Sebi may extend relief to NCDs from sending physical financial statements

Markets regulator Sebi on Monday proposed limited relaxation to issuers of listed non-convertible debt securities from the requirement to send hard copies of key financial documents to investors.

In its consultation paper, the regulator has proposed extending an exemption pertaining to Regulation 58(1)(b), which mandates sending hard copies of financial statements and related documents to holders of non-convertible securities who have not registered their email addresses.

The move is in line with the Ministry of Corporate Affairs' (MCA) decision to extend similar relaxations until September 30, 2025.

Based on the MCA's extension and stakeholder requests, Sebi proposed "no penal" action for entities having listed non-convertible securities for not sending physical copies of financial statements, including the board's report, the auditor's report and other documents.

 

Sebi said that entities having listed non-convertible securities and have not sent hard copy of statement to those holders of non-convertible securities, who have not registered their email address, "shall not be subject to any penal action for non-compliance with Regulation 58(1)(b) under the LODR Regulations for the period from October 1, 2024, to a specified date in 2025".

This would be followed by a second phase of relaxation lasting until September 30, 2025, subject to further disclosures made through advertisements.

The entities need to include in their advertisement a web link to the statement showing key details of all documents to ensure that holders of these securities can easily access the information, Sebi added.

The regulator has invited public feedback till May 12 on its proposal regarding limited relaxation from compliance with specific provisions under Sebi's LODR norms.