#SEBI LODR THIRD AMENDMENT 2024 COMING INTO EFFECT FROM 01-04-2025

 #SEBI LODR THIRD AMENDMENT 2024 COMING INTO EFFECT FROM 01-04-2025

SEBI LODR THIRD AMENDMENT 2024 COMING INTO EFFECT FROM 01.04.2025

Certain provisions, such as those concerning secretarial audit, will come into force starting 01.04.2025. THESE CHANGES ARE SET TO AFFECT LISTED COMPANIES AND AIM TO ENHANCE CORPORATE GOVERNANCE, INCREASE TRANSPARENCY AND ENSURE TIMELY REPORTING OF MATERIAL EVENTS.

 Some changes come with stringent timelines, while others mandate adopting new compliance measures.

Reg. 6 - Compliance Officer	The compliance officer shall be an officer who is in whole-time employment of the listed entity, not more than one level below the BoD and shall be designated as key managerial personnel (‘KMP’).
KMP FOR CIRP COMPANIES	Listed entities undergoing the corporate insolvency resolution process (‘CIRP’) must appoint KMP within 3 months of the approval of the resolution plan. During the interim period, at least one full-time KMP must be responsible for managing day-to-day operations.
Reg. 13 - Investor Grievance Redressal	This amendment introduces the requirement for listed entities to submit a detailed statement on a quarterly basis that outlines how investor grievances have been addressed in the format and timeline as may be prescribed by the BoD.
Reg. 17 - BoD	Non-executive directors (NEDs) aged over 75 years require shareholder approval for appointment or continuation in office.
	Any vacancy in the committees of the BoD must be filled within 3 months or by the date of the vacancy’s occurrence, whichever is earlier.
Reg. 23 - Related Party Transactions (‘RPTs’)	Corporate actions such as dividends, stock splits, and rights issues that are uniformly applicable to all shareholders are excluded from the definition of RPTs.
	Omnibus approvals can now be granted for recurring RPTs involving subsidiaries. Ratification provisions have also been introduced, allowing RPTs to be ratified by the Audit Committee within 3 months.
Reg. 24A - Secretarial Audit	Secretarial audits must now be conducted by peer-reviewed company secretaries starting 01.04.2025.
	Restrictions have been placed on secretarial auditors from rendering services that may impair independence.
Reg. 30 - Disclosure of Material Events	Disclosure timelines for material events, including litigation disclosures, have been relaxed. For example, entities now have 72 hours instead of 24 to disclose non-tax litigation claims.
	Enhanced thresholds for disclosing acquisitions and penalties imposed by sectoral regulators have been introduced.
Reg. 31A - Promoter Reclassification	Stricter timelines for promoter reclassification have been introduced:   a. The BoD must analyse requests within two months.
	Shareholder approvals must be obtained within 60 days of the stock exchange’s no-objection certificate (NOC).
Reg. 46 - Website Disclosures	Mandatory disclosures include Articles of Association (AoA), employee benefit scheme documents, and detailed profiles of BoD.
	Companies may provide QR codes and web links in newspaper advertisements for better investor access.

 

The above Amendment Regulations significantly overhaul corporate governance and disclosure requirements for listed entities. SEBI has taken a definitive step toward strengthening India’s securities market.