New Disclosure and Compliance Obligations for Listed Companies in India

Posted by Written by Melissa Cyrill Reading Time: 6 minutes

SEBI, the securities and commodity market regulator in India, has amended disclosure requirements and corporate governance obligations for listed companies in the country. New provisions include dispelling rumors in the media and providing clarification to what is being reported on the listed company. Further, guidelines on communicating information to the stock exchanges, obligations to fill vacancies of key managerial personnel, and ESG compliance expectations have been provided.

The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Second Amendment) Regulations, 2023 (SEBI LODR Regulations, 2023) will become effective on the 30th day from the date of their publication in the Official Gazette.

The SEBI LODR Regulations, 2023, was published in the Official Gazette on June 14, 2023 (see here).

Listed entities should review and update their policies and procedures to comply with these amended reporting requirements. It is essential to ensure timely and accurate disclosure of information to maintain compliance and enhance transparency and accountability in the Indian capital market.

Below we mention the key changes introduced.

Filling compliance officer and key managerial personnel vacancies in the office of a listed entity

Vacancies for positions, such as Compliance Officer and key managerial personnel like CEO, MD, Whole Time Director, Manager, Chief Financial Officer, and Director, must be filled promptly, within a maximum of three months from the date of the vacancy.

Sale, lease, or disposal of undertakings outside scheme of arrangement

If a listed entity intends to sell, lease, or dispose of its whole or substantially whole undertaking, a special resolution passed by shareholders is required, with the majority of public shareholders voting in favor.

This requirement doesn’t apply when the undertaking is sold, leased, or disposed to a wholly owned subsidiary of the listed entity, subject to certain conditions.


Listed entities must disclose details of cyber security incidents, breaches, or data/document loss in their quarterly compliance reports on corporate governance.

Sustainability reporting

Regulation 34(2)(f) has been revised to establish the Business Responsibility and Sustainability Report as a replacement for the previous Business Responsibility Report.

As per the amendment, the top 1000 listed entities based on their market capitalization will now be obligated to submit a comprehensive report that includes disclosures related to environmental, social, and governance factors.

For the purpose of this clause:

  • The market capitalization will be determined as of the 31st day of March of each financial year.
  • The Business Responsibility and Sustainability Report Core will consist of specific key performance indicators that will be specified by the Board periodically.
  • The “value chain” for listed entities will be defined by the Board periodically.

The format for the report may be specified by the Board from time to time. For reference – see here.

Board of directors

Starting from April 1, 2024, the continuation of a director of a listed entity requires shareholder approval every five years, from the date of their appointment or reappointment.

Directors who haven’t obtained shareholder approval for the past five years as of March 31, 2024, need to secure approval at the first general meeting held after that date.

There are exceptions for directors appointed by court or tribunal order, directors retiring by rotation under the Companies Act, and nominee directors of certain entities.

Special shareholder rights

Special rights granted to shareholders of listed entities must be approved through a special resolution in a general meeting every five years, from the date of granting such rights.

Special rights granted before the effective date must be approved by shareholders through a special resolution within five years from the effective date.

Certain special rights granted to regulated financial institutions or debenture trustees are exempted from this requirement.

Materiality thresholds for disclosure of events or information

SEBI has introduced precise materiality thresholds for determining events or information that listed entities must disclose to stock exchanges.

The materiality threshold is determined based on the lower of the following:

  • Two percent of turnover as per the last audited consolidated financial statements.
  • Two percent of net worth as per the last audited consolidated financial statements (except for negative net worth).
  • Five percent of the average absolute value of profit or loss after tax as per the last three audited consolidated financial statements.

Any event or information meeting the materiality threshold must be disclosed within 30 days from the effective date.

The board-approved policy for determining materiality should adhere to these thresholds and include mechanisms for identifying potential material events/information and reporting them to relevant key managerial personnel.

Timeline for disclosure of material events

Listed entities must disclose material events/information to stock exchanges within specified timelines:

  • Within 30 minutes from the closure of the board meeting where the decision was made.
  • Within 12 hours from the occurrence of an event or information originating from within the listed entity.
  • Within 24 hours from the occurrence of an event or information not originating from within the listed entity.

Response to reported events / information

The top 100 listed entities (effective from October 1, 2023) and top 250 listed entities (effective from April 1, 2024) must confirm, deny, or clarify reported events or information in the mainstream media that indicate specific material events within 24 hours of such reporting.

The term “mainstream media” encompasses print or electronic media, including the following:

  • newspapers registered with the Registrar of Newspapers for India; 
  • news channels permitted by the Government of India;
  • content published by the publisher of news and current affairs content, as defined under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021; and
  • newspapers, news channels, or news and current affairs content registered, permitted, or regulated in jurisdictions outside India.

Disclosure of communication from authorities

Listed entities must disclose any communication received from regulatory, statutory, enforcement, or judicial authorities along with the relevant event or information, unless prohibited by the authority.

Disclosure of agreements

Agreements entered into by shareholders, promoters, related parties, directors, key managerial personnel, or employees that impact the management or control of the listed entity or impose restrictions or liabilities must be disclosed to the stock exchanges, even if the listed entity is not a party to the agreement. The parties involved in the agreement must inform the listed company within two working days of entering into or signing such agreements. The listed company must disclose all such agreements to the stock exchanges and its website within specified timelines.

In the company’s Annual Report for either FY 2022-23 or 2023-24, details of the existing agreements, including the number, key features, and a link to complete information on the company’s website, must be provided.

Material events disclosure

The following important events and information must be disclosed to the stock exchanges without applying any materiality guidelines. These events have been included in Paragraph A of Part A of Schedule III of the SEBI LODR Regulations, 2023.


  • Any acquisitions by the listed entity, including agreements to acquire, if the acquisition cost or share price exceeds the Materiality Threshold.

Sale or disposal

  • Sale or disposal of a whole or substantially whole undertaking or subsidiary of the listed entity.
  • Sale of stake in an associate company, including agreements to sell shares or voting rights, resulting in:
    >> The company no longer being a wholly owned subsidiary, subsidiary, or associate company of the listed entity.
    >> The sale amount exceeding the Materiality Threshold.

Fraud or financial defaults

  • Instances of fraud or financial defaults committed by the listed entity, its subsidiary, promoter, director, key managerial personnel, senior management, or the arrest of any of the aforementioned individuals, in India or abroad.


  • Resignation of key managerial personnel, senior management, compliance officer, or director (excluding independent directors) of the listed entity, accompanied by a detailed resignation letter explaining the reasons.

This disclosure must be made within seven days of the resignation taking effect.

Indisposition or unavailability

  • Inability of the Managing Director (MD) or Chief Executive Officer (CEO) of the listed entity to fulfill their role’s requirements in a regular manner for more than 45 days within any rolling period of 90 days.

The reasons for their indisposition or unavailability must be provided.

Announcement via media

  • Announcements or communications made by directors, promoters, key managerial personnel, or senior management of the listed entity through social media intermediaries or mainstream media.

This disclosure is necessary when the event or information is material for the listed entity and has not already been made available to the public by the listed entity.

Actions or orders by authorities

  • Actions initiated or orders passed by any Authority against:
    >> The listed entity.
    >> Its directors, key managerial personnel, senior management, or promoters.
    >>Its subsidiary.

These actions may include search or seizure, reopening of accounts and investigation under the Companies Act, 2013, suspension, imposition of fines or penalties, settlement of proceedings, debarment, disqualification, closure of operations, sanctions imposed, warnings or cautions, or any other similar actions. Relevant details of these actions must be disclosed.

Voluntary revision

  • Voluntary revision of financial statements or board reports of the listed entity.

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