SEBI modified market capitalization mounts for LODR compliance

SEBI modified market capitalization mounts for LODR compliance

SEBI has recently revamped the basis for calculating market capitalization of listed companies under the listing applications and disclosure regulations. SEBI has now brought a concept of average market capitalization for determining the applicability of provisions linked to m-cap for a defined period.

This direction bill directly apply on ten provisions in LODR that linked to listed entities based on market capitalization.

More information:

Some important changes/decisions under this modification are as follows:

• There is a provision to appoint an independent woman director in the boards of directors.
• Not less than 6 directors should be on the same board.
• There is a provision for board meetings, risk management committee and rumor verifications.
• The provisions are related to directors and officers insurance for all the independent directors.
• Dividend distribution policy
• Business responsibility and sustainability reports

Important changes:

In these modified norms, 31st December instead of 31st march will be taken as the cut-off date of calculating the ranking based on m-cap. The reason to introduce an average market capitalization is that a listed entity keeps fluctuating based on market scenario. This will help to accurately reflect the size of market capitalization of the listed entity as well as the ranking.

About SEBI:

Formation: established in 1988, acquired statutory status on 30th January 1992

Headquarters: Mumbai, Maharashtra

Chairperson : Madhabi Puri Buch

Parent Department: Ministry of Finance

Conclusion:

SEBI, the Securities and Exchange Board of India, plays a crucial role in regulating and supervising the securities market in India. Its importance lies in maintaining investor confidence by ensuring fair practices, transparency, and protecting the interests of investors.

Important Questions:

• Describe the history and significance of SEBI.
• What are some recent changes done by SEBI in LODR compliance?

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