The Securities and Exchange Board of India (Sebi) has formed an advisory council to help streamline the laws governing listing responsibilities and disclosure. The expert committee will be chaired by R Gandhi, a former deputy governor of the Reserve Bank of India. The 22-member group, which was constituted on August 28, will advise Sebi on corporate governance, listingand post-listing obligations, and disclosure standards.
Other committee members include NK Dua (MCA joint director), Keki Mistry (HDFC Bank non-executive director), stock exchange executives, proxy advisory firm managing directors, and representatives from industry associations, corporations, and legal experts.
In June, Sebi suggested 50 modifications to simplify disclosure and listing requirements, based on recommendations from another expert committee. This was a 21-person committee led by SK Mohanty, a former Sebi full-time member.
The Mohanty committee delivered a 200-page report outlining revisions to related party transactions, promoter reclassification, director appointments, IPO eligibility, and disclosure timelines. These recommendations seek to close gaps and address overlaps in the Sebi's Listing Obligations and Disclosure Requirements (LODR) and Issue of Capital and Disclosure Requirements (ICDR) regulations.
These two regulations are critical to maintaining corporate governance and avoiding information asymmetry. According to sources, Sebi will likely consider the Mohanty committee's suggestions at its next board meeting, which is slated for the last week of the month.
The expert committee advocated extending the promoter lock-in period if money raised through an IPO were used to repay loans utilized for capital expenditure. It also proposed raising the time limit for disclosing lawsuits or disputes from 24 hours to 72 hours. The regulator has also requested increased disclosure of pre-IPO transactions.
