SEBI Listing Update: Separation of role of Chairperson and MD/CEO to be 'Voluntary'

✓ SEBI, via it's press release dated February 15, 2022, made separation of role of Chairperson and MD/CEO Voluntary.

✓ Background:

- Earlier, the SEBI Board, in its meeting of March 2018 based on the recommendations made by the Kotak Committee, had approved the proposals relating to separation of the role of Chairperson and MD/CEO of listed companies.

- Basis of the above, SEBI (Listing Regulations) were amended in May 2018 mandating, with effect from April 1, 2020,  top 500 listed entities to ensure that the Chairperson of the board shall –

a. be a non-executive director;

b. not be related to the Managing Director or the Chief Executive Officer 

(as per the definition of the term “relative” defined under the Companies Act, 2013.)

- Thereafter, considering difficulties highlighted by the industry representatives, the deadline for compliance was extended by two years in January 2020. As things stand now, the provision for mandating Separation of the role of Chairperson and MD/CEO of listed companies willbe applicable from April 01, 2022 for top 500 Companies.

- As the revised deadline is less than two months away, on a review of the compliance status it is seen that the compliance level, which stood at 50.4% amongst the top 500 Listed Companies has progressed to only 54% as on December 31, 2021. Hence, expecting the remaining about 46% of the top 500 listed companies to comply with these norms by the target date would be a tall order.

- As a way forward, SEBI Board at this juncture, decided that this provision may not be retained as a mandatory requirement and instead be made applicable to the listed entities on a "Voluntary" basis.

- To read SEBI Press Release, please click here

Company Law Update: Report on Corporate Social Responsibility (CSR) in e-form CSR-2

✓ Ministry of Corporate Affairs (MCA) vide notifications dated 11.02.2022 mandated  companies covered in Sec 135(1) of the Companies Act, 2013 to file Report on CSR in e-form CSR with Registrar.

✓ Timeline:

- For filing of CSR-2 for FY 2021-22 shall be March 31, 2022.

- From FY 2022-23 onwards, it shall be filed as an addendum to Form AOC 4, AOC 4 CFS or AOC 4 XBRL as the case may be.

✓ To read MCA notification, please

click here

LLP Update: An easy and efficient way of statutory filings

MCA will launch a new way of e-filing for LLP on MCA21 portal w.e.f. 06.03.2022.

✓ All LLP filings going forward will be web based. 

✓ LLP e-Filings on MCA21 portal will be disabled from 25th Feb 2022 12:00 AM. so kindly ensure that there are no SRNs in pending payment status. 

✓ Offline payments for LLP using Bank Challan and Pay later option would be stopped from 19th Feb 2022 

✓ During 19th Feb 2022 12:00 AM to 25th Feb 2022 12:00 AM, payments for LLP will be accepted only through online mode (Credit/Debit Card and Net Banking). 

✓ DSC association and new user registration on MCA21 portal will be stopped on 25th Feb 2022 12:00 AM. 

Courtsey: www.mca.gov.in

SEBI Update: Clarification regarding Scheme of Arrangements

∆ Schemes of Arrangement by Listed Entities:

✓ SEBI vide it's circular dated February 01, 2022 clarified (to its vide Circular dated November 18, 2021, read with Master dated December 22, 2020) that, in respect of the No Objection Certificate (NOC) as required to obtain as per above circular ms, Part I Para A 2(k) of the circular shall read as follows:

- No Objection Certificate (NOC) from the lending scheduled commercial banks/ financial institutions/ debenture trustees, from not less than 75% of the secured creditors in value. 

✓ This circular shall be applicable for all the schemes filed with the stock exchanges after Nov. 16, 2020.