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SEBI notifies significant changes to Listing Regulations and Control of Intermediaries among others

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SEBI on January 18, 2023, through four different notifications have brought amendments to several of its regulations. A quick snapshot of these amendments is below:

1. Amendment to SEBI LODR Regulations – SEBI has brought several significant amendments to the LODR Regulations, such as definition of senior management shall specifically include functional heads, irrespective of the designation given to them. It has also liberalized appointment or reappointment of a person on the Board of Directors of a PSU and now provide that such appointment or reappointment can be approved by the shareholders in next general meeting and has removed the condition that such approval needs to be taken in the next general meeting or within 3 months, whichever is earlier. The amendments also has brought in the requirement of disclosure of details of material subsidiaries of the listed entity, including the date and place of incorporation and the name and date of appointment of the statutory auditors of such subsidiaries, as a part of its Corporate Governance Report.

2. Change in control of intermediaries – SEBI has amendment various intermediaries’ regulations to introduce the definition of change in control. The definition provides that change in control shall be based on control as provided in Section 11(2)(h) of SEBI Act, 1992 (under which SAST Regulations have been notified) in case shares of the intermediaries are listed; if the shares of the intermediary are not listed then as per the definition of Companies Act, 2013; and in case the intermediary is not a body corporate then change in control shall be construed based on change in legal formation, ownership or controlling interest.

3. Amendment to Settlement Regulations – So far settlement orders could be issued only by a panel of WTMs or Adjudicating Officers. Given that SEBI had amended recently Intermediaries Regulations and delegated the decision-making power to quasi-judicial authorities (QJA), now settlement orders can also be issued by such competent officer.

4. Introduction of Qualified Stockbroker – SEBI has notified criteria based on which a stockbroker can now be identified as qualified stockbroker depending upon its size, scale of operations, likely impact on investors and the securities market, as well as governance and service standards. The amendment also provides that such stockbroker has to meet enhanced obligations and responsibilities.

The gazette notification for these amendments are attached for our readers and followers, who are welcome to send their questions or comments to Regstreet Law Advisors at info@regstreetlaw.com.

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