SEBI plans automated disclosure mechanism to boost ease of doing business

A new system which would automatically capture and disclose changes in shareholding for listed companies is underway for markets regulator Securities and Exchange Board of India (SEBI).

According to a LiveMint report, a system-driven disclosure is being developed to eliminate additional reporting and enhance the ease of doing business. India leapfrogged 30 spots to 100 on the World Bank's 'Ease of Doing Business 2018' report.

SEBI's move to making an organised system-driven disclosure is one of the 90 reforms aimed at accelerating India's rank to 50 in the next 'Doing Business' report.

"The system being worked out will automatically gather and integrate the change in shareholding information from stock exchanges, depositories and registrar and transfer agents (RTAs) in a timely and accurate manner," a source informed LiveMint.

Compliance burden on companies, promoters and individuals on reporting a change in shareholding will reduce as such data will be automatically captured by depositories and exchanges, experts say.

As it exists now, one has to disclose a change in the shareholding pattern under the Listing Obligation and Disclosure Requirements (LODR). The companies are required to report any changes pertaining to a merger, de-merger, acquisition by promoters and issue of convertibles once in every quarter.

In fact, the report states that exchanges depositories and RTAs have already been asked to upgrade/modify their systems to implement system-driven disclosure mechanism.