The Securities and Exchange Board of India (SEBI) had its Board meeting on 27th March 2019 wherein following decision was approved:-
1. Amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI (LODR) Regulations, 2015”) - payment relating to royalty and brand usage:-
SEBI had vide notification dated 9th May 2018 amended various provisions of SEBI (LODR) Regulations, 2015 (which were recommended by Kotak Committee earlier). One of these amendments was the insertion of Regulation 23(1A) which was effective from 1st April 2019.
The wordings of Regulation 23(1A) are as follows:-
23(1A) - Notwithstanding the above, a transaction involving payments made to a related party with respect to brand usage or royalty shall be considered material if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year, exceed two percent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity
As per Regulation 23(4) of SEBI (LODR) Regulations, 2015, all material related party transactions shall require approval of the shareholders through resolution and no related party shall vote to approve such resolutions whether the entity is a related party to the particular transaction or not
In this regard, various representations were received by SEBI and with a view to analyzing them, SEBI has decided to defer the implementation of this provision for three months i.e. till June 30, 2019.
2. Consultation Paper on Self Regulatory Organizations in Securities Market
SEBI approved the proposal for undertaking a public consultation process to amend the SEBI (Self-Regulatory Organizations) Regulations, 2004 with an objective of defining SRO, rationalising the process of recognition and strengthening the role of Self-Regulatory Organizations in the securities market.
A copy of the Press Release issued by SEBI is available on the following Link:-
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