The Securities and Exchange Board of India (“SEBI”) by way of its circular, dated August 4, 2020 (“Grievance Redressal Circular”), had provided that in order to address the grievances of listed entities against proxy advisors, listed entities can approach SEBI. SEBI noted that due to the inherent nature of the work of proxy advisors, where they advise institutional investors and shareholders of a listed entity on voting recommendations on agenda items etc., difference of opinion may arise between the proxy advisors and listed entities on these agenda items, leading to certain grievances.
Accordingly, the Grievance Redressal Circular provided that SEBI will examine such grievances to assess non-compliance by proxy advisors with the provisions of code of conduct under the SEBI (Research Analyst) Regulations, 2014 and the procedural guidelines issued by SEBI for proxy advisors.
The Grievance Redressal Circular was to become applicable from September 1, 2020. However, in view of the market conditions prevailing due to the CoVID-19 pandemic and representations received from the registered proxy advisors, SEBI has vide its circular dated August 27, 2020 (“Extension Circular”) provided that the Grievance Redressal Circular will now become applicable with effect from January 1, 2021.
Please find a copy of the Grievance Redressal Circular here and a copy of the Extension Circular here.
This update has been contributed by Aastha (Partner) and Swaraj Singh Narula (Associate).
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