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The changes proposed by the Consultation Paper carry the potential of revamping the disclosure regime significantly. Business law and market regulation experts Abhishek Dadoo, Gaurang Mansinghka and Shubhra Wadhawan analyse here the key proposals and the consequences of implementing them.
With an aim to make the current disclosure regime for listed entities more robust and streamlined, the Securities and Exchange Board of India (“SEBI”), has issued a consultation paper proposing amendments to its existing provisions of Regulation 30 -- Listing Obligations and Disclosure Requirements-- Regulations, 2015 or “SEBI Listing Regulations”.
The changes proposed by the Consultation Paper carry the potential of revamping the disclosure regime significantly. The key proposals and consequences of implementing them have been briefly analysed below:
Quantitative thresholds for determination of materiality
The current regulations broadly categorise the disclosure requirements of listed companies into two parts: (i) events which are deemed to be material and therefore are mandatorily required to be disclosed (“Para A Disclosures”); and (ii) events which are required to be disclosed only if it is covered under the materiality policy formulated by the company itself (“Para B Disclosures”).