SEBI issued an approach paper on Draft SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2014 on 5 May, 2014. These regulations will be applicable to companies whose securities are listed on any recognized stock exchange in India. The purpose behind the draft regulations is to have a single and all-encompassing framework providing listing conditions and disclosure requirements for listed issuers and issuers desirous of listing various categories of securities. The draft regulations consists of existing provisions of the listing agreements and relevant provisions of Companies Act, 2013 in relation to listing conditions and disclosure requirements.

SEBI by way of the proposed regulations seeks to address the issue of rampant non-compliance of the listing agreement by issuers whose securities are listed on various stock exchanges. The draft regulations are aimed towards enhancing the enforceability of existing provisions of the listing agreement by substituting contractual obligations of issuers under listing agreement with statutory obligations under the draft regulations. SEBI, in a way proposes to consolidate its powers to regulate listed issuers to the extent such powers were delegated to stock exchanges under the listing agreements.

While globally there is a move towards regulating and enforcing securities law through market intermediaries, SROs and stock exchanges, the draft regulations may be a step back in regulating listed entities. The objective of SEBI to ensure strict compliance with listing conditions may be laudable, however it should not come at the cost of efficiency of the market.

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Date:September 28, 2015