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SEBI INSERTED NEW LISTING REGULATION 43A IN LODR MANDATING FORMULATION OF DIVIDEND DISTRIBUTION POLICY:

Securities and Exchange Board of India (SEBI), has notified SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016 vide Notification No. SEBI/LAD-NRO/GN/2016-17/008 dated 08/07/2016, published in the Official Gazette on 17.06.2016, which has inserted ‘Regulation 43A- Dividend Distribution Policy’ after Regulation 43.

Key Highlights of the Regulation 43A are as under:

  • Initial Applicability: Top 500 listed entities based on market capitalization.
  • Disclosures where to be made: In annual reports & on the websites of the Companies.
  • Contents of the Dividend Policy:

Parameter while declaring Dividend:

(a) circumstances leading to expectation of shareholders;

(b) the financial parameters to be considered;

(c) internal and external factors to be considered;

(d) policy on how to utilize of retained earnings; and

(e) parameters to be adopted with regard to various classes of shares.

  • If the Company proposes to declare dividend on parameters other than that mentioned in (a) to (e) above, or outside the scope of the dividend distribution policy contained in any of these parameters, the Company shall also disclose such deviation together with its rationale.
  • Other Companies which are not covered in the ambit of this notification my follow the disclosure requirements voluntarily.

The said Notification of SEBI is available at the following link:LODR Second amendment_w.e.f.8July0216 gazattee copy

 

 

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