Compliances Under SEBI LODR,SAST and other SEBI laws
?? The average salary of a Company Secretary is just a fraction of what CFOs earn. ??
As I was going through Annual reports across various companies, I discovered something surprising: …
The average salary of a Company Secretary is just a fraction of what CFOs earn.??
The package of a Company secretaries was on an average of 1/3rd of the salary of CFOs.
The best I could find was ???
but in some cases, it's as low as one-tenth!
You might have seen comments suggesting that if Company secretaries could "increase their value," they’d earn more.
But I feel this is WRONG.?
To prove my point, I’ve summarized the complex web of securities law compliance that CS professionals navigate every quarter, half-year, and year.
The effort required is immense, and it’s time we recognize the true value of Company Secretaries.
And I’d love to hear from you—how do you feel about the same? Share your thoughts in the comments!
Next week, I’ll dive into the additional compliances under the Companies Act
So Let’s start with SEBI (LODR) regulations 2015
Quarterly Compliances
Half-yearly Compliances
ANNUAL COMPLIANCES
Do you think LODR compliances end here?
EVENT BASED COMPLIANCE
Within seven days of Tripartite agreement with RTA.
?Timelines:-Before issuing securities.
?where the securities are listed only on recognised stock exchange(s) having nationwide trading terminals, from all such stock exchange(s)
?where the securities are not listed on any recognised stock exchange having nationwide trading terminals, from all the stock exchange(s) in which the securities of the issuer are proposed to be listed.
?where the securities are listed on recognised stock exchange(s) having nationwide trading terminals as well as on the recognised stock exchange(s) not having nationwide trading terminals, from all recognised stock exchange(s) having nationwide trading terminals
??Timelines:- At least two working days in advance.
?? Covered:
a.???? financial results viz. quarterly, half yearly, or annual
b.??? proposal for buyback
c.???? proposal for voluntary delisting
d.??? fund raising by way of issue of securities (excluding security receipts, securitized debt instruments or money market instruments regulated by RBI), FPO, ADR, GDR, FCCB, QIP, Debt issue, preferential issue or any other method and for determination of issue price.
e.???? intimation shall also be given in case of any annual general meeting or extraordinary general meeting or postal ballot for items in point d.
f.?????? dividend and issue of convertible securities
g.???? bonus
h.??? Any alteration in the form or nature of any of its Listed securities.
i.?????? Any alteration in the date on which, the interest on debentures or bonds, or the redemption amount of redeemable shares or of debentures or bonds.
?? Timelines:-As specified. (30 mins/12 hours or 24 hours or as specified)
??Timelines:-One day prior to listing of securities.
?
?? Timelines:-Within 10 days of any capital restructuring of the listed entity resulting in a change ?exceeding +/- 2%.of the total paid-up share capital
?? Ensure that hundred percent of shareholding of promoter(s) and promoter group is in dematerialized form.
??Timelines:-Obtain observation letter or No-objection letter before filing the scheme.
?? The listed entity desirous of undertaking a scheme of arrangement or involved in a scheme of arrangement, shall file the draft scheme of arrangement, proposed to be filed before any Court or Tribunal under sections 391-394 and 101 of the Companies Act, 1956 or under Sections 230- 234 and Section 66 of Companies Act, 2013, whichever applicable,along with a non-refundable fee as specified in Schedule XI,] with the stock exchange(s) for obtaining ?the No-objection letter, before filing such scheme with any Court or Tribunal, in terms of requirements specified by the Board or stock exchange(s) from time to time.
?? Timelines:-Within two days of information.
??Timelines:-Within two working days of conclusion of the Meeting.
???Timelines:-Prior approval from Stock Exchange.
??Timelines:-Maintenance of a functional website containing basic information including regulation 30 disclosures.
The listed entity shall update any change in the content of its website within two working days from the date of such change in content.
what about……
CORPORATE ACTIONS
Timelines:-Notice in advance of at least seven working days (excluding the date of intimation and the record date).
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For:
(a) declaration of dividend;
(b) issue of right or bonus shares;
(c) issue of shares for conversion of debentures or any other convertible security;
(d) shares arising out of rights attached to debentures or any other convertible security
(e) corporate actions like mergers, de-mergers, splits, etc;
In the case of rights issues, the listed entity shall give notice in advance of atleast three working days (excluding the date of intimation and the record date).
The listed entity shall recommend or declare all dividend and/or cash bonuses at least five working days (excluding the date of intimation and the record date) before the record date fixed for the purpose
The time gap of at least thirty days between two record dates
Timelines:-? Announcement of closure dates with a time gap of at least thirty days between two dates.
Regulation 42(1)-(4) shall apply.
Is LODR the only securities Law???
Compliances under SEBI (Depositories and Participants) Regulations, 2018
?
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
SEBI (Prohibition of Insider Trading) Regulations, 2015.
Regulation 7 (2) Continual Disclosures :
(a). Every promoter, employee and director of every company shall disclose to the company the number of such securities acquired or disposed of within two trading days of such transaction if the value of the securities traded, whether in one transaction or a series of transactions over any calendar quarter, aggregates to a traded value in excess of ten lakh rupees or such other value as may be specified;
(b). Every company shall notify the particulars of such trading to the stock exchange on which the securities are listed within two trading days of receipt of the disclosure or from becoming aware of such information.
