INDIA: SEBI Listing Obligations and Disclosure Requirements Second Amendment Regulations, 2016

Wednesday July 13 2016

The Securities and Exchange Board of India has amended the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The following regulation has been inserted, namely:

“Dividend Distribution Policy. 43A. (1) The top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) shall formulate a dividend distribution policy which shall be disclosed in their annual reports and on their websites.

The updated dividend distribution policy shall include the following parameters:

a)      the circumstances under which the shareholders of the listed entities may or may not expect dividends;

b)      the financial parameters that shall be considered while declaring dividends;

c)       internal and external factors that shall be considered for declaration of dividends;

d)      policy as to how the retained earnings shall be utilised; and

e)      parameters that shall be adopted with regard to various classes of shares

Provided that the listed entity proposes to declare dividends on the basis of parameters in addition to clauses (a) to (e), or proposes to change such additional parameters or the dividend distribution policy contained in any of the parameters, it shall disclose such changes along with the rationale for the same in its annual report and on its website.

(3) The listed entities other than top five hundred listed entities based on market capitalisation may disclose their dividend distribution policies on a voluntary basis in their annual reports and on their websites.”  

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