock exchanges within 60 days of each financial yearend.These documents and information are to be provided to the Practising Company Secretaries (“PCS”) for certification purposes. The PCS shall be guided by the instructions received from the Board and guidance issued by ICSI, ensuring compliance with regulations and abiding by theMaster Circular’s intent.


9. Business Responsibility and Sustainability Report (BRSR)- Starting from FY 2022-23, the top 1000 (one thousand) listed companies by market cap must submit aBRSR, as specified by SEBI. Other listed entities can choose to submit the report voluntarily. The BRSRrequire listed entities to disclose their performance based on the National Guidelines on Responsible Business Conduct (“NGRBC”). The report includes essential and voluntary indicators, enabling standardized ESG disclosures for better investor decisions and stakeholder engagement.
   On July 12, 2023, SEBI issued a circular on BRSR Core- Framework for assurance and ESG disclosures for value chainvide circular no. SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122⁵ . Following are the key elements in the circular:
   1. ESG Disclosures for value chain
      1. From FY 2024-25, the top 250 listed entities based on market capitalization must disclose ESG information for their value chain, on a comply-or-explain basis. Limited assurance will be applicable from FY 2025-26.
      
      
      2. Listed companies are required to disclose their value chain information in their Annual Report according to the BRSR Core and the same value chain shall include the top upstream and downstream partners cumulatively comprising 75% (seventy-five percent) of its purchases/sales (by value) respectively. KPIs related to the value chain should be reported based on the company's business with each partner, either segregated or aggregate basis. The scope of assumptions and reporting, if any, shall be clearly disclosed.
   2. Compliance with respect to the Assurance Provider
      The Board of the listed entity must ensure that:
      1. the assurance provider for the BRSR Core has the required expertise for conducting reasonable assurance;
      2. there is no conflict of interest with the assurance provider, such as selling products or providing non-audit/consulting services to the listed entity or its group entities; and
      3. stock exchanges should inform all listed entities about the provisions in this circular and make them available on their websites.


10. Disclosure of Material Events/Information- Regulation 30 of the LODR Regulations requires disclosure of material events by every listed entity. It divides the events into two broad categories:⁶
    
    1. Events that that have to be necessarily disclosed without applying any test of materiality such as,acquisition, scheme of arrangement, sale or disposal of any units or any other restructuring of the listed entities and;⁷
    2. Events that should be disclosed if it crosses the materiality threshold such as, commencement of any commercial production, arrangement for strategic tie-ups, adoption of new line of business, fraud by employees, disruption of operation, etc.⁸
    Regulation 30(6) of the LODR Regulations specifies that the listed entity shall disclose all material events to the stock exchange within a period of:
    1. thirty minutes from the closure of Board Meeting where the decision pertaining to the information has been taken;
    2. twelve hours from occurrence of the event (if the information emanates from the listed entity), otherwise within a period of twenty-four hours.
    The occurrence of the material event/information would depend upon the stage of discussion, negotiation, approval, or any natural calamities.Furthermore, the criteria for determining the materiality of events would be any omission of an event as provided under Regulation 30(4) of the LODR Regulations.


11. Disclosure of Defaults on Payment- To ensure that the investors are informed about defaults on loans from banks/financial institutions or unlisted debt securities, the following requirements apply:
    1. Applicability:These provisions apply to all listed entities with specified listed securities(equity and convertible securities). The disclosures must be made to the stock exchanges when the entity defaults on interest or instalment payments for loans, including cash credit, from banks/financial institutions and unlisted debt securities. For cash credit, an entity is in ‘default’ if the outstanding balance exceeds the sanctioned limit or drawing power, whichever is lower, for over 30 days.
    2. Timing of Disclosure:Listed entities must promptly disclose defaults on loans, including cash credit, from banks/financial institutions lasting more than 30 days within 24 hours after the 30th day of default. For unlisted debt securities such as Non-Convertible Debentures (“NCDs”) and Non-Convertible Redeemable Preference Shares(“NCRPS”), the disclosure should be made within 24 hours from the occurrence of the default, following existing requirements.
    3. Disclosure Formats:Listed entities are required to disclose certain information if, on the last day of any quarter, there is a default on loans (including cash credit) from banks/financial institutions lasting over 30 days, or outstanding debt securities under default. This includes the amount of default and the total outstanding amount. Similar rules are applicable to unlisted debt securities such as NCDs and NCRPS.These disclosures must be made within 7 days from the end of each quarter.


