Listing Obligations and Disclosure Requirements: formula sheet

Key formulas

Binding force of listing agreement

Securities listed on application on a recognised stock exchange → applicant must comply with the conditions of the listing agreement (SCRA, Section 21)

This is why LODR obligations are legally enforceable.

SEBI's power over listing requirements

SEBI may specify requirements for listing and transfer of securities and incidental matters (SEBI Act, Section 11A(2))

Operates without prejudice to Section 21 of the SCRA. LODR is made under SEBI's regulation-making powers.

SEBI's power over capital issue disclosures

SEBI may specify by regulations matters relating to issue of capital, transfer of securities and the manner of disclosure (Section 11A(1)(a))

Section 11A(1)(b) also allows general or special orders prohibiting or conditioning prospectuses, offer documents and advertisements.

Penalty for failure to furnish information (SCRA, Section 23A(a))

Penalty: minimum ₹1,00,000; up to ₹1,00,000 per day of continuing failure; maximum ₹1,00,00,000

Applies to failure to furnish within time, or furnishing false, incorrect or incomplete information, to an exchange or SEBI.

Penalty for failure to maintain books or records (SCRA, Section 23A(b))

Same penalty band: minimum ₹1,00,000; up to ₹1,00,000 per day; maximum ₹1,00,00,000

Relates to books of account or records required by the listing agreement, conditions or bye-laws of the exchange.

Principles in Regulation 4

Disclosure and transparency + shareholder rights + equitable treatment + stakeholder role + board responsibility

Regulation 4 states these as principles that govern every listed entity. Use them as a checklist when a question gives no specific rule.

Disclosure standard

Disclosures must be adequate, accurate, explicit, timely and presented in a simple language

Disclosure must also reach all investors fairly. Use these as the test words in your answer.

Chapter II scope

Chapter II = Regulation 4 (principles) only; Chapter III = common obligations, from Regulation 5; Chapter IV = corporate governance, Regulations 15 to 27

Chapter II holds Regulation 4 only. Chapter III begins at Regulation 5 (agreement with the exchange) and includes the compliance officer (Regulation 6) and the registrar and share transfer agent (Regulation 7). Regulation 15, the applicability provision, opens Chapter IV on corporate governance. Verify other regulation numbers against the current LODR text before the exam.

Accountability for compliance

Listed entity (through board) is responsible; compliance officer monitors and reports

The officer assists compliance. The legal duty stays with the entity and its board.

Board composition (Reg 17)

Non-executive directors ≥ 50% of board; at least one woman director. Chairperson a non-executive director and not related to a promoter or to senior management: independent directors ≥ 1/3 of board. Otherwise (for example an executive chairperson, or a chairperson who is a promoter or related to a promoter or senior management): independent directors ≥ 1/2 of board

Round up when the fraction is not a whole number. Top 1000 listed entities must also have at least one woman independent director.

Board meetings (Reg 17)

At least 4 meetings a year; gap between two meetings ≤ 120 days

Same frequency and gap apply to the audit committee.

Directorship limits (Reg 17A)

Maximum 8 listed entities for any director; independent director maximum 7; independent director who is a whole-time director elsewhere: maximum 3

Limits count directorships in listed entities.

Audit Committee (Reg 18)

Members ≥ 3 directors; at least 2/3 of members are independent directors; chairperson an independent director; meets ≥ 4 times a year, gap ≤ 120 days; quorum = greater of 2 members or 1/3 of members, with at least 2 independent directors

Round the two-thirds figure up (for example, 2/3 of 4 members is 2.67, so 3 independent directors). All members financially literate; at least one with accounting or financial management expertise. Company secretary acts as secretary.

Nomination and Remuneration Committee (Reg 19)

Members ≥ 3 directors; all non-executive; independent directors ≥ 1/2 of members; chairperson an independent director; meets ≥ 1 time a year; quorum = greater of 2 or 1/3, with at least 1 independent director

Companies Act section 178 also asks for at least half independent. LODR adds the independent chairperson and the quorum detail.

Stakeholders Relationship Committee (Reg 20)

Members ≥ 3; chairperson a non-executive director; at least 1 independent director; meets ≥ 1 time a year; quorum = greater of 2 or 1/3, with at least 1 independent director

Focus is grievances of security holders such as non-receipt of dividends or annual reports.

Risk Management Committee (Reg 21)

Members ≥ 3; majority are board members, including at least 1 independent director; chairperson a board member; meets ≥ 2 times a year; gap ≤ 180 days; quorum = greater of 2 or 1/3, with at least 1 board member

Mandatory for the top 1000 listed entities by market capitalisation. Senior executives may be members.

Independent directors' meeting (Reg 25)

At least 1 meeting a year, without non-independent directors and management

Vacancy in the office of an independent director must be filled promptly, within the time set by the regulations (three months from the vacancy, or the next board meeting if later).

