SEBI Eyes Simpler Rules for Non-Convertible Securities Issuers

Markets regulator SEBI has proposed changes to disclosure norms for issuers of non-convertible securities. In a consultation paper released on July 25, 2025, Friday, it suggested doing away with the requirement of sending physical copies of financial statements and annual reports to security holders.

Instead of printed reports, issuers would be required to send a letter containing a web link and a Quick Response (QR) code that leads to the full financials and annual report. The link must include the exact navigation path to the documents.

Cost and Compliance Implications

As per the news reports, SEBI stated that eliminating hard copies would help save costs and reduce paper usage. The change is also aimed at bringing consistency in regulatory requirements across different types of listed entities.

Currently, some issuers of non-convertible securities are not governed by the Companies Act, 2013, and therefore are not bound by its disclosure timelines. SEBI pointed out the need to define specific timelines for such entities.

Timeline Structure

SEBI proposed that companies governed by the Companies Act, 2013, should continue following its timelines. For entities covered under other statutes, the relevant provisions of their parent Act should apply. If no such timeline exists, a 21-day period is recommended.

This will cover various issuers such as statutory corporations or institutions created under special Acts. These bodies often do not follow the same compliance framework as regular companies, leading to ambiguity in reporting deadlines.

SEBI has invited public comments on the proposals up to August 15, 2025. Stakeholders can submit their views before the regulator finalises the changes.

Read More: Jane Street Entities Made Over ₹36,000 Crore in Derivatives Trading: SEBI!

Conclusion

The proposed changes are to define clearer disclosure practices for non-convertible security issuers, especially those not governed by the Companies Act, 2013. The shift to digital communication will help standardise reporting and remove procedural gaps.

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