Sebi issues framework for verification of market rumours by listed entities
The listed entities will now have to follow the industry standards to ensure compliance. Further, the exchanges are advised to bring the contents of this circular to the notice of companies and ensure its compliance. Further, in another circular Sebi has also revamped the method for calculating the market capitalisation of listed companies.
Industry associations have formulated a framework for the effective implementation of verification of market rumours under .The regulator in a notice said the above move facilitates .
The industry associations that are part of the Industry Standards Forum (Assocham, FICCI, and CII) and the will publish the standards notes on their websites.
The regulator specified that if there are material changes in stock prices due to rumours, listed entities must verify and respond to these rumours.
The listed entities will now have to follow the industry standards to ensure . Further, the exchanges are advised to bring the contents of this circular to the notice of companies and ensure its compliance.
The requirement to verify market rumours will be applicable to the top 100 listed entities with effect from June 01, 2024, and to the top 250 listed entities from December 01, 2024.
Further, in another circular has also revamped the method for calculating the of listed companies. Instead of using the market capitalisation of a single day (currently March 31), listed companies will now use the "" for a six-month period.
Market experts believe the market capitalisation of a listed entity keeps fluctuating daily based on and, therefore, an average of market capitalisation figures over a reasonable time (six months) would more accurately reflect the market size of the listed entity and consequently the , vis-a-vis its peers.
The changes came after a recommendation of an chaired by Sebi's former whole-time member S K Mohanty in a bid to promote ease of doing business. The amendment aims to specify a defined period for calculating average market capitalisation.
The new amendment would come into force with effect from December 31, 2024, the Securities and Exchange Board of India (Sebi) said in a notification on May 17.
To maintain uniformity, the timeline for prior intimation of board meetings has been harmonised to two working days for all types of events.
Current LODR regulations require a listed company to inform stock exchanges about board meetings for certain proposals such as financial results, share buyback, fundraising, etc, within 2-11 working days.
Source: Stocks-Markets-Economic Times
