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Informist, Friday, Nov. 7, 2025

 

--SEBI Varshney: SEBI disclosure, Companies Act norms differ slightly

--CONTEXT: SEBI Wholetime Member Varshney's comments at an event in Mumbai 

--SEBI Varshney: SEBI disclosure, Companies Act norms not contradictory 

--SEBI Varshney: Should have review mechanism for regulators, boards of cos 

 

MUMBAI – There are some differences between the Securities and Exchange Board of India's disclosure norms and the rules under The Companies Act, 2013, but they are not contradictory, SEBI Wholetime Member Kamlesh C. Varshney said. The markets regulator often gets complaints about regulatory overlap with respect to the Companies Act, he said.

 

SEBI's Listing Obligations and Disclosure Requirements are more restrictive and require greater compliance, Varshney said at the 10th edition of Gatekeepers of Governance in Mumbai. There is a regulatory overlap when it comes to some norms, including those related to the number of independent directors on a board. Under SEBI's Listing Obligations and Disclosure Requirements, 50% of the members of the board of a listed company should be independent directors if the chairperson is also an executive director while under the Companies Act, a third of the board should comprise independent directors.

 

"So how do we address this regulatory overlap is that if you comply with LODR, you are already in compliance with the Companies Act... The question is why they should be different numbers," Varshney said. This is because the Companies Act focuses on listed as well as unlisted entities while SEBI's norms are only for companies listed in India. The norms help to protect the interest of public shareholders, he said. 

 

The wholetime member also said there should be a mechanism to review the performance of regulators as well as boards of companies. "Because ultimately we all are working in a fiduciary capacity and we should be answerable for whatever actions we are taking," he said. 

 

Speaking about valuations of initial public offerings, Varshney said, "We have seen a lot of IPOs coming where retail investors are challenging the valuation." Valuation should be determined by anchor investors, which is the correct methodology, he added. "Now we think that when anchor investors are doing valuation, SEBI should keep away."  End

 

Reported by Anjana Therese Antony and Shakshi Jain

Edited by Rajeev Pai

 

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