Materiality of an RPT

Material if value of transactions with a related party > lower of ₹1,000 crore and 10% of annual consolidated turnover

Aggregate the transactions with that related party for the financial year. Brand usage or royalty payments use 5% of turnover. Check the latest revised limit for large entities.

Approval chain

Every RPT: prior audit committee approval (independent directors only). Material RPT: plus prior shareholder approval, related parties abstain

Omnibus approval is valid for one year at a time.

Material subsidiary test

Subsidiary income or net worth > 10% of consolidated income or net worth of listed entity and subsidiaries, in the immediately preceding accounting year

Either income or net worth is enough. You do not need both.

Governance of a material subsidiary

Independent director on the board of an unlisted material subsidiary; special resolution to sell or dispose of shares so as to cease control or fall to 50% or below, or to sell or lease substantial assets

Substantial assets means more than 20% of the material subsidiary's assets in a financial year. The exception is a sale under a scheme of arrangement approved by a court or tribunal.

Secretarial reports

Secretarial audit report: annexed to the board's report. Secretarial compliance report: filed with the exchanges within 60 days of the financial year end

A material unlisted subsidiary also needs a secretarial audit.

Core duty

Listed entity → disclose events in Schedule III to stock exchanges

Applies to Part A events (deemed material or subject to materiality) and the other parts as applicable.

Two categories of events

Deemed material (no test) vs. Material only if criteria are met

Always identify which category an event falls in before answering.

Materiality criteria

Omission risks misleading information | quantitative thresholds met | board opinion that it is material

Learn the quantitative thresholds from the current Regulation text, including the percentage tests and the lower-of rule.

Policy requirement

Board-approved policy for determining materiality, hosted on the website

The policy must be on the entity's website.

Authorised KMPs

Board authorises one or more KMPs to determine materiality and disclose

Their contact details go to the exchanges and the website.

Timelines

Board decisions: shortest limit | Events outside the entity: longer limit | Others: as prescribed

State the exact hours from the current Regulation. If delayed, the entity must explain the reasons for delay.

Penalty for insider trading (SEBI Act, s 15G)

Not less than ₹10 lakh; up to ₹25 crore or 3 × profits, whichever is higher

Relevant where UPSI is used for dealing, communicated, or used to counsel others.

Quarterly financial results (Reg 33)

Filing deadline = 45 days from end of each quarter (except last quarter)

Results go to the stock exchange after the board approves them. The audit committee reviews them first. The auditor gives a limited review report for quarterly results.

Annual financial results (Reg 33)

Audited annual results = within 60 days from end of the financial year

Applies where results are filed with the audit report. The last quarter's results can be part of the annual filing. Check the current text for the exact conditions.

Shareholding pattern (Reg 31)

Quarterly filing = within 21 days from end of each quarter

Also required at other stages, such as before listing, and on capital changes. Check the current Regulation for the exact trigger points.

Corporate governance report (Reg 27)

Quarterly compliance report on corporate governance = within 21 days from end of each quarter

The listed entity files this with the stock exchange each quarter. Check the current format.

Annual report (Reg 34)

Annual report sent to shareholders, and filed with the exchanges, before the AGM

It includes the directors' report, the management discussion and analysis, the business responsibility and sustainability report for entities covered, and the corporate governance report.

Website disclosure (Reg 46)

Maintain a functional website with the specified information, and update it on any change

Includes policies, board details, investor contact points, notices, results and the annual report. Learn the heads, not every item.

Section 17A(1): eligibility bar

No offer to public or listing of section 2(h)(ie) securities unless issuer meets SEBI's eligibility criteria and other requirements

Applies to securities of the nature in sub-clause (ie) of clause (h) of section 2.

Section 17A(2): listing application

Apply to one or more recognised stock exchanges BEFORE issuing the offer document

The issuer intends to offer the certificates or instruments to the public.

Section 17A(3): refund rule

Permission not granted or refused → repay all money forthwith; not repaid within 8 days → joint and several liability with interest at 15% per annum from the expiry of the eighth day

Liability falls on the issuer and every director or trustee in default. Public holidays under the Negotiable Instruments Act, 1881 are disregarded when counting the eighth day.

Section 17A(4): application of listing provisions

SCRA listing provisions for a public company's securities apply mutatis mutandis to the special purpose distinct entity

The issuer is the special purpose distinct entity.

Section 11A(1) SEBI Act

SEBI may (a) specify by regulations issue of capital, transfer of securities and disclosure manner; (b) by orders prohibit or set conditions for prospectus, offer document or advertisement

For the protection of investors, without prejudice to the Companies Act.

Section 11A(2) SEBI Act

SEBI may specify requirements for listing and transfer of securities

Without prejudice to section 21 of the SCRA.

