The Securities and Exchange Board of India (SEBI) has issued a draft circular proposing changes to the Master Circular governing listing obligations and disclosure requirements for entities with listed non-convertible securities, securitized debt instruments, and commercial paper. These modifications specifically impact High Value Debt Listed Entities (HVDLEs) following amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which introduced dedicated corporate governance provisions for such entities. The draft outlines new formats and timelines for HVDLEs to submit their annual secretarial compliance reports and periodic corporate governance compliance reports. It also details the required half-yearly disclosures for related party transactions (RPTs) and specifies the information that must be presented to the Audit Committee, Debenture Trustee, and shareholders for reviewing and approving RPTs. Additionally, the circular addresses the validity period for omnibus approvals of RPTs granted by shareholders. SEBI is soliciting public comments on this draft circular until May 30, 2025.
Securities and Exchange Board of India
DRAFT CIRCULAR FOR PUBLIC COMMENTS
Modification to Chapter VII of the Master Circular for listing obligations and disclosure requirements for Non-Convertible Securities, Securitized Debt Instruments and/ or Commercial Paper
May 09, 2025 | Reports : Reports for Public Comments
Click here to provide your comments
1. OBJECTIVE:
1.1. To solicit comments/ views/ suggestions from the public on the draft circular titled “Modification to Chapter VII of the Master Circular for listing obligations and disclosure requirements for Non-Convertible Securities, Securitized Debt Instruments and/ or Commercial Paper” placed at Annexure I.
2.PUBLIC COMMENTS
2.1. Public comments are invited on the draft circular annexed to this consultation paper. The comments/ suggestions should be submitted latest by May 30, 2025, through the online web-based form which can be accessed using the following link: https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do? doPublicComments=yes
2.2. The instructions to submit comments on the consultation paper are as under:
1. Before initiating the process, please read the instructions given on top left of the web form as “Instructions”.
2. Select the consultation paper you want to comment upon from the dropdown under the tab – “Consultation Paper” after entering the requisite information in the form.
3. All fields in the form are mandatory.
4. Email ID and phone number cannot be used more than once for providing comments on a particular consultation paper.
5. If you represent any organization other than the types mentioned under dropdown in “Organization Type”, please select “Others” and mention the type, which suits you best. Similarly, if you do not represent any organization, you may select “Others” and mention “Not Applicable” in the text box.
6. There will be a dropdown of Proposals in the form. Please select the proposals one- by-one and for each of the proposal, please record your level of agreement with the selected proposal. Please note that submission of agreement level is mandatory.
7. If you want to provide your comments for the selected proposal, please select
“Yes” from the dropdown under “Do you want to comment on the proposal” and use the text boxes provided for the same.
8. After recording your response to the proposal, click on “Submit” button. System will save your response to the selected proposal and prompt you to record your response for the next proposal. Please follow this procedure for all the proposals given in the dropdown.
9. If you do not want to react on any proposal, please select that proposal from the dropdown and click on “Skip this proposal” and move to the next proposal.
10. After recording your response to all the proposals, you may see your draft response to all of proposals by clicking on “Check your response before submitting” just before submitting response to the last proposal in the dropdown. A pdf copy of the response can also be downloaded from the link given in right bottom of the web page.
11. The final comments shall be submitted only after recording your response on all of the proposals in the consultation paper
2.3. In case of any technical issue in submitting your comment through the web based public comments form, you may contact the following through email with the subject: ” Modification to Chapter VII of the Master Circular for listing obligations and disclosure requirements for Non-Convertible Securities, Securitized Debt Instruments and/ or Commercial Paper.”
a. Rohit Dubey, GM(rohitd@sebi.gov.in)
b. Kiran Dhembre (Ms.), Mgr(kirand@sebi.gov.in)
Issued on: May 09, 2025
ANNEXURE-I
DRAFT CIRCULAR
SEBI/HO/DDHS/DDHS-PoD-1/P/CIR/2025/
XXX 2025
To,
Issuers of listed non-convertible debt securities;
Recognised Stock Exchanges;
Registered Depositories
Madam/ Sir,
Subject: Modification to Chapter VII of the Master Circular for listing obligations and disclosure requirements for Non-Convertible Securities, Securitized Debt Instruments and/ or Commercial Paper
1. Chapter VII of the Master Circular for listing obligations and disclosure requirements for Non-Convertible Securities, Securitized Debt Instruments and/ or Commercial Paper dated May 21, 2024 specifies formats for disclosure of corporate governance norms by High Value Debt Listed entities (HVDLEs).
