A market rumour will now no longer remain just a rumour under latest SEBI order
Formation of Industry Standards Forum by SEBI — a pragmatic era in regulation implementation”, I had mentioned that SEBI has introduced a very pragmatic method of drafting standards for implementation of a regulation. In a novel, unique and constructive move, SEBI has invited three of the main industry associations to together form an Industry Standards Forum (ISF) which will assist in designing the implementation standards for some of the proposed regulations. The ISF will work in consultation with SEBI, and the two Stock Exchanges will coordinate these initiatives.
The first project assigned to ISF pertained to devising implementation standards for rumour verification which initially was to come into effect from October 1, 2023. The same was postponed until June 1, 2024, for implementation.
As a result of the ISF deliberations over this period, on Tuesday SEBI has issued a circular for implementation of this requirement. As per the amendment, listed entities are required to confirm, deny, or clarify market rumours, upon material price movement under Regulation 30(11) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This requirement comes into effect for the Top 100 listed entities from June 1, 2024, and for the Top 250 listed entities from December 1, 2024.
The ISF in consultation with SEBI has come up with a guidance note to provide clarity on this requirement. Some of the key highlights of this note are as follows:
1. A rumour is required to be verified only if it
i. is reported
