SEBI floats consultation paper on market rumour verification norms
Capital markets regulator Securities and Exchange Board of India (SEBI) released a consultation paper on Thursday, December 27, where it suggests that material price movement and not material event as defined under Regulation 30 of the listing regulations should be considered for rumour verification.
SEBI added in its paper that companies need to verify rumours only if share price moves significantly. The key company officials and directors should verify rumour relating to them.
Currently, material events or information specified under Regulation 30 of Listing Obligations and Disclosure Requirements (LODR) Regulations have to be verified, after a rumour on the same has been circulated in mainstream media. The rumour has to be verified within 24 hours of reporting in mainstream media, said SEBI.
According to the paper, the top 100 listed companies will have to verify market rumours from February 1, 2024, while the top 250 firms will have to carry out the exercise from August 1, 2024.
“The rumour verification requirement was introduced to avoid false market sentiment or impact on the securities of the listed entity. There may be many rumours circulating in the market which may or may not have a material impact on the securities of the listed entity. Hence, it was envisaged that only rumours about material events or information should require verification by the listed entity,” said the consultation paper.
The Indian Standard
The market regulator seeks comments on consultation paper on market rumour verification norms by January 18.
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Published: 28 Dec 2023, 07:32 PM IST
