Companies are struggling to prepare themselves for the new regulations, some of which are in place while others will take effect in the next few months, executives said. The new rules include confirmation or denial of market rumours, disclosing business contracts to family settlements, matters concerning senior employees, new environmental, social and governance regulations, communicating actions taken by any authorities, the companies say.
Sebi has created history in 2023 in terms of regulator changes. In seven months, it issued a record 40 consultation papers compared with 19 in 2022 and 24 in 2021. The consultation papers are issued prior to consultations and new rules coming into force.
Experts urged Sebi to monitor and help tackle implementation challenges carefully. “Whilst the intent of Sebi is laudable, the number of changes heralded is becoming very challenging for corporates to understand, digest and manage,” said Ketan Dalal, MD of Katalyst Advisors.
‘More Pressure on Secretarial Depts’
“The overall compliance burden and, indeed, availability of professionals to manage this ecosystem is another challenge,” Dalal said.
Some regulations, especially listing obligations and disclosure requirements (LODR), require people down the line to comprehend and accept them, he said.
“There is much more pressure on secretarial departments to deal with the pushback from operating teams,” Dalal added.
Sebi told ET it follows a wide consultation process before making policy and implementing any regulation.
“In terms of implementation challenges faced by the industry, Sebi has recently written to the industry bodies, exchanges, ICAI, and ICSI to participate in a pilot for the formation of an industry standards forum to be formed under the aegis of the exchanges, chaired by an industry leader with representation from various trade bodies to formulate implementation standards for specific regulations or circulars in consultation with Sebi,” the regulator said in an email. “Industry feedback on the pilot has been positive, with suggestions covering regulations for the pilot. Thus, Sebi expects to facilitate the first pilot(s) shortly.”
Sebi has mandated firms to reveal all contracts and arrangements for strategic, technical, manufacturing and marketing tie-ups and lowered the materiality threshold.