No room for rumoursSebi’s new rule for top 100 listed companies

By India Today Business DeskThe Securities and Exchange Board of India (SEBI) has notified new rules that require the top 100 listed companies by market capitalization to offer clarity on any market rumor from October 1, 2023.

Under the new rules, the top 100 companies will have to confirm, deny, or clarify any development reported in the mainstream media. The rule will become applicable to the top 250 listed entities from April 1, 2024.

Increased transparency to protect investors

After the rules come into effect, companies will have to confirm, deny, or clarify any reported event or information in the mainstream media that is not general in nature and indicates that rumors of an impending specific material event are circulating among the investing public. This must be done within 24 hours of the information being reported.

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The new rule will allow for better transparency and help investors make informed decisions. By directing companies to issue a quick clarification on any market rumor, SEBI wants to protect investors, who will be able to make better decisions about whether or not to invest in a particular company.

The rule is also likely to reduce market manipulation by making it more difficult for people or entities to spread false news and misleading information about a company in order to drive up or down the stock price.

Simply put, the new rule will be beneficial for the overall stock market as it will prevent any sudden movement in the prices of major stocks. It will also protect investors and make the market environment more transparent.

From the magazine | Madhabi Puri BuchCapital controller