New Delhi, Dec 31 (PTI) Regulator Sebi on Thursday asked proxy advisors to communicate to clients the material revisions to their reports within 72 hours of receipt of the information, while ensuring that adequate time is available for clients to make an informed decision.

Sebi had come out with procedural guidelines for proxy advisors on August 3.

Proxy advisors provide advice to institutional investors or shareholders of a listed entity in relation to exercise of their rights in the company, including voting recommendation on agenda items.

In August, Sebi had said that proxy advisors shall alert the clients about any factual errors or impending material revisions to their reports within 24 hours of receipt of information but had not specified any timeline for communicating such information.

"Any such material revisions to their reports shall be communicated to the clients within 72 hours of receipt of the information, while ensuring that adequate time is available for clients to make an informed decision," the regulator said on Thursday.

This provision shall be applicable with effect from February 1, 2021.

Through its circular in August, Sebi had asked proxy advisors to share their report with clients and the company at the same time. This sharing policy should be disclosed by proxy advisors on their website.

For giving effect to this requirement, Sebi has extended the date till February 1, 2021.

"Timeline to receive comments from company may be defined by proxy advisors and all comments/ clarifications received from the company, within timeline, shall be included as an addendum to the report," it had said.

If the company has a different viewpoint on the recommendations stated in the report of the proxy advisors, then the latter, after taking into account their viewpoint, may either revise the recommendation in the addendum report or issue an addendum to the report with its remarks, as considered appropriate, it had added.

"All other conditions specified in the Sebi circular ... dated August 03, 2020 shall remain unchanged," Sebi said in its latest circular.

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