What are these regulations?
Regulation 42 acts as a guideline for all listed entities on intimation of record date during declaration of dividend, issue of bonus or right shares and other corporate actions like mergers, de-mergers, stock splits, among others.
Regulation 42(2) says the listed entity shall give notice in advance of at least seven working days (excluding the date of intimation and the record date) to stock exchanges of record date specifying the purpose of the record date.
Regulation 42(3) says the listed entity shall recommend or declare all dividend and/or cash bonuses at least five working days (excluding the date of intimation and the record date) before the record date fixed for the purpose.
Regulation 26 pertains to giving prior intimation to stock exchanges about the meeting of board of director for proposals such as declaration of dividends, financial results, among others.
Regulation 29(2) says the intimation shall be given at least two working days in advance, excluding the date of intimation and date of the meeting.
Why were these exemptions sought?
On March 22, Indian Oil, HPCL and BPCL made a stock market announcement that their board would meet the next day to declare second interim dividend. Without the exemptions, these companies wouldn’t have been able to conduct the board meeting the next day. Further, the record date for the dividend was fixed at March 27—a gap of just one working day. Had Regulation 42(2) been applied, the record date would have been April 3. As a result, the payout would have taken place next fiscal and impacted government’s budget estimates for 2016-17.