SEBI UPDATES
SEBI RELAXES TIMELINES FOR HOLDING AIFs' INVESTMENTS IN DEMATERIALISED FORM
Securities and Exchange Board of India ("SEBI"), vide its circular dated February 14, 2025, has relaxed the timelines for Alternative Investment Funds ("AIFs") holding their investments in dematerialised form.
In terms of Regulation 15(1)(i) of the SEBI (AIF) Regulations, 2012, AIFs are mandated to hold their investments in dematerialised form, subject to such conditions as may be specified by SEBI from time to time.
In this regard, SEBI has provided that any investment made by an AIF on or after July 1, 2025 (erstwhile October 1, 2024) shall be held in dematerialised form only, irrespective of whether the investment is made directly in the investee company or is acquired from another entity.
The investments made by an AIF prior to July 1, 2025 are exempted from the requirement of being held in dematerialised form, except where: (a) investee company of the AIF has been mandated under applicable law to facilitate dematerialisation of its securities; or (b) the AIF, on its own, or along with other SEBI registered intermediaries/ entities which are mandated to hold their investments in dematerialised form, exercises control over the investee company. Such investments as mentioned in point (a) and (b) which are made prior to July 1, 2025 shall be held in dematerialised form by the AIF on or before October 31, 2025 (erstwhile January 31, 2025).
Further, the aforesaid requirement of holding investments in dematerialised form shall not be applicable to: (a) scheme of an AIF whose tenure (not including permissible extension of tenure) ends on or before October 31, 2025; and (b) scheme of an AIF which is in extended tenure as on February 14, 2025 (erstwhile January 12, 2024).
To read the circular click here
SEBI MANDATES COMPLIANCE OF INDUSTRY STANDARDS BY LISTED ENTITIES
SEBI, vide its circular dated February 14, 2025 ("RPT Circular"), circular dated February 25, 2025 ("Disclosure Circular") and circular dated February 28, 2025 ("KPI Circular") has notified mandatory compliance of industry standards that has been formulated and notified by the Industry Standards Forum ("ISF") comprising of representatives from 3 industry associations, viz. ASSOCHAM, CII and FICCI, under the aegis of the Stock Exchanges.
(a) Regulations 23(2), (3) and (4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") requires the listed entities to obtain audit committee's and shareholders' approval prior to entering into material related party transactions ("RPTs") and Parts A and B of Section III – B of the SEBI Master Circular dated November 11, 2024, specify the information to be placed before the audit committee and shareholders, respectively, for consideration of RPTs.
In order to facilitate uniform approach and assist listed entities in complying with the above-mentioned requirements, ISF has formulated industry standards, in consultation with SEBI, for minimum information to be provided for review of the audit committee and shareholders for approval of RPTs. In order to maintain uniformity, the listed entities have been mandated to provide the minimum information prescribed in the Industry Standards ("IS-1") to the audit committee and shareholders prior to obtaining their approval. The information provided in the standardized format shall be incorporated into the agenda of the Audit Committee meeting. The comments of the Audit Committee, where applicable, shall be recorded in the minutes of the meeting. For material RPTs, the information as prescribed in these standards shall be included in the Explanatory Statement to the notice sent to shareholders.
(b) ISF has also formulated industry standards, in consultation with SEBI, for effective implementation of the requirements to disclose material events or information under Regulation 30 of the LODR Regulations ("Industry Standards Note").
The Industry Standards Note is formulated for the ease of reporting and providing uniformity in disclosures under the LODR Regulations. The Industry Standards Note sets out standard operating procedures and provides a consistent approach for disclosures to be made by listed entities under Regulation 30 and Schedule III of the LODR Regulations.
(c) Further, in order to maintain uniformity in disclosure relating to Key Performance Indicators ("KPIs") in the draft offer document and offer document as per the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, SEBI has mandated compliance with the Industry Standards ("IS-2"). The IS-2 has to be complied for all draft offer documents/ offer documents to be filed with SEBI/ stock exchanges on or after April 1, 2025.
To read the RPT Circular click here, to read the IS-1 click here, to read the Disclosure Circular click here, to read the Industry Standards Note click here, to read the KPI Circular click here & to read the IS-2 click here.
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