12. Disclosure of divergence in asset classification and provisioning by banks- Regulation 30 of LODR requires listed entities to promptly disclose material events to stock exchanges within 24 hours from occurrence. RBI vide notification dated April 1,2019, mandated banks to disclose divergence in asset classification and provisioning in the Annual Financial Statements. Thus, SEBI, in discussion with RBI, vide circular dated October 31, 2019, directed listed banks to disclose divergence in asset classification and provisioning within 24 hours of receiving the Reserve Bank’s Final Risk Assessment Report (“RAR”), instead of waiting for the annual financial statements. Such disclosure is required under two conditions:
    1. when additional provisioning for Non-Performing Assets (“NPAs”) assessed by RBI exceeds 5% of reported profit before provisions, and;
    2. when additional gross NPAs identified by RBI exceed 5% of reported incremental gross NPAs.


13. Resignation of Statutory Auditors- As per the LODR Regulations, the Audit Committee of a listed entity has to make recommendations for appointment, remuneration, and terms of appointment of auditors⁹. If the auditor resigns, detailed reasons must be disclosed within 24 hours. Regulation 36(5) mandates disclosures in the notice to shareholders regarding the appointment/re-appointment of statutory auditors for the Annual General Meeting (“AGM”).With regard to limited review/audit, the following conditions are required to be complied:
    1. Compliance while appointing/re-appointing an auditor: If an auditor resigns within 45 days after the end of a quarter in a financial year, they must issue a limited review/audit report for that quarter before resigning. If the auditor resignsafter 45 days, the auditor must issue report for both that quarter and the next quarter. However, if the auditor has already signed the limited review/audit report for the first three quarters of the financial year, they must audit report for the last quarter as well as for the entire financial year before resigning.
    2. Reporting of concerns with respect to the listed entity/its material subsidiary to the Audit Committee: Concerns about the listed entity/material subsidiary’s management shall be reported to the Audit Committee immediately, without waiting for quarterly meetings.In case, the auditor plans to resign, they must inform the audit committee. Further, in cases where resignation is due to non-receipt of information, the auditor should communicate the details of the information sought. Upon receiving such information, the Audit Committee or board of directors should deliberate and convey their views to both the management and the auditor.
    3. Disclaimer in case of non-receipt of information: In cases where a listed entity fails to provide necessary information to the auditor, the auditor must include an appropriate disclaimer in the audit report according to the auditing standards specified by ICAI/NFRA.The listed company must include the specified conditions in the appointment terms of the statutory auditor at the time of appointment/re-appointment. If the auditor has already been appointed, the terms should be adjusted accordingly.


14. Obligations of the listed entity and its material subsidiary: During the period between the auditor’s resignation proposal and the submission of the audit or limited review report, the listed entity and its subsidiaries must provide all necessary documents and information for the audit. The entity must disclose the Audit Committee’s views to the stock exchanges within 24 hours of the committee meeting.If an entity is not required to have an Audit Committee, the board of directors must ensure compliance with the mentioned provisions. These provisions would however not apply to an Auditor disqualified under Section 141 of the Companies Act, 2013.


15. Manner of achieving Minimum Public Shareholding-Regulation 38 of the LODR Regulations requires every listed entity to comply with Minimum Public Shareholding (“MPS”) requirements as specified in Rule 19(2)(b) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957 (“SCRR”).The methods that shall be adopted to achieve the compliance are as follows:
    