(Transaction type include buy/sales/pledge/revoke/Invoke)
The trading window Closure for financial results:
The trading window is closed from the end of each quarter until 48 hours after the declaration of financial results
The below thing is something that I am really eagerly waiting for as this should really remove the monotonous work out of the work of Company secretaries to a good extent.
Proposed changes:
The consultation paper proposed integrating periodic filings required under the LODR Regulations by merging them into two broad categories
a.???? Governance related filings (Corporate Governance report, statement on redressal of investor grievance).
b.??? Financial related filings (Financial results, statement of deviation in use of proceeds, related party transaction etc.).
The timeline for submission of Integrated filing (Governance) shall be within 30 days from the end of the quarter / half-year / year for submission to stock exchanges.
The timeline for Integrated Filing (Financial) shall be within 45 days (or 60 days for the last quarter) from the end of the quarter / half-year for submission to stock exchanges.
c.???? In the subsequent phases, SEBI may explore the possibility of expanding the scope of Integrated Filing for listed entities by including other filings, if any, under the LODR Regulations and filings required under other SEBI regulations.
d.??? Proposed filings to be redundant:
? Reg. 7(3): Annual filing under regulation 7(3) on share transfer facility (maintained either in house or by Registrar to an issue and share transfer agent registered with the Board) may be dispensed with as the details are captured as part of other filings viz., share capital reconciliation audit report. Further, change in share transfer agent has to be disclosed by the listed entity as part of the event-based disclosure requirements.
? Reg. 39(3): Separate disclosure requirement under regulation 39(3) of the LODR on loss of physical share certificates. The Committee noted that physical shareholding in the securities market ecosystem is less than 1%. Further, with effect from April 1, 2019, transfer of shares in physical form is no longer permitted. Therefore, a separate intimation on loss of share certificate to exchanges cautioning members against dealing with such physical shares may no longer be relevant.
? Reg. 40(9) & (10): Annual certification under regulation 40(9) & (10) on issue of certificates lodged for transfer, renewal, consolidation etc. within the specified timeline. The Committee noted that this certification may be done away with due to prohibition on transfer of shares in physical mode and negligible physical holding. Further, investor service requests in relation to the physical shares for subdivision, split, consolidation, renewal, exchanges, endorsements, issuance of duplicates thereof are also currently issued in demat mode.
e.??? System driven disclosure of certain filings??
§? Automatic disclosure of shareholding pattern of listed entities based on the data available with depositories.
§? Automatic disclosure of credit ratings, both new ratings and revision in ratings, would be possible as the data is already being shared by credit rating agencies with Stock Exchanges
f.????? Website disclosures ??
Companies may be permitted to provide links on their websites instead of uploading the same information that is already available on Stock Exchange website.
g.???? Newspaper advertisements ??
The requirement of publishing detailed newspaper advertisements for financial results in terms of regulation 47(1)(b) may be optional as reliance on newspapers for financial results of a company has substantially reduced with advent of technology.
However, a small box advertisement with the QR code and weblink to the page where full financial results of the listed entity are available shall be published for the benefit of the investors.
With the QR code I just remembered...
Note:
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With warm regards,
Keep Smiling,
Saeed Shaikh
FOOTNOTES
CREDITS:
Thanks to Mrunal and Juhi for helping me learn a lot. Further thanks to priyanka too for taking time during last week for few of my silly doubts!
Graduated from RAMNIRANJAN JHUNJHUNWALA COLLEGE | PURSUING CS | Successfully Cleared CS EXECUTIVE LEVEL | EX- NSS LEADER
2 个月Absolutely agree with you. I recently filed annual compliance reports of a company which didn't file the same for the past 5 years. But the company now is ready to pay lakhs of fines of around 5 lakhs.
CS handling Global Corporate Secretarial Compliances
2 个月Amazing article Saeed and you have summarised compliances really well. Also I am with you on your thought in relation to reward and responsibility ratio not being fair. Such deliberations should be open for discussion to have visibility of what more is expected….
COMPANY SECRETARYM.COM,B.COM (H)
2 个月This is a great information.but salary of CS is not determined by the workload where as companies pay hefty fines for non-compliance but will not hire or make a team of CS to keep abreast with all the applicable law and compliances. CS as a profession is the Key for the management and which endeavors compliance and make the company's work flow smooth. Many of the companies in India they are not recognizing the same and they are just saying what sort of regular work will you have. So in the coming days their will be a greater environment and scope for this profession. I request the institute also to bring a standard industry packages for Company Secretaries so that we will help the candidates to do their work efficiently and effectively.
|CS Management Trainee at AKM Global| |CS Finalist| |BHU|
2 个月I agree. CS is much more capable of what they are actually paying to it. Average pay should be increased. It is not easy for a layman to understand such diverse laws in India, so CS are hired. We need recognition for our prestigious profession??
Qualified Company Secretary
2 个月Very informative Saeed Shaikh