SEBI May Extend Waiver for Sending Hard Copies of Financials to Debt Investors

SEBI has proposed to extend the existing relaxation for issuers of listed non-convertible debt securities from the obligation of sending hard copies of key financial documents to investors who have not registered their email addresses. This relaxation relates to Regulation 58(1)(b) of the SEBI Listing Obligations and Disclosure Requirements (LODR), 2015, which mandates the dispatch of hard copies of financial statements and related documents like the board’s report, auditor’s report, and other financial disclosures to such investors. The current exemption was originally granted through a circular dated October 6, 2023, and is valid up to September 30, 2024. SEBI now plans to extend this exemption beyond that date in two phases, with the first phase covering a period from October 1, 2024, to a date that will be specified later, and the second phase extending until September 30, 2025.

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The proposal is in line with the Ministry of Corporate Affairs’ similar move announced through General Circular No. 09/2024 dated September 19, 2024, which also extended the relaxation for physical document dispatch until the end of September 2025. SEBI has taken this step based on the MCA’s direction and feedback received from stakeholders. The aim is to reduce the regulatory burden on companies and promote the shift towards digital communication with investors.

According to SEBI’s proposal, companies will not face any penal action for not complying with Regulation 58(1)(b) during the relaxation period. However, to maintain transparency and ensure investors still have access to important information, companies will be required to publish an advertisement in accordance with Regulation 52(8). This advertisement must include a web link to a digital version of the financial documents, containing key highlights and relevant details as per Section 136 of the Companies Act, 2013. This will allow investors to access the information online even if they have not provided an email address.

SEBI has opened the proposal for public consultation and is inviting comments from stakeholders, companies, and the general public. The deadline to submit feedback is May 12, 2025. Interested parties can share their views through SEBI’s online comment portal. The final decision will be taken after considering the responses received during this consultation process. This move is expected to encourage the use of digital communication, reduce paper usage, and simplify compliance procedures for issuers, while still ensuring that investors remain informed and protected.