Listed firms must disclose their board decisions within 30 minutes, while all other ‘material information’ would need to be made public within 24 hours, SEBI said today as it tightened its corporate disclosure norms and warned of strong penal action for non-compliance.
These disclosures would need to be made “as soon as reasonably practicable”, but not later than the given time limit, SEBI said.
The information, including about material events, would need to be mandatorily disclosed through stock exchange platforms for the benefit of investors, while the companies would have to provide “specific and adequate reply” to queries with respect to rumours and media reports.
Such information would include also those related to ’material’ subsidiaries, while SEBI would also issue an “indicative list of information which may be disclosed upon occurrence of an event,” the regulator said.
The new disclosure requirements are aimed at checking a widespread practice among the Indian companies of selectively leaking the information, including through media and without informing the investors first, for personal gains by promoters and management by way of inflating the valuations in the stock market and before merger and acquisition deals.
The companies would also need to disclose all such information on their websites and they would need to be kept there for a minimum period of five years, while all the disclosures need to be updated on a regular basis.
To bring in these changes, which puts the disclosure requirements in India at par with many developed markets, SEBI’s board today approved changes in its proposed SEBI (Listing Obligations and Disclosure Requirements) Regulations.
Announcing the new norms, SEBI Chairman U K Sinha told reporters that the regulator is strictly monitoring the compliance of disclosure or listing guidelines, which are now being converted into regulations for better compliance.