    Sl. No	Methods	Specific Condition
    1.	Rights issue to public shareholders	Promoter(s) / promoter group shareholders shall forgo their entitlement to equity shares that may arise from such issue.
    2.	Bonus Issue to public shareholders	Promoter(s) / promoter group shareholders shall forgo their entitlement to equity shares that may arise from such issue.
    3.	Sale of shares held by promoter(s) / promoter group in the open market in any one of the following ways, subject to compliance with the conditions specified: Promoter(s) / Promoter group can sell up to 2% of the total paid-up equity share capital of the listed entity, subject to five times’ average monthly trading volume of the shares of the listed entity, every financial year till the due date for MPS compliance as per the SCRR (or) Promoter(s) / Promoter group can sell upto a maximum of 5% of the paid-up capital of the listed entity during a financial year subject to the condition that the public holding in the listed entity shall become 25% after completion of such sale. The sale can be a single tranche or in multiple tranches not exceeding a period of 12 months and the amount of shares to be sold shall not exceed the trading volume of the shares of the listed entity during the preceding 12 months from the date of announcement.	Promoter(s) / Promoter group can use either the mechanism specified at Sl. No. 7(i) or 7(ii) to comply with MPS requirements, but not both. The listed entity shall, at least one trading day prior to every such proposed sale, announce the following details to the stock exchange(s) where its shares are listed: the intention of the promoter(s) / promoter group to sell and the purpose of sale; the details of promoter(s)/promoter group, who propose to divest their shareholding; total number of shares and percentage of shareholding in the listed entity that is proposed to be divested; and d) the period within which the entire divestment process will be completed. The listed company must provide an undertaking to the stock exchange(s) that individuals from the promoter and promoter group will not buy shares in the open market during the sale by the promoters/promoter group. The listed entity, its promoter(s), and promoter group must comply with relevant legal provisions, including the SEBI (Prohibition of Insider Trading) Regulations, 2015, and the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
    4.	Increase in public holding pursuant to exercise of options and allotment of shares under an employee stock option scheme, subject to a maximum of 2% of the paid-up equity share capital of the listed entity.	The ESOS scheme shall be in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the promoter(s) / promoter group shall not be allotted any shares.
    5.	Transfer of shares held by promoter(s) / promoter group to an Exchange Traded Fund (ETF) managed by a SEBI-registered mutual fund, subject to a maximum of 5% of the paid-up equity share capital of the listed entity.	The listed entity shall, at least one trading day prior to such proposed transfer, announce the following details to the stock exchange(s) where its shares are listed: the intention of the promoter(s) /promoter group to transfer shares and the purpose of such transfer; the details of promoter(s)/promoter group who propose to transfer their shares in the listed entity; total number of shares and percentage of shareholding proposed to be transferred; and Details of the ETF to which shares are proposed to be transferred by the promoter / promoter group. The listed entity shall also give an undertaking to the recognized stock exchange(s) obtained from the persons belonging to the promoter and promoter group that they shall not subscribe to the units of such ETF to which shares have been transferred by promoter(s) / promoter group entities for the purpose of MPS compliance.
    6.	Any other method as may be approved by the Board on a case to case basis.	The listed entity needs to submit an application to the Board with relevant details for obtaining prior permission. The Board would endeavor to communicate its decision within 30 days of receiving the proposal or requested additional information from the entity.



16. Submission of voting results- As per Regulation 44(3) of the LODR Regulations, the listed entities must provide details of voting results within two working days after its General Meeting.


17. E-Voting Facility-As per Regulation 44(1) of the LODR Regulations, the listed entities are required to provide remote e-voting facility to shareholders for all shareholders’ resolutions. To enhance the voting process, demat account holders will be allowed to use a single login credential through their demat accounts or websites of Depositories/Depository Participants. Shareholders can register directly with Depositories, access e-voting pages through Depository Participants, or use their DematAccounts to access ESP portals without further authentication, facilitating seamless participation in e-voting.


18. Guidance Note on Board Evaluation- Annexure 23 of the Master Circular provides a note to guide the listed entities in different aspects of Board evaluation such as the process of evaluation, frequency of evaluation, subject of evaluation, etc. The purpose of this Note is essentially to educate the Board and improve the overall performance.


19. Disclosures regarding commodity risks-The LODR Regulations require listed entities to disclose commodity price risk and hedging activities in the Corporate Governance Report of their Annual Report using the specified format¹⁰. Annexure 24 of the Master Circular specifies the format for such disclosure.


20. Listing of subsequent issuances of non-convertible debt securities: On September 19, 2023, in the exercise of the powers conferred by section 11, sub-section (2) of section 11A and section 30 of SEBI Act read with section 31 of the Securities Contracts (Regulation) Act, 1956, the SEBI has amended the LODR Regulation and inserted Regulation 62A¹¹ , that is as follows:
    1. listed entity whose non-convertible debt securities are listed shall list all non-convertible debt securities, proposed to be issued on or after January 1, 2024, on the stock exchange(s). Before this the listed entity shall list all outstanding unlisted non-convertible debt securities previously issued on or after January 1, 2024, on the stock exchange(s) within 3 (three) months from the date of the listing of the non-convertible debt securities proposed to be listed.
    2. listed entity whose subsequent issues of unlisted non-convertible debt securities made on or before December 31, 2023, are outstanding on the said date, may list such securities, on the stock exchange(s).
    3. Exemptions from listing the following securities:
       • Bonds issued under section 54EC of the Income Tax Act, 1961 (43 of 1961);
       • Non-convertible debt securities issued pursuant to an agreement entered into between the listed entity of such securities and multilateral institutions; and
       • Non-convertible debt securities issued pursuant to an order of any court or tribunal or regulatory requirement as stipulated by a financial sector regulator.
    4. listed entity shall disclose to the stock exchange(s) the all the key terms including; embedded options, security offered, interest rates, charges, commissions, premium, period of maturity and other required details of the securities that are exempted from listing.


