First Notes - 17 August 2018

First Notes - 17 August 2018

SEBI issues a consultative paper on revision of provisions relating to reclassification of promoters


Currently, Regulation 31A of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) permits reclassification of promoters of listed entities as public shareholders in different scenarios, subject to the specified conditions.

The Kotak Committee on Corporate Governance in its report to SEBI (Kotak Committee) provided certain recommendations which were aimed towards rationalising the existing norms pertaining to professionally managed entities and to introduce a new requirement which could enable one of multiple promoters to get reclassified as a public shareholder. However, as several concerns were raised on the recommendations, SEBI decided to revamp the existing provisions governing reclassification of promoters/classification of entities as professionally managed.

Accordingly, on 24 July 2018, SEBI issued a consultative paper and proposed revision to the existing provisions of Regulation 31A of the Listing Regulations (consultative paper).

This issue of First Notes provides an overview of the revisions made to the provisions relating to reclassification of promoters.

To access the text of the consultative paper issued by SEBI, please click here

© 2023 KPMG Assurance and Consulting Services LLP, an Indian Limited Liability Partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

KPMG (Registered) (a partnership firm with Registration No. BA- 62445) converted into KPMG Assurance and Consulting Services LLP (a Limited Liability partnership firm) with LLP Registration No. AAT-0367 with effect from July 23, 2020.

For more detail about the structure of the KPMG global organization please visit

Connect with us