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COVID-19 – SEBI issues relaxations for Listed Companies

CS Isha DeshwalThe global outbreak of corona virus (COVID-19) is an unprecedented event that has led to lockdowns and unexpected restrictions on the public as well as the corporate sector across the world. Due to this situation companies are likely to face difficulties in undertaking timely compliances of various applicable laws. Keeping in mind the aforesaid, SEBI has issued numerous relaxations for compliances under provisions of the SEBI. We have analysed below some of the major relaxations introduced by SEBI.

Relaxations introduced by the Securities and Exchange Board of India

In order to reduce compliance burden on listed entities, the Securities and Exchange Board of India (SEBI) has, inter alia, issued various circulars on 29th April 2021. Such relaxations are as below:

Extension of time for compliances/filings –

SEBI has extended the last date of filing for various compliances as quarterly, half yearly and annual submissions to be made. Click here  for order Relaxation from  compliance  with  certain  provisions  of  the  SEBI(LODR) Regulations 2015 and Click here for the certain  provisions  of  the  SEBI(LODR) regulations 2015/ other applicable circulars  due to CoVID-19 pandemic.

The major relaxations are as below:

S.N Regulations Requirement Due Date Extended deadline for the quarter/half year/ year ending March 31, 2021 
1. Regulation 24A read with circular No CIR/CFD/CMD1/27/2019  dated  February 8,2019 relating to Annual  Secretarial  Compliance report Sixty  days  from the end of FY May 30, 2021 June 30, 2021
2. Regulation 33  (3) Quarterly/financial  results/Annual Audited Financial Results Forty-five    days from  end  of  the quarter/ Sixty days from the end of FY May 15,2021
May 30, 2021		 June 30, 2021
3. Regulation   32   (1)   read   with SEBI circular No. CIR/CFD/CMD1/162/2019 dated  December  24,  2019  on Statement  of  deviation   or variation in use of funds Along   with   the financial  results (within  45  days of  end  of  each quarter/ 60 days from  end  of  the FY) May 15,2021
May 30, 2021		 June 30, 2021
For  entities  that  have  listed  their  debt  securities  under the  SEBI  (Issue  and  Listing  of  Debt Securities) Regulations,   2008, EBI   (Issue   and   Listing   of   Non-convertible   Redeemable Preference  Shares  Regulations,  2013, and SEBI  (Public  Offer  and  Listing  of  Securitised  Debt Instruments) Regulations, 2008
4. Regulation 52(1)-Half-yearly financial Results
Regulation 52(2)- Annual Audited Financial Results		 Forty-five    days from  end  of  the quarter/ Sixty days from the end of FY May 15,2021
May 30, 2021		 June 30, 2021
5. Regulation 52(7) read with SEBI circular no. SEBI/HO/DDHS/08/2020 Dated January 17, 2020 on Statement of deviation or variation in use of funds Along   with   the financial  results (within  45  days of  end  of  each quarter/ 60 days from end  of  the FY) May 15,2021
May 30, 2021		 June 30, 2021
For entities that have listed their bonds under the SEBI (Issue and Listing of Municipal Bonds Regulations, 2015
6. Requirements as per circular no. SEBI/HO/DDHS/CIR/P/134/2019 dated November 13, 2019 Annual Audited Financial Results Sixty days from the end of FY May 30, 2021 June 30, 2021
For entities that have listed Commercial Paper
7. Requirements as per SEBI/HO/DDHS/DDHS/CIR/P/2019/115 dated October 22, 2019 Half  Yearly Financial Results/Annual Audited Financial Results Forty-five days from end of the half year/ 60 days from the end of FY May 15,2021 May 30, 2021 June 30, 2021

 

  • Listed   entities   are   permitted   to   use   digital   signature certifications for authentication/ certification  of  filings/submissions  made  to  the  stock  exchange under SEBI(LODR) Regulations, 2015 for all filings until December 31,2021.
  • The  Circular  is  issued  in  exercise  of  the  powers  conferred  under Section  11(1)  of  the Securities  and  Exchange  Board  of  India  Act,  1992  read  with  Regulation 101 of the LODR Regulations.

Extension of time for compliances with the following regulatory requirements by the Trading Members / Clearing  Members  /  Depository  Participants  /  KYC  Registration  Agencies  –   In view of the prevailing situation due to Covid-19 pandemic and representation received from the Association of National Exchanges Members of India (ANMI), Stock Exchanges and Depositories, it has been decided to extend the timelines for compliance with the following regulatory requirements by the Trading Members / Clearing  Members  /  Depository  Participants  /  KYC  Registration  Agencies,  Click here for order. The relaxations are as below:

 

S.N Compliance Extended timeline / Period  of exclusion
1. Maintaining call recordings of orders / instructions received from clients. Till June 30, 2021
2. Submission  of  Internal  Audit  Report  for  HYE March-2021 Till July 31, 2021
3.

 

 

 

 KYC application form and supporting documents of the clients to be uploaded on system of KRA within 10 working days. Till June 30, 2021, documents may be uploaded on to the system  of  KRA within  15 working days.

*A  30-day  time period  is provided to SEBI Registered Intermediary after  June 30,2021  to clear the backlog
4.

 

 Issue of Annual Global Statement to clients. Till June 30, 2021.

*Relaxation is provided only if the client has requested  for  a physical statement.
5. Net  worth  certificate  in  Margin  Trading  for  CM Segment for HYE March 31, 2021 Till July 31, 2021
6. Net  worth  certificate  for  all  members  for  HYE March 2021. Till July 31, 2021
7. Reporting of Risk based supervision Till July 31, 2021
8. Risk Assessment Template Till July 31, 2021
9. Reporting  for  Artificial  Intelligence  (AI)  and Machine Learning (ML) applications Till July 31, 2021
10. Client Funding Reporting Till June 30, 2021
11. Submission of System Audit Report for the period ended March 2021 Till July 31, 2021
12. Submission of Cyber Security & Cyber Resilience Audit Report for the period ended March 2021 Till July 31, 2021
13. To operate the trading terminals from designated alternate locations. Till June 30, 2021
14. Compliance certificate for Margin Trading for CM Segment for HY ended March 31, 2021 Till July 31
15. System Audit /Cyber Audit Report – Algo / Type III Members for the period ended March 31, 2021 Till July 31
16. Action  taken/follow-on  audit  report  for  System Audit /Cyber Audit Report for 2019-20 Till July 31

Relaxation  in  time  period  for  certain  activities  carried  out  by  Depository Participant:

S.N Compliance Extended timeline / Period of exclusion
1. BO Grievances Report Till May 31, 2021 for the month of April 2021 and till June 30,  2021,  for  the month of May 2021.
2. Redressal of investor grievances During  period  from  April 01, 2021 to June 30, 2021 timeline   permitted   for redressal  of  grievances extended to 30 days.
3. Closure of demat account During  period  from  April 01, 2021 to June 30, 2021 may  be  excluded  in timelines  of  30  days provided no charges shall be  levied  for  the  period after  receipt  of  closure request.

 

  • This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992  and  Section 19 of the Depositories Act to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets.

In current scenario of the lockdown and restrictions imposed, the above temporary relaxations will enable companies to avoid penalties on account of unavoidable delay in meeting their regulatory compliances.

Disclaimer: This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts. 

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