EXECUTIVE PROGRAMME
(NEW SYLLABUS)
UPDATES FOR
SECURITIES LAWS AND CAPITAL
MARKETS
(Relevant for students appearing in December, 2018
Examination)
MODULE 2- PAPER 6
Disclaimer-
This document has been prepared purely for academic purposes only and it does not
necessarily reflect the views of ICSI. Any person wishing to act on the basis of this document
should do so only after cross checking with the original source.
Students appearing in December 2018 Examination shall note the following:
Students are also required to update themselves on all the relevant Notifications,
Circulars, Clarifications, etc. issued by the SEBI, RBI & Central Government on or
before six months prior to the date of the examination.
These Updates are to facilitate the students to acquaint themselves with the
amendments in securities laws upto June, 2018, applicable for December, 2018
Examination. The students are advised to read the updated Study Material (April 2018
Edition) along with these Updates.
In the event of any doubt, students may write to the Institute for clarifications at
academics@[Link]
SUPPLEMENT FOR SECURITIES LAWS AND CAPITAL MARKETS
TABLE OF CONTENT
NOTIFICATIONS AND CIRCULARS ISSUED DURING
(April 01,2018– June 30, 2018)
Sl. No. Topic Page No. Reference Lesson No.
of Study Material
PART I- SECURITIES LAWS
1. AN OVERVIEW OF SEBI 1 5
(LISTING OBLIGATIONS AND
DISCLOSURE
REQUIREMENTS)
REGULATIONS, 2015
2. AN OVERVIEW OF SEBI 4 6
(SUBSTANTIAL ACQUISITION
OF SHARES AND
TAKEOVERS) REGULATIONS,
2011
3. SEBI (DELISTING OF EQUITY 5 8
SHARES) REGULATIONS, 2009
4. SEBI (PROHIBITION OF 6 11
INSIDER TRADING)
REGULATIONS, 2015
PART II- CAPITAL MARKET & INTERMEDIARIES
5. SECURITIES MARKET 7 16
INTERMEDIARIES
LESSON 5
AN OVERVIEW OF SEBI (LISTING OBLIGATIONS AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2015
Page No. 108
Event Based Compliances
Add the following at the end of the first table after the last row i.e after 45(3)
39(3) Loss of share certificates and issue of the Within two days of
duplicate certificates getting information
46 The listed entity shall maintain a
functional website containing the basic
information about the listed entity
CORPORATE GOVERNANCE UNDER SEBI (LODR) REGULATIONS, 2015
Replace the table with the following
Sl. No. Particulars Listing Regulation
1. Related Party Clause 2(zb)
2. Board Composition 17(1)
3. Appointment of Woman Director 17(1)(a)
4. Size of the Board 17(1)(a)
5. Maximum number of directorships 17A
6. Succession planning 17(4)
7. Code of Conduct of Board of Directors & 17(5)
Senior Management
8. Prohibited Stock options for IDs 17(6)(d)
9. Performance evaluation of IDs 17 (10)
10. Constitution of Audit Committee 18
11. Constitution of Nomination & 19
Remuneration Committee
12. Stakeholders Relationship Committee 20
13. Risk management 21
14. Vigil mechanism 22
15. Secretarial Audit 24A
16. Maximum No. of directorship of IDs. 25(1)
17. Maximum tenure of IDs 25(2)
18. Separate meeting of IDs 25(3)
19. Liability of IDs 25(5)
20. Filing of Casual Vacancy of IDs 25(6)
21. Familiarisation Programme for 25(7)
Independent Director
1
22. Disclosure of RPTs 27(2) (a)
23. Disclosure of different Accounting 34 (3)
standard
24. Disclosure on Remuneration 34 (3)
Page No. 110
Related Party Definitions under different laws
Under Listing Regulations, 2015- The following proviso shall be inserted after the
definition
Provided that any person or entity belonging to the promoter or promoter group of the
listed entity and holding 20% or more of shareholding in the listed entity shall be
deemed to be a related party.
Policy on materiality of related party transactions
The words “including clear threshold limits duly approved by the board of directors and
such policy shall be reviewed by the board of directors at least once every three years
and updated accordingly” shall be inserted after the words “related party transactions”
and before the symbol “:”
When will a transaction with a related party be material?
Insert the following after the first para-
Notwithstanding the above, a transaction involving payments made to a related party
with respect to brand usage or royalty shall be considered material if the transaction(s)
to be entered into individually or taken together with previous transactions during a
financial year, exceed two percent of the annual consolidated turnover of the listed
entity as per the last audited financial statements of the listed entity.
