Stock Market Regulator SEBI Issues Guidelines To Crack Down Rumors With New Verification Rules

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SEBI guidelines are set to be implemented in phases, affecting the top 250 listed entities by the end of 2024.

Stock Market Regulator SEBI Issues Guidelines To Crack Down Rumors With New Verification Rules (image source: Times Now Digital)

Stock Market regulator the Securities and Exchange Board of India (SEBI) has issued fresh guidelines for verifying market rumours to enhance transparency and investor confidence, This initiative aims to streamline the process and ensure compliance with Regulation 30(11) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations). The guidelines are set to be implemented in phases, affecting the top 250 listed entities by the end of 2024.

Collaboration With Industry Associations

To facilitate the ease of doing business, SEBI collaborated with the Industry Standards Forum (ISF), which includes representatives from three major industry associations: ASSOCHAM, Confederation of Indian Industry (CII), and Federation of Indian Chambers of Commerce and Industry (FICCI). This collaboration, conducted under the aegis of the Stock Exchanges on a pilot basis, has led to the formulation of industry standards for effectively implementing the requirements to verify market rumors under Regulation 30(11) of the LODR Regulations.

“In order to facilitate ease of doing business, theIndustryStandardsForum (“ISF”) comprising ofrepresentatives from three industry associations, viz. ASSOCHAM, CII and FICCI, under the aegis of the Stock Exchanges, on a pilot basis, has formulated industry standards, in consultation with Sebi,for effective implementation of the requirementto verify market rumours under Regulation 30(11) of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”).The industry associations which are part of ISF (ASSOCHAM, FICCI, and CII) and the stock exchanges shall publish the industry standardsnoteon theirwebsites,” SEBI said in a circular

Industry Standards and Compliance

The newly formulated industry standards will be published on the websites of the participating industry associations (ASSOCHAM, CII, and FICCI) and the stock exchanges. Listed entities are required to follow these standards to ensure compliance with Regulation 30(11). These standards aim to provide a structured approach for listed companies to address and verify market rumors, thereby promoting transparency and reducing speculative trading.

Phased Implementation

The requirement to verify market rumors will be rolled out in two phases. Starting June 1, 2024, the top 100 listed entities will need to comply with the new guidelines. This will be extended to the next top 150 listed entities by December 1, 2024. This phased approach allows companies sufficient time to adapt to the new regulations and put in place the necessary mechanisms for compliance.

“The requirement to verify market rumours under Regulation 30(11) of LODR Regulations shall be applicable to top 100 listed entities with effect from June 01, 2024 and to top 250 listed entities (i.e., next top 150) with effect from December 01, 2024 as specified by SEBI circular dated January 25, 2024(link)”, SEBI said in a circular.

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