SEBI to amend Clause 49 rules to tighten listing requirements

The Securities and Exchange Board of India (SEBI) has proposed to initiate a series of changes in Clause 49 rules, which relate to corporate governance, so as to tighten the listing norms for companies.

As per the proposed changes, the government nominees in public sector companies would not be treated as independent directors as they have “material pecuniary relationship with the government”.

The market regulator also has made it mandatory for companies to disclose relationship between independent directors, as well as other directors. SEBI has stipulated that companies would disclose the relation between independent directors inter-se, as well as the other directors of the company not holding management position, in all documents where the details of the board of directors are incorporated. SEBI also has proposed deletion of the provision allowing nominee directors appointed by the institutions to be considered as independent directors. The proposals came after SEBI received complaints that some companies were appointing independent directors related to other directors on the board. SEBI also proposed to fix the minimum age of 21 for independent directors.

The proposed norms have been made public for feedback.

Read the Business Standard article.