Page No. 111
Approval of the shareholders
The words “the related parties shall abstain from voting on” shall be substituted with
the words “no related party shall vote to approve”.
Other provisions
Bullet point 2
The words “abstain from voting” shall be substituted with the words “not vote to
approve the relevant transaction.
Add bullet point 4
The listed entity shall submit within 30 days from the date of publication of its
standalone and consolidated financial results for the half year, disclosures of related
2
party transactions on a consolidated basis, in the format specified in the relevant
accounting standards for annual results to the stock exchanges and publish the same on
its website.
ROLE OF COMPANY SECRETARY
After the bullet point insert the following:
The listed entity shall submit a compliance certificate to the exchange, duly
signed by both the compliance officer of the listed entity and the authorised
representative of the share transfer agent, wherever applicable, within one month
of end of each half of the financial year, certifying that all activities in relation
to both physical and electronic share transfer facility are maintained either in
house or by Registrar to an issue and share transfer agent registered with SEBI.
“Senior Management” shall mean Officers/Personnel of the listed entity who are
members of its core management team excluding Board of directors and
normally this shall comprise all members of management one level below Chief
Executive Officer/ Managing Director/ Whole Time Director/ Manager
(including Chief Executive Officer/Manager, in case they are not part of the
board) and shall specifically include Company Secretary and Chief Financial
Officer.
SEBI (LODR) Regulations, 2015
Insert the following at the end of the page
Secretarial Audit Report
Regulation 24A mandates that every listed entity and its material unlisted
subsidiaries incorporated in India shall undertake Secretarial Audit and shall annex
with its Annual Report, a Secretarial Audit Report, given by a Company Secretary
in Practice, in such form as may be specified with effect from the year ended March
31, 2019.
Certification regarding Director’s Disqualification
As per Schedule V, Part C , Clause 10 (i), a certificate from a Company Secretary
in Practice that none of the directors on the board of the company have been
debarred or disqualified from being appointed or continuing as Directors of
Companies by the Board/ Ministry of Corporate Affairs or any such Statutory
Authority.
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3
LESSON 6
AN OVERVIEW OF SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND
TAKEOVERS) REGULATIONS, 2011
Page No. 142
Disclosures under Regulation 29(1) and 29(2) of SAST Regulations has been extended
to non- promoters also.
For the purpose of system driven disclosure, the requirement specified under Regulation
29(4) of SAST Regulations shall not be applied to a scheduled commercial bank or
public financial institution as pledgee irrespective of whether such a pledge is for
securing indebtedness in the ordinary course of business or not.
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4
LESSON 8
SEBI (DELISTING OF EQUITY SHARES) REGULATIONS, 2009
Page No. 164
NON- APPLICABILITY
The following shall be inserted after the first para-
Nothing in these regulations shall apply to any delisting of equity shares of a listed
entity made pursuant to a resolution plan approved under section 31 of the Insolvency
and Bankruptcy Code, 2016, if such plan, –
(a) lays down any specific procedure to complete the delisting of such share; or
(b) provides an exit option to the existing public shareholders at a price specified in
the resolution plan:
Provided that, exit to the shareholders should be at a price which shall not be less than
the liquidation value as determined under regulation 35 of the Insolvency and
Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons)
Regulations, 2016 after paying off dues in the order of priority as defined under section
53 of the Insolvency and Bankruptcy Code, 2016.
Provided further that, if the existing promoters or any other shareholders are proposed
to be provided an opportunity to exit under the resolution plan at a price higher than the
price determined in terms of the above proviso, the existing public shareholders shall
also be provided an exit opportunity at a price which shall not be less than the price, by
whatever name called, at which such promoters or other shareholders, directly or
indirectly, are provided exit:
Provided also that, the details of delisting of such shares along with the justification for
exit price in respect of delisting proposed shall be disclosed to the recognized stock
exchanges within one day of resolution plan being approved under section 31 of the
Insolvency and Bankruptcy Code, 2016.
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5
LESSON 11
SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015
Page No. 214
DISCLOSURES OF INTEREST BY CERTAIN PERSONS
The CEO and upto two levels below CEO of a company shall be deemed as employees
for the purpose of system-driven disclosures in respect of Regulation 7(2) (b) of PIT
Regulations.
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6
LESSON 16
SECURITIES MARKET INTERMEDIARIES
Page No. 310
INTERNAL AUDIT OF INTERMEDIARIES BY A COMPANY SECRETARY
IN PRACTICE
SEBI has mandated that RTA has to undergo for compulsory internal audit for which a
PCS is authorised by SEBI to carry out the internal audit at par with other professionals.
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