SEBI, the stock market regulator, has pushed back the deadline for companies to verify market rumors.
Previously, the top 100 companies by market capitalization were required to confirm, refute, or clarify rumors by October 1, 2023. This deadline has now been extended to February 1, 2024.
Similarly, SEBI had mandated that the top 250 companies must address market rumors from April 1, 2024, which has been postponed to August 1, 2024.
SEBI clarified that the deadline for the top 100 companies is February 1, 2024, and for the top 250 companies, it’s August 1, 2024.
Current Practices
Currently, some large companies voluntarily provide clarification regarding information or rumors, often related to acquisitions or appointments.
This information is typically sourced from media reports.
SEBI’s Proposal
Under the new rules, if listed companies confirm any reported information, they must also provide evidence to support it.
In March of this year, SEBI approved this proposal to enhance corporate governance
and disclosure practices, based on recommendations from three advisory consultation letters issued between November 2022 and February 2023.
Expected Impact
Previously, the responsibility of verifying and responding to market rumors rested with listed companies.
This change is expected to improve transparency but may also increase the compliance burden, according to some experts.
