The Securities and Exchange Board of India (SEBI) has implemented a new framework that imposes a "stricter timeline" for listed companies to disclose material events or information. The move aims to enhance transparency and ensure prompt dissemination of crucial information in the capital markets.
Effective immediately, SEBI has directed listed entities to disclose family settlement agreements within 12 hours if they have an impact on the management and control of the company. Moreover, the timeline for disclosing material events such as acquisitions, scheme of arrangement, share consolidation, and buyback of securities has been reduced from 24 hours to 12 hours.
In the case of information originating from a board of directors' meeting, the disclosure must be made within 30 minutes following the conclusion of the meeting. Additionally, SEBI has provided specific criteria for determining the materiality of events, taking into account turnover, net worth, and profit or loss.
The regulator clarified that the value of an event should be evaluated without considering its positive or negative sign. This clarification ensures that the threshold for determining the "materiality" of an event is based solely on the absolute value of profit or loss and not influenced by any commercial considerations.
These measures are aimed at strengthening corporate governance practices and ensuring that investors have timely access to relevant information. By enforcing a stricter timeline for disclosure, SEBI intends to enhance market transparency and safeguard investor interests.
Market participants and listed entities are advised to adhere to the new disclosure guidelines to avoid regulatory penalties. SEBI will closely monitor the implementation and impact of these measures to maintain a fair and transparent market ecosystem.
