SEBI Compliance

# SEBI (LODR), SAST, and PIT Regulations Explained

## SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) form the core framework governing listed companies in India, replacing prior listing agreements to ensure transparency, accountability, and investor protection. These regulations apply to entities listing specified securities like equity shares, non-convertible debt, or preference shares on recognized stock exchanges.

### Applicability

LODR covers all listed entities with designated securities on recognized stock exchanges, including equity/convertible securities on main board, SME exchange, or institutional trading platforms; non-convertible debt securities; non-convertible redeemable preference shares; Indian depository receipts; securitized debt instruments; and mutual fund units.

Obligations are categorized by security type, common to all, specific to equity-listed, debt-listed, or combined.

Certain Exemptions are provided to companies having paid-up capital not more than ₹10 crore and net worth not more ₹25 crore or SME exchange listings for certain governance norms. Listed companies with paid-up capital not more than ₹10 crore and net worth not more ₹25 crore are given exemptions from the Corporate Governance provisions of the LODR including the related party transactions approval.

### Common Obligations (Chapter III)

All listed entities must appoint a qualified Company Secretary as the compliance officer, file disclosures electronically, maintain a functional website with policies, and ensure timely share transfers via registrars. They handle investor grievances, record board meetings, and adhere to a code of conduct for directors/senior management.

### Obligations for Equity-Listed Entities (Chapter IV)

Top 2000 listed entities on the basis of market cap should have minimum 6 directors, at least one independent woman director (top 1000), and board quorum of 1/3rd or 3 directors including one independent director. Mandatory committees include Audit (majority independent, 4 meetings/year), Nomination & Remuneration (half independent), Stakeholders Relationship (one independent), and Risk Management (for top 500 by market cap).

Vigil mechanism and related party transaction approvals are required, with materiality thresholds tightened for SMEs in 2025.

### Key Disclosure Requirements

Regulation | Compliance Item | Timeline | Key Details
--- | --- | --- | ---
Reg 13(3) | Investor Complaints Statement | Within 21 days | (Integrated Filing), Details pending/disposed complaints,
Reg 27(2) | Corporate Governance Report | Within 21 days (Integrated filing) | Covers composition, meetings, attendance.
Reg 31(1) | Shareholding Pattern | Within 21 days, (Xbrl Filing) | promoter/public/promoter group holdings as on quarter-end.
Reg 33 | Standalone/Consolidated Financial Results | Within 45 days (60 days for 4/annual) | (Integrated Filing), Unaudited (limited review) or audited, board-approved.
Reg 32(1) | Funds Deviation/Variation Statement | With financial results | For preferential issues/rights/QIP; if applicable.
Reg 76, Depository Regs | Share Capital Reconciliation Audit | Within 30 days | PCS certificate on total shares, demat status vs CDSL/NSDL.

### Event-Based (Reg 30, Schedule III)

Every listed entity shall make disclosures of any events or information which, in the opinion of the board of directors of the listed company, is material, like:

SEBI (LODR) Regulations, 2015, Part A, Paragraph A of Schedule III outlines events for mandatory disclosure to stock exchanges under Regulation 30, which are deemed to be material as:

- Acquisition/disposal of assets, subsidiaries, or shares exceeding 5% stake.
- Agreements like shareholders, joint ventures impacting control/liability.
- Fraud/defaults by promoters/key managerial personnel (KMP).
- Change in directors/KMP, auditors, or compliance officer.
- Outcome of board meetings (within 30 minutes), financial results, or ESOP allotments.
- Cancellation of debt or one-time settlements.
- Re-issuance of forfeited shares or capital structure changes.
- Mergers/amalgamations, demergers, or spin-offs.
- Initiation/completion of forensic audit, including details and reports.
- Material bank account freezes/unfreezes.

Every listed entity shall make disclosures of any events or information which, in the opinion of the board of directors of the listed company, as detailed in Para B of Part A of Schedule III, like:

- Commencement/shift in business.
- Capacity addition, product launches, or market expansions.
- Awards/recognitions, litigation outcomes, or regulatory actions.
- Disruption of operations, delay in projects, or labor issues.
- Material fraud/irregularities or environmental pollution events.
- Transactions with related parties exceeding thresholds.
- Giving/issuing guarantees or indemnities.
- Loss of key licenses or market share changes.

