SEBI, by way of a Notification dated December 12, 2024, has introduced significant amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’).

Key amendments are set out below:

i.    The following transactions have been carved out from the scope of related party transactions (‘RPTs’), and are exempt from the approval and disclosure requirements for RPTs prescribed under the Listing Regulations:

a. prescribed corporate actions (including by an entity other than the listed company) which are uniformly applicable to all shareholders in proportion to their shareholding;

b. acceptance of current account deposits or saving account deposits by banks and payment of interest thereon in compliance with RBI directions; and

c. retail purchases from any listed entity or its subsidiary by its directors or its employees, without establishing a business relationship and at terms which are uniformly applicable/offered to all employees and directors;

ii.   Remuneration and sitting fees paid to directors, key managerial personnel, or senior management (excluding promoters/promoter group) is exempt from prior approval of audit committee, provided such transaction is not a material RPT. Such transactions are no longer required to be disclosed to stock exchanges;

iii.  If any subsisting agreement entered into by an employee, director, or promoter with regard to compensation or profit sharing in connection with dealings in the securities of an entity continues subsequent to listing of such entity, then such agreement will require approval of the board of directors. If approved by the board, such an agreement will also require approval of the public shareholders (who are not interested persons) of such listed entity in the first board meeting after listing;

iv.   If any decision of the board of directors pertaining to material events or information is taken in a meeting after normal trading hours, but more than three hours before the beginning of trading hours of the next trading day, then such decision is required to be disclosed within three hours from the closure of such board meeting; and

v.    The process for reclassification of promoters has been revised. Key changes include:

a. introduction of a time bound period for reclassification, including a 30 day period for stock exchanges to provide their no-objection (instead of approval requirements prescribed prior to the Notification) from the date of the application (excluding time taken to respond to queries); and

b. the board of directors is required to provide their views on the proposed reclassification within 60 days (instead of earlier 90 days) etc.