SEBI seeks to amend rules for market rumour verification, floats consultation paper

economictimes.indiatimes.com:

Securities and Exchange Board of India plans to amend certain regulations pertaining to the verification of market rumours.
Regulations about rumour verification were introduced by the capital market regulator to avoid false market sentiment or impact on the securities of any listed entity.

With a view to amend the regulations, SEBI plans to introduce material price movement in security as one of the criteria to verify market rumours rather than material events the, the regulator said in a consultation paper.
For stocks under a high price range, even a smaller percentage variation can lead to a higher price variation in absolute terms.

Hence, for determining material price movement,a lower percentage variation should be considered for securities falling under the high price range and a higher percentage variation should be considered for securities falling under low price range, the paper said.
Further, SEBI plans to introduce a mechanism to ensure that the unaffected price is considered concerning transactions relating to the securities of a listed entity upon confirmation of market rumour.

The regulator also seeks to make it obligatory for promoters, directors, key managerial personnel (“KMP”) and senior management to provide adequate, accurate and timely responses to the queries raised with respect to market rumours by listed entities.
SEBI’s consultation paper further seeks to classify information that was not verified by listed entities as unpublished price-sensitive information (UPSI).