The market regulator, SEBI, has been strictly monitoring the
compliance of disclosure or listing guidelines with the view to
enable the investors to make well informed investment decisions,
which are now being converted into regulations for better
Accordingly, SEBI on March 22, 2015, in its Board meeting, in PR
No. 70/2015, approved the changes in the SEBI (Listing Obligations
and Disclosure Requirements) Regulations pertaining to the
disclosures of 'Material' information by the listed
SEBI in its Board Meeting mentioned that in order to determine
whether a particular event/information is material, the listed
entity shall consider the following criteria:
a) An event/information whose omission will like to result in
discontinuity/alteration of information already available publicly;
or result in significant market reaction if the said omission came
to light at a later date;
b) If in the opinion of the Board of Directors of the listed
entity, the event/information is considered material
Further, it has also been decided that the board of the listed
entity shall frame a policy for determination of materiality, which
shall be disclosed on its website. SEBI will soon specify an
indicative list of information which may be disclosed upon
occurrence of an event.
The Board provided that the decision of board meetings shall be
within 30 minutes of the closure of Board meeting be informed to
SEBI. Apart from this the listed entity shall make the disclosure
of all events/ information, first to stock exchange(s) where the
share of the Company is listed, as soon as reasonably practicable
and not later than 24hours of occurrence of event/information.
In addition to current requirement of making disclosure in time
of occurrence and after the cessation of the event, updation of
disclosure on material developments shall also be made on a regular
basis till such time the event/information is resolved/closed with
explanations wherever necessary.
In a major initiative it was also decided by SEBI that the
listed entities shall disclose on their website all events/
information which is material and such information shall be hosted
for a minimum period of 5 years and thereafter as per the archival
policy of the listed entity, as disclosed on its website.
The requirement of disclosure of all events or information will
be applicable with respect to subsidiary which is material for such
Apart from this, the listed entity shall provide
"specific and adequate" reply to queries of stock
exchange(s) with respect to rumors and may on its own initiative
also, confirm or deny any reported information to the stock
The Board also decided that the existing list of events as
prescribed will be categorized into two parts:
a) Events which are by nature material i.e. those that
necessarily require disclosure without any discretion of the listed
b) Events which shall be construed to be material based on
application of the guidelines for materiality.
The objective behind such tightening of the compliances was due
to the leaking of selective information by the entities that to
through media without informing the investors first. The promoters
and the management would make personal gains by inflating the stock
value before particular events, through this selective information.
Prior to this change, the entities were required to make
disclosures at the time of occurrence and after the cessation of
the event. But now listed entities have to regularly update the
information with respect to the material events on continuous
basis, until the event/information is resolved/closed with
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