SEBI, the Securities and Exchange Board of India, has introduced new instructions for the top 100 listed companies by market capitalization. These instructions aim to address the impact of rumors on stock performance.
Starting from October 1, these companies are required to confirm, dismiss, or clarify any rumors circulating about them in the market.
SEBI has issued this notification to streamline disclosure requirements and ensure transparency in the stock market.
According to the notification, these companies must respond within 24 hours of receiving information or allegations that are being spread among the investing public through mainstream media channels.
This proactive approach is intended to maintain investor confidence and provide timely clarification on market rumors.
Furthermore, SEBI plans to extend these rules to the top 250 companies, with the implementation scheduled to begin on April 1, 2024.
Currently, the rules apply solely to the top 100 companies, but the aim is to gradually expand their reach.
In addition to addressing market rumors, SEBI is focused on strengthening corporate governance in listed companies. To tackle the issue of certain shareholders enjoying special rights, SEBI has developed a framework.
According to this framework, any special rights granted to shareholders of a listed entity must receive approval from the shareholders in a general meeting through a special resolution.
This approval process is required every five years, starting from the date of granting such special rights.
SEBI’s initiatives aim to enhance transparency, promote investor trust, and ensure robust corporate governance practices in the Indian stock market.
