SEBI has doubled the threshold for ‘High Value Debt Listed Entities’ to Rs. 1,000 crore proposed

NEW DELHI: Markets regulator SEBI has raised the threshold for identification of High Value Debt Listed Entities (HVDLEs) from the current Rs. 500 crore to Rs. 1,000 crore has been proposed. Currently, Rs. Entities with outstanding value of listed non-convertible debt securities of Rs 500 crore and above are known as ‘High Value Debt Listed Entities’.

In its consultation paper, Sebi has proposed introducing a sunset clause that would terminate governance obligations if HVDLE’s outstanding debt falls below a threshold for a specified period, providing more flexibility.

It has suggested a dedicated chapter in the LODR (Listing Obligations and Disclosure Requirements) Regulations focused exclusively on corporate governance standards for HVDLEs that differentiates them from equity-listed entities.

Also, filing of governance reports in XBRL format, voluntary Business Responsibility and Sustainability Reporting (BRSR) and harmonization of HVDLE reporting with equity-listed entities are proposed.

Further, SEBI has proposed relaxations for HVDLEs which are not companies as per the Companies Act, 2013, with regard to the constitution of Nomination and Remuneration Committee (NRC), Risk Management Committee (RMC) and Stakeholder Relationship Committee (SRC).

To avoid formation of multiple committees by HVDLEs, SEBI has proposed that the Board of Directors of HVDLEs may either choose to constitute NRC/RMC/SRC or ensure that the functions of these committees are delegated and disposed of by the Audit Committee. is done.

Sebi said in its consultation paper on Thursday that the threshold of listed outstanding non-convertible securities for recognition of debt listed entity as HVDLE is Rs. 500 crore to Rs. 1000 crore is proposed.

Also, SEBI has proposed to limit the total number of committees a director can serve, in an equity or debt-listed entity. This will help prevent over-commitment and ensure that they can carry out their responsibilities effectively.

It has proposed that the committee limits for directors should include HVDLE along with equity-listed companies to protect investors and ensure that directors get enough time for each role.

The proposals for HVDLEs, part of the corporate governance norms, are aimed at promoting ease of doing business and investor interest in such HVDLEs. The Securities and Exchange Board of India (Sebi) has invited public comments on the proposals till November 15.