Capital market regulator Sebi on July 25 proposed to ease rules for issuers of non-convertible securities by replacing the requirement of sending a hard copy of financials and annual reports to security holders with a web link and quick response (QR) code to access the same.

In the consultation paper, Sebi proposed to amend the regulation by replacing provisions for the same. “A letter providing the Quick Response Code and the web-link, including the exact path, where complete details of the Annual Report is available, to those debenture holder(s) who have not registered their email id,” the Sebi paper said.

The consultation paper said the relaxation from sending physical copies of financials will result in cost savings and prevent paper wastage, and add to regulatory consistency along with ease of business.

The provision of a QR code is proposed to be incorporated to facilitate ease of access for the debenture holders, the regulator said.

Additionally, Sebi proposed specifying timelines for issuers having listed non-convertible securities regarding the requirements of sending a copy of financials to the debenture holders.

"Unlike entities having listed specified securities, there are issuers having listed non-convertible securities, which are not constituted under the Companies Act, 2013, and hence, the timelines specified under the Companies Act, 2013, with respect to sending of copy of financials to the debenture holders are not applicable upon them. Therefore, there is a need to specify timelines within which the issuer is required to comply with the said requirements," Sebi said.

Sebi proposed that for listed companies, the timelines specified under the Companies Act, 2013, should be applicable.

For listed entities, which are constituted under some other Act or statute, the relevant provisions of their parent Act or statute should be applicable. In the absence of any such provision, a timeline of 21 days in line with the provisions of the Companies Act, 2013, should be provided.

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