Securities and Exchange Board of India (SEBI) has released a draft circular on April 21, 2025, proposing a limited relaxation from compliance with Regulation 58(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations). SEBI is seeking public feedback on this proposal, offering stakeholders a chance to weigh in on this potential policy shift.
What’s the Circular About?
At the heart of the draft circular lies the requirement under Regulation 58(1)(b) of the LODR Regulations, which mandates that listed entities must send hard copies of financial statements and other relevant documents to holders of non-convertible securities who haven’t registered their email addresses. This regulation aligns with Section 136 of the Companies Act, 2013, emphasizing investor access to essential company information.
However, following the Ministry of Corporate Affairs’ (MCA) relaxation via General Circular No. 09/2024, SEBI proposes to extend a similar exemption. This means issuers would not be penalized for failing to send physical copies for AGMs conducted till September 30, 2025, provided they meet specific disclosure criteria.
Who Does This Affect?
The proposed relaxation is applicable to entities with listed non-convertible debt securities, particularly those that:
Have complied with MCA’s circulars on the matter.
Have not sent hard copies to investors lacking registered email addresses.
Ensure that salient financial details are accessible online.
Key Highlights of the Draft Circular
No penal action for non-compliance with Regulation 58(1)(b) for the period from October 1, 2024, to a date yet to be finalized, provided MCA circular guidelines are followed. From the end of that period until September 30, 2025, further exemption is allowed if the issuer includes a web link in the newspaper advertisement (as per Regulation 52(8)) directing holders to view the key financial documents online.
This move is clearly aimed at reducing compliance burden, especially when digital dissemination is more accessible and sustainable.
How to Submit Your Comments
SEBI is inviting public comments on the proposed circular until May 12, 2025, via an online form on its official website. Participants are required to:
Select the appropriate consultation paper.
Rate their level of agreement with each proposal.
Optionally provide detailed comments.
Submit a response for each proposal listed.
Instructions and a preview option are provided to help ensure complete submissions. If you encounter technical difficulties, SEBI officials Rohit Dubey and Ms. Kiran Dhembre are available for assistance via email.
Why This Matters
This draft circular reflects SEBI’s recognition of changing investor behavior and technological progress, where most stakeholders now prefer accessing documents digitally. It’s also a step toward environmental sustainability by reducing unnecessary paper usage.
While physical delivery remains crucial for certain investor segments, SEBI’s move tries to balance regulatory compliance with practical convenience, especially for companies with large debt-holder bases.
