Corporate Transparency Boost: SEBI Extends Norms Implementation to 2024

The Securities and Exchange Board of India (SEBI) has extended the implementation deadlines for two major initiatives: Regulation 30(11) of SEBI (LODR) Regulation, 2015, concerning the confirmation, denial, or clarification of market rumors by listed entities, and Circular SEBI/HO/OIAE/IGRD/CIR/P/2023/156, focusing on the redressal of investor grievances through the SEBI Complaint Redressal (SCORES) Platform.

  1. Extension for Regulation 30(11) of SEBI (LODR) Regulation, 2015:

    • Original Directive: This regulation, introduced through an amendment, required the top 100 listed entities by market capitalization in India to confirm, deny, or clarify market rumors to the mainstream media, originally effective from October 01, 2023. It was to extend to the top 250 listed entities from April 01, 2024.
    • New Deadlines: For the top 100 listed entities, the deadline has been moved to February 1, 2024, and for the top 250 listed entities, to August 1, 2024​​.
    • Rationale and Response: The amendment originated from a proposal approved at the SEBI Board Meeting on March 29, 2023, following a consultation paper released on November 12, 2022. SEBI received 71 comments on the consultation paper, with 52 expressing dissent, particularly in cases involving acquisition deals. SEBI referred to regulatory requirements in developed foreign securities markets to justify its steps, emphasizing the prevention of false market sentiment and its adverse impact​​.
  2. Extension for Circular SEBI/HO/OIAE/IGRD/CIR/P/2023/156:

    • Original Implementation Timeline: This circular, dated September 20, 2023, outlined provisions related to the redressal of investor grievances through the SCORES Platform, initially set to be in force from December 04, 2023.
    • Extension Details: The new deadline for implementation is April 01, 2024. This circular also rescinds the Master Circular on the redressal of investor grievances through the SCORES platform, effective from the same date.
    • Obligations and Authority: Despite the extension, entities must submit the Action Taken Report (ATR) on SCORES within 21 calendar days from receiving a complaint. The circular is issued under the powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992​​.
  3. Implications and Overview:

    • Strengthening Corporate Governance: The rule regarding market rumors aims at enhancing the corporate governance of listed entities. Listed companies are required to confirm, deny, or clarify any market rumor reported in the mainstream media within 24 hours from the reporting of the information​​.
    • Strategic Importance: These initiatives indicate SEBI’s proactive approach in aligning India’s regulatory framework with international standards, emphasizing investor protection, market integrity, and transparency.

In summary, SEBI’s decision to extend these deadlines reflects a balanced approach, considering feedback from stakeholders and the need for adequate preparation time, while reinforcing its commitment to improving market regulation and investor protection.



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