; Part B applies to non-convertible securities under Regulation 51(2).

Disclosure of information having bearing on performance/operation of listed entity and/or price sensitive information( Non-Convertible Securities): Part B Events

- Default in interest/dividend payments.
- Delay in debt redemption or credit rating changes.
- Changes in capital structure or encumbrance creation.
- Issuance of securities or refinancing details.
- Litigation materially affecting debt servicing.
- Any info bearing on operations or security payments.

### Submission of Annual Report of the Company to Exchanges:

Under SEBI (LODR) Regulations, 2015, listed entities must submit their annual report to stock exchanges as a key compliance step. This ensures timely dissemination of financial and governance information to investors.

For equity-listed entities (Regulation 34), submit a copy of the annual report to the stock exchange(s) along with the notice of the annual general meeting (AGM), not later than the commencement of dispatch to shareholders. If changes occur post-AGM, submit the revised copy with explanations within 48 hours of the AGM.

For debt-listed entities (Regulation 53), submit the annual report to the stock exchange and debenture trustee on or before the date of dispatch to shareholders, revisions follow the same 48-hour rule post-AGM. It must also be published on the company's website simultaneously.

## SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations) govern acquisitions of shares, voting rights, or control in listed companies to ensure transparency, protect minority shareholders, and prevent hostile takeovers.

It applies to direct and indirect acquisition of shares, voting rights, or control over a listed “target company”, including acquisitions through subsidiaries, joint ventures, or persons acting in concert. These regulations mandate specific event-based and continuous disclosures by promoters, acquirers, and the target company.

### Overview

SAST Regulations apply to direct/indirect acquisitions exceeding thresholds like 5% voting rights or control changes in listed companies. Key thresholds include 25% for mandatory open offers, with creeping acquisitions allowed up to 5% annually beyond that. Open offer also hit if in case of Acquisition of control, even if it below 25% shareholding, if the acquirer obtains management or policymaking control.

### Event-Based Compliances

Event-based disclosures trigger on specific acquisitions or disposals. Under Regulation 29(1), acquirers must disclose intent to acquire more than 5% shares/voting rights to the target and stock exchanges within 2 working days. For acquisitions/disposals crossing 5% thresholds (e.g., 5-10%, 10-15%), Regulation 29(2) requires detailed filings within 2 working days of the trade date, including pre/post holdings.

A promoter/nonpromoter can incrementally acquire up to 5% in a financial year without triggering a fresh open offer, within the 25–75% band.

### Regular/Continuous Compliances

Promoters/promoter groups file annual disclosures under Regulation 30 by January 21 for holdings/encumbrances as of December 31. Target companies disclose promoter encumbrances under Regulation 31 half-yearly (April 21 and October 21). These ensure ongoing transparency, with some automated via SEBI's SDD portal since 2020.

### Disclosure Thresholds Table

Threshold (Voting Rights) | Discloser | Regulation | Timeline
--- | --- | --- | ---
Greater than 5% acquisition intent | Acquirer | 29(1) | 2 working days
Crossing 5%/10% | Acquirer | 29(2) | 2 working days
Annual holdings | Promoters | 30 | 07th April
Encumbrance changes | Promoters/Target | 31 | Half-yearly

## SEBI (Prohibition of Insider Trading) Regulations, 2015,

### Objective

SEBI (Prohibition of Insider Trading) Regulations, 2015, aim to prohibit insider trading in securities and protect investors by ensuring that unpublished pricesensitive information (UPSI) is not misused for trading or communicating unfair advantage. They apply to dealings in securities of listed companies, including equity, debt, and their derivatives, traded on recognized stock exchanges in India.

Under SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations), connected persons face strict prohibitions to prevent misuse of Unpublished Price Sensitive Information (UPSI). Connected persons or any person in possession of or having access to unpublished price sensitive information, such as directors, employees, or those associated with the company who likely have UPSI access cannot trade in the company's securities while in possession of UPSI.

