SEBI: SEBI extended the deadline for verification of market rumors, know when will the new rules come into effect

SEBI: SEBI extended the deadline for verification of market rumors, know when will the new rules come into effect

Sebi new Rule: SEBI has extended the timeline for mandatory verification of market rumors by listed entities in the stock market. SEBI rules said that the top 100 listed entities on the basis of market capitalization will have to verify, confirm, refute or clarify rumors in the market from October 1, 2023. However, now its time has been changed to 1 February 2024.  

Sebi has similarly mandated the top 250 limited entities to compulsorily verify and confirm, refute or clarify market rumors from April 1, 2024, which has now been extended till August 1, 2024. A statement from SEBI said that the provision for the top 100 listed entities by market cap is till February 1, 2024 and for the top 250 listed entities till August 1, 2024. 

What are the rules at present 

At present, some large cap companies file exchange filings on their own volition to clarify information or rumors related to acquisitions or appointments etc. or the information is mostly obtained from news reported in the media. 

< h3 style="text-align: justify;">SEBI had presented the proposal 

Now if the listed units confirm the reported incident or information, then they will also have to provide proof of such incident or information. In March this year, SEBI had approved a proposal to verify market rumors to strengthen the corporate governance and disclosure framework. This was based on the recommendations made in three advisory consultation letters issued by SEBI between November 2022 and February 2023. 

What will be the effect 

It is noteworthy that earlier the listed institutions had the responsibility of verifying and responding to market rumors. This step will increase transparency. However, some say that this will increase the compliance burden. 

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