SEBI

The Securities and Exchange Board of India (Sebi) has amended the equity listing agreement, asking companies to set up an agency to monitor the utilisation of issue proceeds.

In a circular put out late Thursday evening, Sebi said, “It has been decided to amend Clause 49 of the equity listing agreement, requiring the issuer company to place the monitoring report before its audit committee.”

The audit committee will review the reports and the statement indicating material deviations in the utilisation of issue proceeds and make appropriate recommendations to the board of the company.

Every issuer company will also be required to inform the material deviations in the utilisation of issue proceeds to the stock exchange and shall also make the adverse comments of audit committee/monitoring agency public through advertisements in newspapers.

Further, Sebi has introduced Clause 52 in the equity listing agreement, requiring listed companies to file information with the exchange only through the Corporate Filing and Dissemination System (CFDS).

“Listed companies shall, in a phased manner, be required to file information with the stock exchange only through CFDS,” said the circular.

Accordingly, 100 companies have been shortlisted by BSE and NSE to make their submissions through the CFDS from the period starting January 1, 2008.

CFDS is a new portal, put in place jointly by BSE and NSE, which offers a XBRL-enabled common platform for listed companies to file such information, statements and reports as may be specified by these exchanges.

It may be recalled that Sebi had earlier introduced a clause in equity listing agreement, mandating certain corporate information through the Electronic Data Information Filing and Retrieval (EDIFAR) system hosted by the National Informatics Centre on Sebi’s behalf. EDIFAR will gradually be phased out and will be replaced by CFDS.

“Over a period, other modes of sending public information to stock exchanges for compliance with clauses of Equity Listing Agreement shall be dispensed with, including filing through EDIFAR. Companies filing through CFDS are not required to make filing through EDIFAR,” said Sebi.