Sebi Proposes Major Compliance Relief for Listed NCDs: New Rules to Cut Costs and Simplify Reporting

On Friday, the Securities and Exchange Board of India (Sebi) proposed new rules to make compliance easier for companies with listed non-convertible securities (NCDs). These changes aim to lower the cost of compliance, as part of the government’s 2023-24 Budget plan.

New Rules for Financial Results

Sebi wants to make the process for approving and signing financial results for NCD-listed companies similar to those for equity-listed companies. This means financial results would need approval from the board of directors and must be signed by a designated official, just like with equity-listed firms.

Aligning Disclosure Rules

The proposed changes also include aligning the rules for disclosing fraud and defaults by key managers in NCD-listed companies with those for equity-listed companies. This will make disclosure rules more consistent across different types of listed entities.

Streamlining Notification Times

Sebi is suggesting that companies with listed NCDs should notify stock exchanges of record dates within three working days, down from the current seven days. This will give market participants more time to respond.

Filing in XBRL Format

Sebi proposes that all disclosures by companies with listed NCDs be filed in XBRL (eXtensible Business Reporting Language) format, rather than both XBRL and PDF formats. This change will simplify the filing process and reduce duplication.

Relaxing ISIN Restrictions

The new rules would also ease restrictions on International Securities Identification Numbers (ISINs) for unlisted securities that were outstanding as of December 31, 2023, if those ISINs are later listed. This will make it easier for these securities to transition to being listed.

Sebi is seeking public feedback on these proposals by September 6.