Company Secretarial

May 2025

Index

SEBI Circular SEBI/HO/CFD/PoD2/CIR/P/2025/47:
Enhancing Transparency and Accountability in Listed Entity Disclosures

1	Introduction
2	Understanding the Rationale Behind the Circular
3	Key Features of the SEBI Circular
4	Implications for Corporates and Market Stakeholders
5	Role of Compliance Professionals & Company Secretaries
6	Benefits of the Circular
7	Strategic Recommendations for Companies
8	Future Outlook
9	Conclusion
10	About UJA
11	Our Team

Dear Reader,

The Company Secretary Team at UJA is delighted to share key corporate compliance updates through this edition of the Corporate Chronicle. Our aim is to keep our readers informed about the latest regulatory developments, corporate governance practices, and statutory requirements that impact businesses.

In this edition, we focus on the latest amendments in corporate laws, compliance obligations, and best practices that are essential for companies. We will also explore significant changes in company law and their implications for businesses and stakeholders.

We hope that this edition provides valuable insights and helps our readers stay ahead in the evolving corporate landscape. If you have any feedback or would like us to include specific topics in future editions, please feel free to write to us at cs@uja.in

SEBI Circular SEBI/HO/CFD/PoD2/CIR/P/2025/47: Enhancing Transparency and Accountability in Listed Entity Disclosures

Source: SEBI Circular No. SEBI/HO/CFD/PoD2/CIR/P/2025/47
Date of Issue: April 10, 2025

The Securities and Exchange Board of India (SEBI), through its Circular No. SEBI/HO/CFD/PoD2/CIR/P/2025/47, has ushered in a new era of transparency, governance and accountability for India’s listed entities and those aspiring to list on Indian stock exchanges. These reforms significantly enhance the framework for corporate disclosures, focusing on materiality, ESG reporting, IPO preparedness and board accountability. With increasing global scrutiny on corporate governance and investor protection, SEBI’s initiative aligns Indian capital markets more closely with international regulatory standards.

As Indian companies attract greater interest from global investors and expand their footprint, robust disclosure norms become not just a regulatory requirement but a strategic imperative. The revised guidelines mandate proactive, timely and granular disclosure of material events, the adoption of standardized sustainability reporting and stronger oversight from company boards and compliance officers.

Understanding the Rationale Behind the Circular

SEBI has consistently played a pivotal role in fostering investor confidence and protecting market integrity. In recent years, the financial ecosystem has evolved with growing emphasis on environmental, social and governance (ESG) factors, real-time disclosures and stakeholder engagement. The global financial community now demands greater accountability and swift dissemination of information that may impact investment decisions.

Circular SEBI/HO/CFD/PoD2/CIR/P/2025/47 seeks to address these demands. It aims to eliminate information asymmetry, prevent market abuse and enable investors to make informed decisions. SEBI ensures that critical developments reach the market without delay or distortion by tightening norms around what constitutes a material event and enforcing stricter timelines for disclosures.

Key Features of the SEBI Circular

Redefining Materiality and Disclosure Timelines
One of the most notable updates in the circular is the redefinition of materiality thresholds for corporate disclosures. Previously, disclosures hinged largely on quantitative thresholds like percentage impact on revenue or net worth. However, the new framework adopts a more holistic view:

Materiality must now be assessed through both quantitative and qualitative lenses. Events that might have reputational repercussions or significantly affect stakeholder perceptions qualify as material.
The time frame for disclosure of such material events has been shortened to within 12 hours of the occurrence. This change compels companies to maintain heightened internal vigilance and fast-track decision-making processes.
Failure to disclose material events within this time frame can invite regulatory penalties and damage the company’s credibility in the markets.

Strengthened ESG and Sustainability Reporting
Environmental, Social and Governance (ESG) considerations have taken center stage in corporate performance assessment. Recognizing this shift, SEBI now mandates:

The top 1,000 listed companies by market capitalization must file detailed Business Responsibility and Sustainability Reports (BRSR).
The BRSR must include disclosures on climate risk, carbon emissions, social inclusivity programs and governance metrics.
SEBI encourages companies to integrate sustainability goals with corporate strategy, rather than treating them as compliance checkboxes.

This push toward ESG transparency will help Indian companies gain credibility in global markets and attract ESG-focused investments, which have been on the rise.

Enhanced IPO Disclosure Framework
SEBI’s reforms also target companies preparing for initial public offerings (IPOs). IPO-bound firms must now adhere to a more detailed disclosure regime:

Expanded disclosures on key performance indicators (KPIs), business risks and promoter background checks.
A dedicated section on ESG compliance history, including any past environmental or labor-related violations.
Justification for use of proceeds from the public issue, with milestone-linked disclosures post-listing.

