Sebi to start consultation on self-regulating organisations in securities market
28 March 2019
The board of market regulator Securities and Exchange Board of India (Sebi) at its meeting on Wednesday decided to initiate public consultation on self regulating organisations (SROs) in the securities market. Sebi will soon come out with a Consultation Paper on Self Regulatory Organisations in Securities Market.
The board approved the proposal for undertaking a public consultation process to amend the Sebi (Self Regulatory Organizations) Regulations, 2004 with an objective of defining SRO, rationalising the process of recognition and strengthening the role of Self Regulatory Organizations in the securities market.
The board also decided to defer the implementation of this provision relating to disclosure of payment relating to royalty and brand usage for three months, ie, till 30 June 2019 in view of the representations received on the subject and with a view to analysing them.
As per Regulation 23 (1A) of the Sebi (Listing Obligations and Disclosure Requirements) Regulations, payments made to related parties towards brand usage or royalty are to be considered material if the transaction(s) exceed 2 per cent of the annual consolidated turnover of the listed entity during a financial year. This requires approval of the shareholders, with no related party having a vote to approve such resolutions. This provision was to come into effect from 1 April 2019.