Progress on Industry Standards Forum proposed by SEBI

  • December 14, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Progress on Industry Standards Forum proposed by SEBI

Subject : Economy

Section: Capital Market

  1. Forum Composition:
    • Comprising apex industry chambers of CII, FICCI, and Assocham.
  2. Chairman’s Statement:
    • Chairman KV Kamath announced significant progress in establishing new standards.
    • Emphasis on compliance with SEBI regulations.
  3. Deliberations and Consultations:
    • Extensive deliberations ongoing with industry representatives in consultation with SEBI.
  4. Upcoming Standards:
    • ESG Disclosures:
      • Precise compliance standards for SEBI-mandated ESG disclosures under Business Responsibility & Sustainability Reporting (BRSR) Core framework.
      • Applicable assurance requirements.
    • Rumour Verification:
      • Developing standards for compliance with the recently introduced requirement of verification of rumors by listed entities.
  1. SEBI Regulations:
    • Focus on recently amended provisions of SEBI Listing Obligations and Disclosure Requirement (LODR) Regulations.
  2. Future Agenda:
    • Post finalization of the first set of standards, the Forum plans to address disclosure requirements under Regulations 30 and 30A of the LODR Regulations.

About Industry Standards Forum:

  1. Objective:
    • SEBI (Securities and Exchange Board of India) aims to facilitate capital formation and improve the ease of doing business.
  2. Formation of Industry Standards Forum:
    • SEBI proposes the establishment of an Industry Standards Forum.
    • The forum will be formed by Industry Associations and chaired by a leader from the industry.
    • It will operate under the auspices of the stock exchanges.
  3. Pilot Initiatives:
    • The industry associations express interest in undertaking more than one pilot initiative.
  4. Priority Areas for Initial Focus:
    • The following areas have been identified as priority areas for the initial phase:
      • (a) Rumour Verification Requirements
      • (b) Disclosure Requirements under Regulations 30 and 30A of LODR Regulations
      • (c) BRSR Core/ESG Assurance Requirements
      • (d) Structured Digital Database Requirements under PIT Regulations
  1. Timeline:
    • Industry associations propose a timeline of three to four months for designing standards to effectively implement regulations.
  2. Forum’s Role:
    • The Industry Standards Forum will be responsible for formulating standards to implement specific regulations and circulars.
  3. Detailed Standards:
    • Standards will be designed at a detailed level to demonstrate compliance with the specified regulations and circulars.
  4. Regulatory Compliance Focus:
    • The initiative aligns with SEBI’s commitment to promoting regulatory compliance and streamlining business operations in the financial markets.
  5. Capital Market Efficiency:
    • The overall objective is to enhance capital market efficiency and foster a conducive environment for businesses in India.

SEBI Listing Obligations and Disclosure Requirement (LODR) Regulations

  • SEBI Listing Obligations and Disclosure Requirement (LODR) Regulations are guidelines and obligations imposed by the Securities and Exchange Board of India (SEBI) on listed companies.
  • The regulations aim to ensure transparency, provide material information to investors, and maintain the integrity and efficiency of the securities market.
  • Applicable to all companies whose securities are listed on recognized stock exchanges.
  • Mandates specific disclosure requirements related to financial performance, shareholding patterns, corporate governance, and other material events.

Regulation 30 and 30A: Regulation 30: Deals with disclosure of events or information that may have a bearing on the company’s performance or share prices. Regulation 30A: Pertains to disclosures of material events by listed entities.

Rumour Verification Requirements: SEBI has proposed the formation of an Industry Standards Forum to address Rumour Verification requirements under these regulations.

BRSR Core/ESG Assurance Requirements: BRSR (Business Responsibility and Sustainability Reporting) Core and ESG (Environmental, Social, and Governance) Assurance Requirements are part of the disclosure framework.

Structured Digital Database Requirements under PIT Regulations: Deals with requirements related to a Structured Digital Database under the Prevention of Insider Trading (PIT) Regulations.

Securities and Exchange Board of India (SEBI):

SEBI is a statutory body established in 1992 under the Securities and Exchange Board of India Act, 1992. SEBI’s primary functions include protecting the interests of investors in securities and promoting and regulating the securities market. The headquarters of SEBI is located in Mumbai.

Before SEBI, the regulatory authority was the Controller of Capital Issues, operating under the Capital Issues (Control) Act, 1947. In 1988, SEBI was formed as the regulatory body for capital markets in India through a government resolution.

Initially, SEBI was a non-statutory body without statutory powers. It later gained autonomy and statutory powers with the enactment of the SEBI Act in 1992. The SEBI Board includes a Chairman and several other whole-time and part-time members. SEBI can appoint committees as needed to address specific issues.

economy Progress on Industry Standards Forum proposed by SEBI