GG News Bureau
Mumbai, 1st June. Effective immediately, the top 100 listed companies by market capitalization are required to confirm or deny any market rumours reported in mainstream media. This regulatory measure, implemented by the Securities and Exchange Board of India (SEBI), aims to ensure transparency and mitigate undue market speculation. Furthermore, this rule will extend to the top 250 companies from December 1, enhancing market integrity and investor confidence.
According to SEBI’s directive, these companies must promptly respond within 24 hours to any reported event or information in the mainstream media that pertains to specific material events and is not of a general nature. The objective is to address rumours circulating among investors and provide clarity on potential market-moving developments.
SEBI has introduced a rumour verification framework as part of this initiative, which excludes price volatility when calculating the average market price for corporate actions. This exclusion ensures fairness for all investors and prevents the exploitation of leaked information that could influence valuation during corporate actions.
Makarand M Joshi, founder of MMJC and Associates, lauded SEBI’s move, emphasizing its role in discouraging information leaks and strengthening the rumour verification framework. By establishing a fair market environment, SEBI aims to attract global investors and bolster market credibility.
Market rumours can significantly impact stock prices and distort true market value, often revolving around aspects such as changes in top management, order cancellations, or financial health. Trivesh, Chief Operating Officer of Tradejini, highlighted SEBI’s framework as a solution to this issue, ensuring transactions are based on unaffected stock prices unless the rumour itself triggers subsequent price fluctuations.
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