### Key Restrictions

No insider shall communicate, provide, or allow access to any unpublished price sensitive information, relating to a company or securities listed or proposed to be listed, to any person including other insiders except where such communication is in furtherance of legitimate purposes, performance of duties or discharge of legal obligations.

No insider shall trade in securities that are listed or proposed to be listed on a stock exchange when in possession of unpublished price sensitive information. They must observe closed trading windows (e.g., 30 days before financial results) and seek pre-clearance for trades.

Recent amendments (2024-2025) expanded "connected persons" to include relatives and household sharers, with a rebuttable presumption of UPSI access shifting the proof burden to them.

### Compliance Duties:

Under SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations), every listed company and intermediary handling Unpublished Price Sensitive Information (UPSI) must maintain a Structured Digital Database (SDD).

### Purpose and Contents

The SDD tracks all UPSI sharing, recording the name, PAN (or other identifier), nature of UPSI, sharing date, and recipient details for both internal and external communications. It ensures audit trails to detect insider trading and non-tampering.

### Maintenance Requirements

The board or head of the organization bears primary responsibility, delegating to the compliance officer while retaining oversight; it must be hosted internally without outsourcing. Records are preserved for at least 8 years post-transaction or until SEBI proceedings conclude, with time-stamping and access controls.

### Compliance Certification

Stock exchanges require quarterly and annual certifications by the compliance officer or a practicing company secretary, confirming tamper-proof status and proper entries, now integrated into secretarial compliance reports. Non-compliance risks penalties under PIT Regulations.

Compliance under SEBI (Prohibition of Insider Trading) Regulations,2015 by listed entities can be classified into 4 parts as follows

### 1. Annual Compliance

Item | Regulation / Source | Frequency | Due date / timing
--- | --- | --- | ---
Finalize and adopt Code of Conduct under SEBI PIT Regulations [Schedule B] | PIT Reg. 9 & Schedule B | Annual | Before start of each financial year (first board meeting)
Board affirmation of compliance with Code of Conduct | PIT Reg. 26(3) | Annual | At or before the first Board Meeting in the financial year
Compliance Officer’s report on trading by designated persons to Board | PIT Reg. 9, Schedule B | Quarterly | Within 7 trading days of quarterend
Verification and confirmation of trading records by compliance officer | PIT Reg. 9, Schedule B | Ongoing | At least quarterly, as per internal code

### 2. Tradingwindow and preclearance schedule

Item | Regulation / Source | Timing / frequency
--- | --- | ---
Trading window closure around result declarations | PIT Reg. 9, Schedule B | Trading restriction period shall be made applicable from the end of every quarter till 48 hours after the declaration of financial results.
Preclearance for trades by Designated Persons | Code of Conduct (Schedule B) | At least 17 trading days before trade, as per company policy (not exceeding 7 trading days)
Reporting of executed trades by Designated Persons to company | Code of Conduct (Schedule B) | Within 2 trading days of execution

### 3. Disclosure and reporting obligations:

Item | Regulation / Source | Frequency | Due date / timing
--- | --- | --- | ---
Maintain UPSI / “insider list” | PIT Reg. 7, 9 | Ongoing | As & when UPSI is generated; reviewed periodically by Board / Compliance Officer
Disclosure of trading by Designated Persons above specified value to SEBI | PIT Reg. 7(3) | When applicable | Within prescribed timelines (e.g., 2days or as specified in company code)
Reporting of violations of Code of Conduct to SEBI | SEBI Circulars on PIT | When detected | Within timelines notified by SEBI (currently 7 days from detection)

### 4. Internal control and review schedule:

Item | Responsibility | Frequency
--- | --- | ---
Training on PIT Regulations for directors, employees, PACs, intermediaries | Internal policy | At least annually, and at induction for new employees / DP’s
Internal audit / review of PIT compliance process | Internal / statutory auditor / company secretary | At least quarterly or as per internal control policy
Board review of Code of Conduct and PITrelated incidents | Board of Directors | At least halfyearly or as per policy