2. Pursuant to notification of amendment to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) dated March 27, 2025, the corporate governance provisions exclusively for HVDLEs are now specified in Chapter VA of the LODR Regulation.
3. Regulation 62M (2) of aforesaid Chapter VA stipulates that a HVDLE shall submit a secretarial compliance report in such form as specified by the Board, to stock exchanges, within sixty days from end of each financial year.
4. Regulation 62Q stipulates that a HVDLE shall submit a periodic compliance report on corporate governance in the format as specified by the Board from time to time to the recognized stock exchange(s) within twenty-one days from the end of the period along with details of all material transactions with related parties.
5. Regulation 62K(9) of the aforesaid Chapter VA inter-alia requires listed entities to disclose Related Party Transactions (RPTs), on a half-yearly basis, in the format specified by the Board and within the timelines specified in the regulations.
6. Accordingly, the submission of the aforesaid reports shall be as under:
A. Annexure A – Format of Annual secretarial compliance Report
B. Annexure B – Periodic Compliance report (Part I to IV)
i. Part I: on quarterly basis
ii. Part II: at the end of the financial year
iii. Part III: at the end of 6 months from the close of financial year
iv. Part IV: on a half yearly basis
C. Annexure C – Format of disclosure of related party transactions
7. In relation to the disclosure and obligations of HVDLEs in relation to RPT, it has been decided to specify the information to be placed before the audit committee, Debenture Trustee and the shareholders for consideration of RPTs. The same is detailed in the following paragraphs.
A. Information to be reviewed by the Audit Committee for approval of RPTs and by Debenture Trustee for providing No-objection certificate for RPTs:
a. Type, material terms and particulars of the proposed transaction;
b. Name of the related party and its relationship with the listed entity or its subsidiary, including nature of its concern or interest (financial or otherwise);
c. Tenure of the proposed transaction (particular tenure shall be specified);
d. Value of the proposed transaction;
e. The percentage of the listed entity’s annual consolidated turnover, for the immediately preceding financial year, that is represented by the value of the proposed transaction (and for a RPT involving a subsidiary, such percentage calculated on the basis of the subsidiary’s annual turnover on a standalone basis shall be additionally provided);
f. If the transaction relates to any loans, inter-corporate deposits, advances or investments made or given by the listed entity or its subsidiary:
i. details of the source of funds in connection with the proposed transaction;
ii. where any financial indebtedness is incurred to make or give loans, interoperate deposits, advances or investments,
iii. applicable terms, including covenants, tenure, interest rate and repayment schedule, whether secured or unsecured; if secured, the nature of security; and
iv. the purpose for which the funds will be utilized by the ultimate beneficiary of such funds pursuant to the RPT.
g. Justification as to why the RPT is in the interest of the listed entity;
h. A copy of the valuation or other external party report, if any such report has been relied upon;
i. Percentage of the counter-party’s annual consolidated turnover that is represented by the value of the proposed RPT on a voluntary basis;
j. Any other information that may be relevant.
B. The audit committee shall also review the status of long-term (more than one year) or recurring RPTs on an annual basis. Further, an RPT for which the audit committee has granted omnibus approval shall continue to be placed before the shareholders if it is material in terms of Regulation 62K(1) of the LODR Regulations.
C. Information to be provided to shareholders for consideration of RPTs: The notice being sent to the shareholders seeking approval for any proposed RPT shall, in addition to the requirements under the Companies Act, 2013, include the following information as a part of the explanatory statement:
a. A summary of the information provided by the management of the listed entity to the audit committee as specified in paragraph 7A above;
b. Justification for why the proposed transaction is in the interest of the listed entity;
c. Where the transaction relates to any loans, inter-corporate deposits, advances or investments made or given by the listed entity or its subsidiary, the details specified under para 7A(f) above; (The requirement of disclosing source of funds and cost of funds shall not be applicable to listed banks/Non-Banking Financial Companies.)
D. The explanatory statement contained in the notice sent to the shareholders for seeking approval for an RPT shall provide relevant information so as to enable the shareholders to take a view whether the terms and conditions of the proposed RPT are not unfavorable to the listed entity, compared to the terms and conditions, had similar transaction been entered into between two unrelated parties. The information so provided shall include but not be limited to the information specified above.