Penalty for breach of listing conditions

₹5 lakh ≤ penalty ≤ ₹25 crore

Section 23E, SCRA 1956. Applies to a company, or a person managing a CIS, mutual fund, REIT, InvIT or AIF, that fails to comply with listing or delisting conditions or grounds.

Exchange bye-laws

Bye-laws made with SEBI's previous approval (Section 9(1), SCRA)

Can provide for listing, suspension or withdrawal of securities, suspension of trading, and levy and recovery of fees, fines and penalties (Section 9(2)).

Punishment for breach of bye-laws by a member

Fine, expulsion, suspension for a specified period, or other non-monetary penalty

Section 9(3)(b), SCRA. This applies to members of the exchange, not to listed companies.

Fraud and insider trading in listed securities

Prohibited under Section 12A, SEBI Act, 1992

Covers manipulative and deceptive devices, fraud, insider trading and dealing on material or non-public information.

Stock broker defaults (SEBI Act)

Section 15F: contract notes ≥ ₹1 lakh up to ₹1 crore; excess brokerage ≥ ₹1 lakh up to 5 times the excess

Failure to deliver securities or pay: ₹1 lakh per day of continuing failure, subject to a maximum of ₹1 crore.

Quick revision

• LODR means the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which set continuing duties for listed entities.
• Always check applicability first: the type of entity, the securities listed and any transition or exemption.
• Disclosures must be fair, accurate, timely and non-misleading, as the governing principles require.
• Board and committee rules cover composition, independent directors, meetings and the role of each committee.
• Related party transactions need the audit committee's involvement, and shareholder approval applies above the stated limits.
• Learn which events need disclosure to the exchange and the time limit for each.
• Periodic filings include financial results, shareholding pattern and corporate governance reports, with fixed due dates.
• Section 17A of the SCRA: apply to a recognised exchange for listing before issuing the offer document.
• Under section 17A(3), if permission is refused or not granted, refund money forthwith; after eight days default attracts joint and several liability with interest at fifteen per cent per annum.
• SEBI Act section 11 gives SEBI its duty to protect investors and regulate the market, and section 12A bars fraud, insider trading and unlawful acquisition of control.
• Section 11(4) lets SEBI suspend trading, restrain persons from the market and impound proceeds, after giving a hearing opportunity.
• Always end an answer with a clear conclusion on compliance or consequence.

Common mistakes

• Saying LODR applies to every company in India. Fix: LODR applies to listed entities, based on the securities they have listed. An unlisted company is not covered merely by being a company.
• Treating the listing agreement as a purely private contract. Fix: Quote Section 21 of the SCRA: the person who lists must comply with its conditions.
• Treating Regulation 4 as a list of detailed procedures with time limits. Fix: Remember that Regulation 4 sets principles. Time limits sit in the specific disclosure regulations.
• Saying the compliance officer is personally liable for every default of the entity. Fix: Write that the entity and its board are responsible, and the compliance officer monitors compliance and reports to the board.
• Mixing up the Nomination and Remuneration Committee with the Stakeholders Relationship Committee. Fix: Link NRC to directors and pay (appointment, evaluation, remuneration). Link Stakeholders to investor grievances. Remember the chair: independent for NRC, non-executive for Stakeholders.
• Mixing up the independent share for the audit committee and the nomination and remuneration committee. Fix: Audit committee: at least two-thirds of members must be independent directors, and the chair must be independent. NRC: at least half of members independent, all non-executive. Calculate and round up.
• Saying shareholder approval is needed for every RPT. Fix: Audit committee approval is needed for all RPTs. Shareholder approval is needed only for material ones.
• Using ₹1,000 crore as the fixed limit. Fix: Always compare both and take the lower. A small company can cross the limit well below ₹1,000 crore.
• Treating every Schedule III event as needing a materiality test. Fix: Mark each event as deemed material or subject to test. Say so in the answer.
• Stating the timelines from memory without linking to the event type. Fix: Learn them by group: board decisions, events outside the entity, and others. Revise the exact hours from the current text.

Exam tips

• Open every legal-basis answer with Section 21 of the SCRA and Section 11A(2) of the SEBI Act; examiners look for these anchors.
• Name the entity and the security before you apply any LODR provision, so your applicability analysis is explicit.
• Learn the Section 23A penalty band and the overall cap as numbers, and use them in short penalty questions.
• Write one clear conclusion line, for example: the entity is a listed entity and is bound by LODR and the listing agreement.
• Use short notes format for definitions: term, meaning, one example.
• Write Regulation 4 principles as a short list with a one-line meaning for each. Examiners reward clarity.
• In case questions, always give the provision, the facts, then the conclusion. Do not end without a conclusion.
• Keep the compliance officer answer to: who, what duties, to whom they report, and who stays accountable.