Sebi asks top 100 listed companies to clarify market rumors from October 1

William2023-03-30
214
Sebi asks top 100 listed companies to clarify market rumors from October 1


The regulator said market rumors must be verified and confirmed, denied or clarified by the top 100 listed entities by market capitalization as of October 1, 2023, and by the top 250 listed entities as of April 1, 2024.

In order to bring more transparency and ensure timely disclosure of material events or information by listed entities, the market regulator Securities and Exchange Board of India (SEBI) introduced new regulations on Wednesday (March 29).

Making amendments to the Registration and Disclosure Requirements (LODR) regulations, SEBI introduced the concept of quantitative thresholds for reviewing the materiality of events/information.

Below is what SEBI believes to be the threshold for considering the materiality of events/information.

Materiality threshold:

The expected value impact exceeds the lesser of the following:

  • 2% of revenue, based on the listed entity’s latest audited standalone financial statements
  • 2% of net worth, based on the listed entity’s latest audited standalone financial statements
  • 5% of the three-year average of the absolute value of the profit/loss after tax, according to the last three audited autonomous financial statements of the listed entity.

    • The watchdog said market rumors should be verified and confirmed, denied or clarified by the top 100 listed entities by market capitalization, as of October 1, 2023, and by the top 250 listed entities as of April 1, 2024. .

    In addition, SEBI stated that there must be a stricter time limit for the disclosure of material events or information for which a decision has been made at the board meeting (within 30 minutes) and from the listed entity (within 12 hours).

    It also approved a regulatory framework allowing private equity funds to become mutual fund sponsors, a move that will help further deepen the mutual fund industry. In addition, the regulator has given its approval to the environmental, social and governance (ESG) disclosure standards of listed companies.

    According to a statement released after the board meeting, SEBI said it had decided to end the practice of people having permanent seats on the boards of listed companies. This move is part of efforts to further strengthen the corporate governance ecosystem.

    SEBI will introduce a fund blocking facility for secondary market transactions similar to initial public offerings (IPOs). The measure aims to protect investors’ money from misuse by securities brokers. The regulator will also put in place a formal mechanism to prevent fraud and market abuse by securities brokers.

    (Edited by : Shoma Bhattacharjee)

    First post: March 29, 2023 7:05 p.m. STI


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