SEBI Disclosure Norms

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Context

The Securities & Exchange Board of India (SEBI) mandated that large listed companies must confirm or deny price-sensitive market rumours, and in the case of material board decisions disclose the same to the stock exchanges within 30 minutes.

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Details

To bring more transparency and to ensure timely disclosure of material events or information by listed entities, the SEBI board made it mandatory for the top 100 listed companies by market capitalisation to verify, confirm or deny or clarify any market rumours.
This would come into effect from October 1, 2023.
And in the case of the top 250 listed entities by market capitalisation, the deadline to adhere to this norm would be April 2024.
The markets regulator has also made it mandatory for upstreaming of clients’ funds by stock brokers and clearing members to Clearing Corporations.

Significance

This move is aimed at protecting retail investors’ funds in the secondary market.
This will mitigate credit risk on intermediaries and risk of potential misuse of clients’ .

PRACTICE QUESTION

Q. What is the role of SEBI in in promoting investor protection in Indian Economy? Comment.