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REGULATION 30 of SEBI (LISTING OBLIGATIONS AND

DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AN


ANALYSIS
The Securities Exchange Board of India (SEBI) has notified the new Listing
Regulations on 2nd September, 2015, i.e SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, (hereinafter referred to as
Listing Regulations) which will be effective from 90 Days from the date of
notification i.e 1st December, 2015.
The main object of the SEBI for introducing the new Listing Regulations was to
consolidate the scattered Listing Regulations/Requirements for varied securities
under one umbrella and to arrange the Listing Regulations with the provisions
of Companies Act, 2013.
The focus of the write up will be on the Concept of Material Disclosure of
Information/Event as mentioned in Regulation 30 of the Listing Regulations.
As per the Blacks Law Dictionary, 2nd Edition, the term Material
Information is defined as When it is revealed to the public, any company or
product information that is likely to change a security's perceived value.1 Apart
from this, the United States Supreme Court has defined the term Materiality
in a 1976 court decision as an information that would present a substantial
likelihood that the disclosure of the omitted fact would have been viewed by the
reasonable investor as having significantly altered the total mix of information
made available. (TSC Indus. v. Northway, Inc., 426 U.S. 438, 449 (1976))2.
The Supreme Court further affirmed this definition in Matrixx Initiatives, Inc. v.
Siracusano, 563 U.S. (2011).
REGULATION 30: DISCLOSURE OF EVENTS OR INFORMATION
Regulation 30 of the Listing Regulation, 2015, corresponds to the Clause 36 of
the Listing Agreement.
The SEBI in Clause 36 of the present Listing Agreement has provided the list of
certain events which would be treated as material events/ information.
1

http://thelawdictionary.org/

http://www.sasb.org/approach/legal-faqs/

No specific definition has been provided in the Agreement of the term Material
Event/Information or Materiality. However as per Clause 36 of the Listing
Agreement, the material event/information would be such event/information
which;
Affects the Performance/ Operations of the Company
Is considered as the Price Sensitive Information.
In contrast to Clause 36 of the Listing Agreement, the Regulation 30 of the
Listing Regulation,2015, categorises the material event/ information into;
1. Events Specified in Part A of Part A of Schedule III of the Listing
Regulations (Deemed Material Events)
2. Events Specified in Part B of Part A of Schedule III of the Listing
Regulations (Events/Information whose materiality will be tested on the
basis of the Policy framed by the Listed Entity)
List of Events Specified in Part A of Part A of Schedule III of the Listing
Regulations (Deemed Material Events)
The list of events mentioned in this part of Part A of Schedule III is prescriptive
in nature that specify the events that should and must be disclosed to the Stock
Exchanges in order make the information available publicly.
List of Events Specified in Part B of Part A of Schedule III of the Listing
Regulations (Events whose materiality will be tested on the basis of the
Policy framed by the Listed Entity)
As per the Regulation 30, every Listed Entity shall make disclosures to Stock
Exchanges which in the opinion of Board of Directors of the Listed Company is
material. The Listed entity should lay down the policy/guideline approved by
the Board of Directors determining the materiality of an event/information
based on the following criterias as mentioned in the Regulation 30 (4) of the
Listing Regulations;
The omission of an event/information which is likely to
discontinuity or alteration of event or information already
publicly;
The omission of an event/information which is likely to
significant market reaction if the said omission came to light
date.
If the Board thinks any other matter is material.

result in
available
result in
at a later

In other words, the Board of Directors of the Listed entity will lay down the
policy/guidelines for testing the materiality of an event/information for the
purpose of deciding whether to make the disclosure to Stock Exchange or not.
Such policy/guidelines shall be disclosed on the website of the listed entity.
Any other event /information which may be material other than events/
information specified in the above categories needs to be disclosed to the
Stock Exchange. (Regulation 30(12))
WHO SHALL BE RESPONSIBLE TO DISCLOSE;
Regulation 30 (5) of the Listing Regulation clearly states that one or more Key
Managerial Person (KMP) authorised by the Board of Directors of the Listed
entity for determining the materiality of an event/ information and shall disclose
such events/information to the Stock Exchange.
TIME FRAME TO DISCLOSE
The listed entities shall disclose the material events/information to the Stock
Exchange within 24hours of the occurrence of the event or the information
except the outcome of the Board of Directors Meeting shall be disclosed within
30 minutes of the conclusion of the Board Meeting.
In case the disclosure is made after 24 hours of the occurrence, then along with
relevant disclosure provide the reasons or explanation for delay.
OTHER DISCLOSURES
The contact details of KMP(s) authorised by the Board of Directors shall be
disclosed to the stock exchanges and on the website of the listed entity.
The KMP(s) shall also disclose the material event or information on the website
of the Company for s period of 5 years and thereafter as per the archival policy
of the listed entity, as disclosed on its website.
Further, the listed entities shall also disclose the material event or information
about its subsidiaries.
The SEBI has also issued a circular dated 9th September,2015, relating to
continuous disclosure requirements for listed entities. The circular states the
details that needs to be disclosed while disclosing an event/information
mentioned in Part A or Part B of Part A of Schedule III with the Stock
Exchange. Further, the circular also provides the guidelines as to when an event
/information can be said to have occurred.

CONCLUSION
The Principles for ongoing disclosures and the Material Development Reporting
by Listed entities have been recognised by the International Organisation of
Securities Commissions and worldwide by various Securities Exchange
Commissions for example USA, Japan , Australia etc.
The fundamental basis for recognising such principles is to ensure fair and full
disclosure to safeguard the interest of the investors trading at the securities
markets and its investment decisions. This principle ensures timely disclosure of
the information in connection with the Listed Entities.
Thus to bring it in sync with the IOSCOs Principles for ongoing disclosures
and the Material Development Reporting by Listed Entities, the SEBI has also
included such disclosures in the Listing Regulations,2015.

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