21. Dispute Resolution Procedure-Regulation 40 of the LODR Regulations provide for dispute resolution under the stock exchange arbitration mechanism. The stock exchanges were also instructed to establish a Standard Operating Procedure (“SOP”) for resolving disputes on investor services and investor entitlement. In cases where Registrar and Share Transfer Agents (“RTA”) are acting on behalf of the listed entities then, they shall be subjected to such arbitration mechanism.


22. Grievance Resolution- Regulation 4(2)(a) of the LODR Regulations imposes obligations on listed entities to safeguard and facilitate the shareholders’ rights.The listed entities can seek redressal from SEBI against SEBI-registered proxy advisors for resolution of any grievances. SEBI will examine the non-compliance by proxy advisors as per the Code of Conduct under SEBI Regulations, 2014 and procedural guidelines issued by SEBI.


23. Implementation of Committee’s recommendations- The Committee on Corporate Governance submitted several recommendations to SEBI and the same shall be applicable to listed entities. It essentially states that the entities with large number of unlisted subsidiaries can create a Group Governance Unit to monitor the functioning of the subsidiaries whereas, the other entities can create a Medium-term and Long-term Strategy for governance.


24. Buybacks and Delisting of Securities- Regulation 40(1) of the LODR Regulations mandatesthat only dematerialized securities of the listed entities can be transferred and not the physical ones. SEBI vide this Master Circular has clarified that shareholders holding physical securities can also tender in buy-backs as per the provisions of the respective Regulations.


25. Relaxation from Compliance- Regulation 36(1)(b) of the LODR Regulations requires listed entities to dispatch hard copies of abridged annual reports to shareholders who have not registered their email addresses. This Regulation is now relaxed for the AGMs conducted till September 30, 2023. Furthermore, the requirement of sending proxy forms under regulation 44(4) is also dispensed with till September 30, 2023,for general meetings held only through electronic mode.


26. Penalty for Non-Compliance- The SEBI Circular dated January 22, 2020,specifies a uniform structure of fines for non-compliance of the provisions of LODR Regulations and the SOP for suspension of trading in case of non-compliance. To ensure effective enforcement of the LODR Regulations, the depositories shall freeze/unfreeze the shareholding and securities of the non-compliant listed entity on intimation from the stock exchanges.Such penalising actions shall also be disclosed on thewebsites of the stock exchanges. The guidelines regarding fines and penalties are as follows:

