SEBI Proposes New Compliance Framework for High Value Debt Listed Entities

The Securities and Exchange Board of India (SEBI) has proposed changes to the corporate governance disclosure framework for High Value Debt Listed Entities (HVDLE). Key proposals include submitting secretarial compliance and periodic corporate governance reports, and reinforcing oversight of Related Party Transactions (RPTs) through audit committees and shareholder involvement.

In a significant move, the Securities and Exchange Board of India (SEBI) has unveiled proposals aimed at refining the corporate governance framework for High Value Debt Listed Entities (HVDLE). Under these new guidelines, entities classified as HVDLEs must enhance transparency in their reporting mechanisms.

The proposed regulations mandate that HVDLEs submit a secretarial compliance report to the stock exchanges within 60 days of the financial year's end, as well as a routine compliance report on corporate governance within 21 days at the end of each period. A notable aspect of this proposal is the meticulous oversight of Related Party Transactions (RPTs), ensuring they undergo scrutiny by audit committees, debenture trustees, and shareholders.

Another significant facet of SEBI's proposal is the yearly review of long-term or recurring RPTs by the audit committee. SEBI emphasizes that shareholder empowerment is crucial, urging HVDLEs to provide adequate information for shareholders to make informed decisions. The watchdog is seeking public feedback on these policies until May 26.

(With inputs from agencies.)