- SEBI proposes replacing hard copy financial reports with web links and QR codes for issuers
- This change aims to reduce costs and prevent paper wastage for non-convertible securities holders
- Issuers must send a letter with QR code and web link to access complete annual report details
Markets regulator SEBI on Friday proposed to ease the rules for issuers of non-convertible securities by replacing the requirement of sending a hard copy of financials and annual reports to security holders with a web link and quick response code to access the same. The relaxation from sending physical copies of financials will result in cost savings and prevent paper wastage. Also, this would lead to regulatory consistency and ease of doing business.
In its consultation paper, SEBI suggested that issuers should send a letter providing the quick response code and web link, including the exact path, where complete details of the annual report are available, to holders of non-convertible securities.
The provision of a QR code is proposed to be incorporated to facilitate ease of access for the debenture holders, the regulator said.
Additionally, SEBI proposed specifying timelines for issuers having listed non-convertible securities regarding the requirements of sending a copy of financials to the debenture holders.
"Unlike entities having listed specified securities, there are issuers having listed non-convertible securities, which are not constituted under the Companies Act, 2013, and hence, the timelines specified under the Companies Act, 2013, with respect to sending of copy of financials to the debenture holders are not applicable upon them. Therefore, there is a need to specify timelines within which the issuer is required to comply with the said requirements," SEBI said.
To provide a timeline for the issuer, SEBI proposed that for listed entities, which are companies, the timelines specified under the Companies Act, 2013, should be applicable.
For listed entities, which are constituted under some other Act or statute, the relevant provisions of their parent Act or statute should be applicable. In the absence of any such provision, a timeline of 21 days in line with the provisions of the Companies Act, 2013, should be provided.
The Securities and Exchange Board of India has sought public comments till Aug. 15 on the proposals.
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