SEBI issues ‘unaffected price’ concept, other guidelines for managing stock price impact from market rumors

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Also Read: SEBI may allow mutual funds to invest in overseas funds with exposure to Indian markets ‘’The unaffected price shall be considered for transactions on which pricing norms specified by SEBI or the stock exchanges are applicable, provided that the rumor pertaining to such transaction has been confirmed within 24 hours from the trigger of material price movement,'' said the market regulator. The unaffected price will be considered by excluding the effect on the price of the equity shares of the listed entity due to the material price movement and confirmation of the rumor.

The calculation of adjusted volume weighted average price (VWAP) for considering the unaffected price is as follows: -The variation in daily WAP from the day of material price movement till the end of the next trading day after confirmation of the rumor shall be attributed to the rumor and confirmation of the rumor. -The adjusted daily WAP will be calculated by excluding the WAP variation from the daily WAP in the look back period from the day of the material price movement onwards.

-The adjusted daily WAP from the day of material price movement till the end of the next trading day after confirmation of the rumor shall be same as the daily WAP on the trading day preceding the day of material price movement. Also Read: SEBI recommends regulators to oversee crypto trade, RBI still sees ‘macro risk’ ‘’The unaffected price shall be applicable for a period of 60 days or 180 days, as applicable based on the stage of transaction, from the date of confirmation of the market rumor till the ‘relevant date’ under the existing regulations (public announcement, board approval, etc., as the case may be),'' said SEBI.