SEBI & RBI

SEBI's LODR Amendments 2024: What Listed Companies Must Do Now

SEBI's sweeping amendments to the Listing Obligations and Disclosure Requirements Regulations introduce new governance mandates for listed entities. Here's a compliance action plan.

TALKLAWS Advisory Team· Corporate Governance & Compliance PracticeMay 5, 20267 min read

SEBI has been systematically tightening corporate governance standards for listed companies through a series of amendments to the LODR Regulations. The 2024 amendments, effective in tranches, introduce meaningful changes to board composition, related party transaction (RPT) approvals, and disclosure requirements.

Key Changes in the 2024 LODR Amendments

Enhanced RPT framework: Material RPTs now require shareholder approval with specific disclosure of commercial rationale and arm's-length pricing basis
Board composition: Strengthened independent director requirements with clearer independence criteria and cooling-off periods
ESG disclosures: Business Responsibility and Sustainability Report (BRSR) mandate expanded with supply-chain disclosures for top 250 listed entities
Shareholder rights: Simplified process for shareholders to seek explanations on financial disclosures
Insider trading: Enhanced controls around designated persons and connected persons definitions

The BRSR supply-chain disclosure requirement is particularly significant. Listed entities in the top 250 by market cap must now report on ESG parameters for their top suppliers and vendors.

Compliance Action Plan

Audit your RPT register against the amended materiality thresholds
Review board and committee composition for LODR compliance
Update RPT policy and shareholder approval procedures
Prepare BRSR supply-chain disclosure framework if in top 250 by market cap
Review your insider trading code against the updated SEBI (PIT) Regulations

Non-compliance with LODR requirements exposes listed companies to SEBI enforcement, adjudication proceedings, and reputational risk. Proactive compliance is significantly less costly than regulatory action.

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