Which of the following statements about the detailed corporate governance norms for listed companies issued in April 2014 by SEBI is/are correct? 1. It provides for stricter disclosures and protection of investor rights, including equitable treatment for minority and foreign shareholders 2. Under the new norms listed companies are required to provide the option of facility of e-voting to shareholders on all resolutions proposed to be passed at general meetings Select the correct answer using the code given below. Correct Answer Both 1 and 2 The correct answer is Both 1 and 2. Important Points Introduction of new corporate governance norms was one of the major milestones of the market regulator’s policy initiatives in 2014. The new rules require companies to obtain shareholders’ approval for related-party transactions, establish whistle-blower mechanism and make elaborate disclosures on pay packages. Another decision that will have far-reaching consequences was Insider Trading Regulations. SEBI had widened the definition of insider by including persons connected on the basis of being in any contractual, fiduciary or employment relationship that allows such persons access to unpublished price sensitive information. In a bid to align with the new Companies Act, the Securities and Exchange Board of India’s norms aims at encouraging companies to “adopt best practices on corporate governance.” The market watchdog also unveiled norms to ensure ‘equitable treatment of all shareholders including minority and foreign shareholders’. Hence, statement 1 is correct. Apart from providing adequate and timely information to all shareholders, listed companies should also facilitate the exercise of voting rights by foreign shareholders. Shareholders may also participate in meetings through video conferencing and vote electronically through secure electronic platforms, as the 2014 Rules make it mandatory for listed companies and companies with more than 1,000 shareholders to provide an electronic voting facility to its members for all general meetings. Hence, statement 2 is correct. In a landmark decision, SEBI expanded the framework of the offer-for-sale (OFS) through stock exchange mechanism by allowing non-promoters with over 10 per cent stake. The market watchdog also firmed up regulations that will govern real estate investment trusts (REITs), and infrastructure investment trusts (InvITs). Other decisions include Research Analyst Regulations, conversion of listing agreement into listing regulations and single registration for operating on all stock exchanges.