    Sl. No	LODR Regulations		Fine payable and/or other action to be taken on non-compliance
    1.	Regulation 6(1)	Non-compliance with requirement to appoint a qualified company secretary as the compliance officer	INR 1,000(Rupees One Thousand Only)per day
    2.	Regulation 7(1)	Non-compliance with requirement to appoint share transfer agent	Same as above
    3.	Regulation 13(1)	Failure to ensure that adequate steps are taken for expeditious redressal of investor complaints. Fines would be imposed even during suspension period for non-compliance of regulation 13(1) the modalities of the same shall in terms of SEBI Circular dated 07.11.2022.	Same as above
    4.	Regulation 13(3)	Non-submission of the statement on shareholder complaints within the period specified under this regulation or under any circular issued in respect of redressal of investor grievances	Same as above
    5.	Regulation 17(1)	Non-compliance with the requirements pertaining to the composition of the Board including failure to appoint woman director	INR 5,000 (Rupees Five Thousand Only) per day
    6.	Regulation 17(1A)	Non-compliance with the requirements pertaining to the appointment or continuation of Non-executive director who has attained the age of seventy five years	INR 2,000 (Rupees Two Thousand Only) per day
    7.	Regulation 17(2)	Non-compliance with the requirements pertaining to number of Board meetings.	INR 10,000 (Rupees Ten Thousand Only) per instance
    8.	Regulation 17(2A)	Non-compliance with the requirements pertaining to quorum of Board meetings.	Same as above
    9.	Regulation 17(1A)	Non-compliance with the requirements pertaining to the appointment or continuation of Non-executive director who has attained the age of seventy five years	INR 2,000 (Rupees Two Thousand Only) per day
    10	Regulation 19(1)/19(2)	Non-compliance with the constitution of the nomination and remuneration committee	INR 2,000 (Rupees Two Thousand Only) per day
    11	Regulation 20(2)/(2A)	Non-compliance with the constitution of the stakeholder relationship committee	INR 2,000 (Rupees Two Thousand Only) per day
    12	Regulation 21(2)	Non-compliance with the constitution of the risk management committee	INR 2,000 (Rupees Two Thousand Only) per day
    13	Regulation 23(9)	Non-compliance with the requirement to disclose related party transactions in the format as specified and within the prescribed timeline	INR 5,000 (Rupees Five Thousand Only) per day
    14	Regulation 24A(2)	Non-compliance with submission of secretarial compliance report	INR 2,000 (Rupees Two Thousand Only) per day
    15	Regulation 27(2)	Non-submission of the Corporate governance compliance report within the period provided under this regulation	INR 2,000 (Rupees Two Thousand Only) per day
    16	Regulation 28(1)	Non-compliance with obtaining in-principle approval of stock exchange(s) before issuance of securities	INR 50,000 (Rupees Fifty Thousand Only) per instance
    17	Regulation 29(2)/(3)	Delay in furnishing prior intimation about the meeting of the board of directors	INR 10,000 (Rupees Ten Thousand Only) per instance
    18	Regulation 31(1)	Non-submission of shareholding pattern within the period specified	INR 2,000 (Rupees Two Thousand Only) per day
    19	Regulation 31A(3)(a)	Non-compliance pertaining to delay in submission of reclassification application to stock exchanges	INR 5,000 (Rupees Five Thousand Only) per day
    20	Regulation 32(1)	Non-submission of deviations/ variations in utilization of issue proceeds	INR 1,000 (Rupees One Thousand Only) per day
    21	Regulation 33	Non-submission of the financial results within the period specified under this regulation	INR 5,000 (Rupees Five Thousand Only) per day
    22	Regulation 34	Non-submission of the Annual Report within the period specified under this regulation	INR 2,000 (Rupees Two Thousand Only) per day
    23	Regulation 42(2)/(3)/(4)/(5)	Delay in/ non-disclosure of record date/ dividend declaration or non-compliance with ensuring the specified time gap between two record dates/ book closure dates	INR 10,000 (Rupees Ten Thousand Only) per instance of noncompliance per item
    24	Regulation 43A	Non-disclosure of Dividend Distribution Policy in the Annual Report and on the website of the entity	INR 25,000 (Rupees Twenty-Five Thousand Only) per instance
    25	Regulation 44(3)	Non-submission of the voting results within the period provided under this regulation	INR 10,000 (Rupees Ten Thousand Only) per instance of noncompliance
    26	Regulation 44(5)	Non-convening of annual general meeting within a period of five months from the close of the financial year	INR 25,000 (Rupees Twenty-Five Thousand Only) per instance
    27	Regulation 46	Non-compliance with norms pertaining to functional website	Advisory/warning letter per instance of non-compliance per item INR10,000 (Rupees Ten Thousand Only) per instance for every additional advisory/warning letter exceeding the four advisory/ warning letters in a financial year

    The stock exchanges shall disclosethe non-compliance and fines leviedagainst the listed entities on their websites and the fines so realised shall be credited to the “Investor Protection Fund”. The non-compliant listed entities shall be served with notice to pay fines and in case no fine is paid, the entire shareholding of the promoters and other securities held in the entity shall freeze.The non-compliant listed entities can also be moved to the “Z” category wherein trades shall take place on ‘Trade for Trade’ basis or their trading can be suspended as a whole.


27. Penalty for non-compliance with the MPS requirements- The recognized stock exchanges shall review the compliance with MPS requirements based on shareholding pattern on a quarterly basis within 30 days from the due date of submission of information. If non-compliance is found, the stock exchanges will issue due notices to the listed entities. A fine ofINR 5,000 (Rupees Five Thousand Only) per day shall be imposed for non-compliance of the listed entities and the same shall continue till the date of compliance. The depositories shall also freeze the shareholding till the compliance is achieved. In case the listed entity continues to be non-compliant for more than one year, the stock exchange shall impose a fine of INR 10,000 (Rupees Ten Thousand Only) per day in addition to freezing the shareholding of the promoters. Compulsory delisting of the non-compliant entity can also be done as per the statutory mandates. In case the non-compliant entity falls under any exception from the MPS requirements then no actions are required to be taken. Furthermore, on subsequent compliance with the MPS requirements, the stock exchanges can unfreeze the shareholding of the promoters of the listed entities and cease the imposed directions.

Conclusion The Master Circular serves as a comprehensive and essential guide for ensuring transparency, accountability, and investor protection in the Indian securities market. It consolidates various guidelines and updates issued by SEBI over time, providing listed entities with a one-stop reference for understanding their obligations and disclosure requirements.The Master Circular emphasizes on the significance of both non-financial and financial disclosures and mandates certain event-based disclosures such as defaults on payment of interest, divergence in asset classification, resignation of statutory auditors, etc. Furthermore, the penal actions for non-compliance of the LODR Regulations acts as a deterrent against non-compliance and serve to maintain discipline and integrity in the securities market.