The Securities Exchange Board of India (SEBI) has issued new guidelines to manage the impact of market rumours on the stock markets. These new rules are part of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, amended in 2024.
According to Regulation 30(11) of LODR Regulations, a listed company is required to verify market rumours in the event of a material price movement. Also, stock exchanges are required to issue the framework for material price movement on their respective websites.
In a circular dated 21st may, the capital markets regulator said, “The listed entities shall follow the aforesaid industry standards to ensure compliance with Regulation 30(11) of LODR Regulations.”
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The requirement to verify market rumours will be applicable to top 100 listed entities from June 1, 2024, and to top 250 listed entities from December 1, 2024.
“The requirement to verify market rumours under Regulation 30(11) of LODR Regulations shall be applicable to top 100 listed entities with effect from June 01 2024 and to top 250 listed entities (i.e. next top 150) with effect from December 01,2024 as specified by SEBI circular dated January 25, 2025,” SEBI said.
In another, SEBI said, “In case the price variation due to confirmation of the rumour hits the price band limit on the next trading day post-rumour confirmation, the price variation in the subsequent trading days shall be included for adjustment till such day the price does not hit the band limit”.
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Furthermore, it has been specified that “the unaffected price shall be considered by excluding the effect on the price of the equity shares of the listed entity due to material price movement and confirmation of the rumour.”
The regulator also said that as per second provison to Regulation 30(11) of LODR Regulations, “unaffected price shall be considered for transactions on which pricing norms specified by SEBI or the stock exchanges are applicable, provided that the rumour pertaining to such transaction has been confirmed within 24 hours from the trigger of material price movement.”
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Disclaimer: The above content is for informational purposes only. Please consult a SEBI-registered investment advisor before investing.