E. Transparency, accountability and shareholder empowerment are the bedrock of robust corporate governance, therefore listed entities shall ensure compliance with the spirit of the law and endeavor to provide relevant and detailed information to the shareholders in order to enable and empower the latter for taking an informed decision.
F. Validity of omnibus approval for RPTs granted by shareholders
a. Regulation 62K(4)(e) of Chapter VA specifies that omnibus approval granted by the audit committee shall be valid for a period not exceeding one year Regulation 62K(5) and (6) of the said Chapter requires No-objection from Debenture Trustee and shareholder approval for material RPTs respectively.
b. Section 96(1) of the Companies Act, 2013 specifies that the time
gap between two Annual General Meetings (AGMs) cannot be more than fifteen months. In order to align the processes to conduct AGMs for HVDLEs which are companies, it is hereby specified that the shareholders’ approval of omnibus RPTs approved in an AGM shall be valid up to the date of the next AGM for a period not exceeding fifteen months. In case of omnibus approvals for material RPTs, obtained from shareholders in general meetings other than AGMs, the validity of such omnibus approvals shall not exceed one year.
8. This Circular shall come into force with immediate effect
9. Stock Exchanges are advised to bring the provisions of this circular to the notice of all entities with listed non-convertible securities and disseminate on their websites.
10. The Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 101 of the SEBI LODR Regulations to protect the interest of investors in securities and to promote the development of, and to regulate the securities market.
11. This Circular is available atsebi.gov.in under the link “Legal à Circulars”.
Yours faithfully,
XXXX
Annexure – A
Format of Annual secretarial compliance Report
Secretarial compliance report of [●] [Name of the HVDLE] for the year ended
{On the letter head of the Practicing Company Secretary (PCS)}
I/We have examined:
a. all the documents and records made available to us and explanation provided by [●] [Name of the HVDLE] (“the HVDLE”),
b. the filings/ submissions made by the HVDLE to the stock exchanges, (c) website of the HVDLE,
c. any other document/ filing, as may be relevant, which has been relied upon to make this certification,
for the year ended [●] (“Review Period”) in respect of compliance with the provisions of:
a. the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the Regulations, circulars, guidelines issued thereunder; and
b. the Securities Contracts (Regulation) Act, 1956 (“SCRA”), rules made thereunder and the Regulations, circulars, guidelines issued thereunder by the Securities and Exchange Board of India (“SEBI”);
The specific Regulations47, whose provisions and the circulars/ guidelines issued thereunder, have been examined, include:
a. Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
b. Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
c. Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
d. Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;
e. Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
f. Securities and Exchange Board of India (Issue and Listing of Non-convertible Securities) Regulations, 2021;
g. Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
h. (other regulations as applicable) and circulars/ guidelines issued thereunder;
And based on the above examination, I/ we hereby report that, during the Review Period:
(a) The HVDLE has complied with the provisions of the above Regulations and circulars/ guidelines issued thereunder, except in respect of matters specified below:
| Sl. No. | Compliance Requirement (Regulations/ circulars/ guidelines including specific clause) | Deviations | Observations/ Remarks of the Practicing Company Secretary |
b. The HVDLE has maintained proper records under the provisions of the above Regulations and circulars/ guidelines issued thereunder insofar as it appears from my/our examination of those records.
c. The following are the details of actions taken against the HVDLE/ its promoters/ directors/ material subsidiaries either by SEBI or by Stock Exchanges (including under the Standard Operating Procedures issued by SEBI through various circulars) under the aforesaid Acts/ Regulations and circulars/ guidelines issued thereunder:
| Sl. No. | Action taken by | Details of violation | Details of action taken e.g. fines, warning letter, debarment, etc. | Observations/ remarks of the Practicing Company Secretary, if any. |
d. The HVDLE has taken the following actions to comply with the observations made in previous reports:
| Sl. No.
| Observations of the Practicing Company Secretary in the previous reports
| Observations made in the secretarial compliance report for the year ended… (The years are to be mentioned) | Actions taken by the HVDLE, if any
| Comments of the Practicing Company Secretary on the actions taken by the HVDLE
|
Notes:
1. Provide the list of all the observations in the report for the previous year along with the actions taken by the HVDLE on those observations.
2. Add the list of all observations in the reports pertaining to the periods prior to the previous year in case the entity has not taken sufficient steps to address the concerns raised/ observations.
E.g. In the report for the year ended 31st Mar, 2021, the PCS shall provide a list of:
Place:
Signature:
Date:
Name of the Practicing Company Secretary
ACS/ FCS No.:
C P No.:
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