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Latest from the Regulator - October 2024
Timelines for disclosures by Social Enterprises on Social Stock Exchange
SEBI, through its circular dated May 27, 2024, had prescribed deadlines for annual disclosures under Regulation 91C(1) and the annual impact report under Regulation 91E(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations") for Social Enterprises listed on the Social Stock Exchange for FY 2023-24. In partial modification of this circular, the deadline for both the annual disclosures under Regulation 91C(1) and the annual impact report under Regulation 91E(1) has been extended to January 31, 2025.
SEBI Releases Consultation Paper on Allowing Demat Accounts for Association of Persons (AOPs)
The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing the opening of demat accounts in the name of Associations of Persons (AOPs) for holding certain securities in dematerialized form.
Under current regulations, entities such as partnership firms, unregistered trusts, and AOPs cannot hold shares in a company unless they are recognized as separate legal entities. While these entities are not allowed to become members of a company, their ability to hold other financial assets, such as corporate bonds, government securities (G-Secs), and mutual fund units, which are also held in demat form, remains unclear.
SEBI's proposal aims to address this ambiguity by allowing AOPs to hold securities (other than equity shares) in their own name through a Beneficiary Owner (BO) account. The proposal specifies that the Permanent Account Number (PAN) of the AOP must be submitted, and Depository Participants will be required to confirm that the statutes governing the AOP permit it to hold such securities. The demat account will be restricted to holding only those securities that the AOP is permitted to hold and cannot be used for subscribing to or holding equity shares.
Stakeholders are invited to provide their comments on the proposal, which could significantly clarify the rules surrounding the financial asset holdings of AOPs in India.
SEBI Directs Regulated Entities to Sever Ties with Finfluencers within Three Months
Market regulator, Securities and Exchange Board of India (SEBI) has asked all regulated entities, including recognised stock exchanges, clearing corporations and depositories and their agents, to terminate their existing contracts with unregistered financial advisors or 'finfluencers' within three months. Individuals regulated by the Board including recognized stock exchanges, clearing corporations, and depositories-and their agents must not have any direct or indirect association with anyone who:
i. Provides advice or recommendations related to a security or securities, unless they are registered with or otherwise authorized by the Board to do so; or
ii. Makes any claims about returns or performance, whether express or implied, concerning a security or securities, unless they have been permitted by the Board to make such claims.
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Institute of Directors India
Bringing a Silent Revolution through the Boardroom
Institute of Directors (IOD) is an apex national association of Corporate Directors under the India's 'Societies Registration Act XXI of 1860'. Currently it is associated with over 30,000 senior executives from Govt, PSU and Private organizations of India and abroad.
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Disclaimer: The opinions expressed in the articles/ stories are the personal opinions of the author. IOD/ Editor is not responsible for the accuracy, completeness, suitability, or validity of any information in those articles. The information, facts or opinions expressed in the articles/ speeches do not reflect the views of IOD/ Editor and IOD/ Editor does not assume any responsibility or liability for the same.
