SEBI LODR Regulations
Also called: LODR, Listing Obligations and Disclosure Requirements · Topic: Financial Markets, Instruments, Insurance and Pensions · NCERT: Beyond NCERT
Meaning
The SEBI LODR Regulations, 2015 (Listing Obligations and Disclosure Requirements) are the rules a company must follow once its shares are listed on a stock exchange. They require continuous disclosure, meaning the company must keep telling the public about its results, major events and anything that could move its share price. They also set corporate governance rules: the board must have independent directors (outside members with no business ties to the company), there must be an audit committee, and related-party transactions (deals between the company and its own promoter or parent group) must be checked and approved. These rules protect public shareholders who own part of the company but do not run it.
Example
Suppose the Indian arm of a foreign group lists in India and pays a royalty (a fee to use the brand) to its foreign parent. Under LODR, this is a related-party transaction. The audit committee has to review it, and the company has to disclose it. Public shareholders can then see how much profit goes to the parent. A private subsidiary does not have to make this disclosure.
Don't confuse with
- SEBI ICDR Regulations, 2018: These govern how a company issues shares, through the DRHP, prospectus and IPO process. LODR applies after listing, for as long as the company stays listed.
- SEBI PIT Regulations, 2015: These cover only insider trading, which means trading on unpublished price-sensitive information. LODR covers a listed company's wider disclosure and governance duties.