Reinforcing obligations

New listing regulations are a step in the right direction. Priyanka Kumar and Sohrab Khushrushahi explain why

The Securities and Exchange Board of India (SEBI) notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, on 2 September. Prior to the introduction of these listing regulations, compliance and disclosure requirements for the listing and continued listing of securities were primarily incorporated in listing agreements executed by various entities with the respective stock exchanges. Earlier SEBI prescribed different formats of the agreement depending on the type of security to be listed.

The new listing regulations provide listing conditions for all types of securities and introduce a simpler form of the listing agreement. Entities that are listing their securities are required to execute the new listing agreement, while entities that are already listed have a period of six months from the date of notification of the regulations to sign the new listing agreement.

The listing regulations apply to all entities that have listed certain kinds of securities on Indian stock exchanges. The types of securities include equity shares, non-convertible debentures, non-convertible redeemable preference shares, perpetual debt instruments, Indian depository receipts, units issued by mutual funds and securitised debt instruments.