May 21, 2020
Summary of the circular issued by SEBI on 20/05/2020
1. SEBI issues advisory on disclosure of material impact of CoVID–19 pandemic on listed entities under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR’)
Through this advisory, SEBI has emphasized the need for listed entities to ensure the availability and access to information on the impact of CoVID-19 and its consequences on the company and its operations and timely communication of the same to its investors and stakeholders. This requirement on material disclosure is already mandated by:
- Regulation 30(3) of the LODR which specifies that a listed entity shall make disclosures of events specified in Para B of Part A of Schedule III of LODR, based on application of the guidelines for materiality,
- Guidance issued by SEBI vide Circular No. CIR/CFD/CMD/4/2015 dated 09/09/2015 on disclosures causing disruptions of operations due to natural calamity, force majeure and other events and
- Regulation 51(1) of the LODR which requires prompt dissemination to the stock exchange(s) by entities that have listed NCDs and NCPRs, of all information having bearing on the performance/operation of the listed entity, price sensitive information or any action that shall affect payment of interest or dividend.
In this context, having regard to the requirements of Regulation 4(2)(e) of the LODR on disclosure and transparency, SEBI has provided an illustrative list of qualitative and quantitative information that listed entities may consider disclosing, subject to the application of materiality. Further, listed entities may specify/include the impact of the CoVID-19 pandemic on their financial statements, while submitting its financial statements under Regulation 33 of the LODR.