SEBI Plans to Extend Exemption on Hard Copy Delivery for Non-Convertible Securities

India’s market regulator, the Securities and Exchange Board of India (SEBI), is proposing to continue the relaxation from sending physical copies of financial statements to certain investors holding listed non-convertible securities. This move, aimed at reducing paperwork and aligning with digital practices, comes as part of a new draft circular released for public consultation.

What Is the Proposal About?

The proposal suggests an extension of the exemption under Regulation 58(1)(b) of SEBI’s Listing Obligations and Disclosure Requirements (LODR), 2015. This regulation typically requires companies to send hard copies of financial statements and related documents to investors who haven’t registered their email addresses. However, SEBI had previously allowed companies to skip this requirement until September 30, 2024. The new proposal aims to extend this exemption beyond that date in two phases.

Alignment with MCA Guidelines

SEBI’s decision aligns with the Ministry of Corporate Affairs’ (MCA) recent announcement, which extended a similar relaxation until September 30, 2025. By following the MCA’s direction, SEBI is ensuring a coordinated approach to easing compliance for listed debt issuers.

Read more: SEBI to Simplify Scheme Categories; Plans Tarun Yojana for New and Low-Income Investors

Conditions for Using the Relaxation

While SEBI is easing the requirement for physical document delivery, there are certain conditions attached. Companies must publish an advertisement under Regulation 52(8), which should include a web link to the financial summary. This link will allow investors to access key information digitally, ensuring transparency is maintained even in the absence of hard copies.

The documents referenced include details mandated under Section 136 of the Companies Act, 2013, ensuring investors are still well-informed about the company’s financials.

Open for Public Feedback

SEBI has invited feedback from stakeholders on this proposal. The consultation period is open until May 12, 2025, and comments can be submitted through SEBI’s online portal. The draft circular includes a list of proposals on which SEBI seeks public opinion, along with a web-based form to ensure a structured and efficient feedback process.

Conclusion

If implemented, this initiative will not only reduce paper usage but also promote digital access to financial information. As more investors move online, such steps are seen as timely and practical. For investors, this means quicker and easier access to financial data, supporting more informed decision-making.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.