These reforms aim to reduce post-listing volatility, enhance investor confidence and minimize the risk of corporate governance failures after listing.

Board and Management-Level Certification
SEBI has placed new responsibilities on the board of directors and senior management:

The Chairperson of the Board and the Compliance Officer must now jointly certify the completeness and accuracy of all disclosures made to stock exchanges.
Delayed or misleading disclosures could lead to personal liability, including financial penalties or regulatory action.
The board is expected to have robust internal systems in place to monitor material events and ensure prompt compliance.

These measures place accountability squarely at the top and foster a culture of compliance from the highest levels of management.

Digital Transformation of Disclosure Processes
To enhance accessibility and efficiency, SEBI has launched a centralized digital disclosure portal:

Listed entities must use the platform to file all disclosures, which will be instantly disseminated to exchanges, analysts and investors.
Standardized templates and dropdown menus ensure uniformity and minimize reporting errors.
Investors can subscribe to real-time alerts on updates from specific companies or sectors.

This digital leap will help automate compliance workflows and create an auditable trail of communications, strengthening enforcement capabilities.

Implications for Corporates and Market Stakeholders

These sweeping changes have significant implications across the corporate and investment landscape:

Elevated Compliance Standards
Companies must now adopt sophisticated compliance infrastructures, including integrated legal, finance and ESG teams. Real-time monitoring tools, automated alerts for potential material events, and early-warning systems will be crucial.
Boosted Investor Confidence
Timely, transparent and standardized disclosures reduce uncertainty and build investor trust. International investors, in particular, are more likely to engage with companies that meet global transparency norms.
Greater IPO Readiness
Firms planning to go public can use these guidelines as a blueprint for due diligence, internal audit and governance strengthening. By the time they reach the DRHP stage, much of the groundwork will already be in place.
Heightened Board Involvement
Board members must now proactively engage with compliance and risk functions. Continuous training on evolving regulatory requirements is essential to avoid liability and ensure strategic alignment.

Role of Compliance Professionals and Company Secretaries

The role of Company Secretaries (CS) and Chief Compliance Officers has expanded significantly in the wake of this circular. Key responsibilities now include:

Event Surveillance and Escalation:
Proactively identifying developments that could qualify as material events and ensuring they are promptly reported.
BRSR Coordination:
Working with sustainability, legal and operations teams to compile ESG disclosures for the BRSR.
Board Briefings: Advising the board on potential compliance risks, regulatory changes and stakeholder expectations.
Disclosure Audits:
Periodic review of past disclosures to ensure consistency and completeness and preparing for SEBI compliance audits.

By playing a more strategic and operational role, CS professionals can ensure companies remain ahead of the regulatory curve.

Benefits of the Circular

Improved Market Efficiency
Enhanced disclosure quality and frequency reduce information asymmetry and allow markets to price securities more efficiently.

Investor Empowerment
Retail and institutional investors benefit from clear, accurate and timely information, enabling better investment decisions.

Enhanced Corporate Credibility
Companies that voluntarily exceed the disclosure minimums are likely to enjoy reputational benefits, leading to better valuations and easier access to capital.

Alignment with Global Norms
By adopting international best practices in sustainability and disclosure, Indian companies position themselves favorably with global investors and regulators.

Strategic Recommendations for Companies

To navigate this new regulatory environment effectively, companies should:

Conduct Materiality Workshops:
Train internal teams to assess what qualifies as a material event under the new guidelines.
Appoint ESG Champions:
Establish cross-functional teams responsible for compiling, reviewing and enhancing ESG data quality.
Upgrade IT Systems:
Implement disclosure management platforms with audit trails, real-time alerts and template-based filings.
Strengthen Internal Controls:
Regularly review internal communication channels to ensure that information flows seamlessly from operational teams to compliance officers.

Future Outlook

SEBI’s circular is not just a regulatory update; it signals a paradigm shift in corporate governance and market discipline. As stakeholders demand greater transparency and ethical conduct, Indian companies must adapt to a future where proactive compliance and sustainability are foundational to business success.

Looking ahead, SEBI is likely to expand these reforms to smaller listed entities and extend ESG requirements further into supply chain disclosures. Companies that embrace this evolution will not only mitigate risk but also build long-term value.

Conclusion

Circular No. SEBI/HO/CFD/PoD2/CIR/P/2025/47 is a landmark step in reshaping the disclosure landscape for India Inc. It introduces stringent, forward-thinking reforms aimed at bolstering transparency, strengthening investor protection and elevating India’s standing in global capital markets.

By embedding accountability at every level—from compliance officers to the boardroom and emphasizing sustainability and timely reporting, SEBI is empowering investors and enabling markets to function with greater integrity and efficiency. Companies that align early and thoroughly with these new standards will emerge as leaders in both governance and growth.

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