Sebi's rumour verification rule and its implications
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A new rule by the capital market regulator Securities and Exchange Board of India (Sebi) requires top listed companies to confirm, deny or clarify market rumours reported in mainstream media from June 1. Reena Zachariah looks at what it means for these companies: What's the new Sebi rule on market rumour verification? The top 100 listed companies are required to confirm, deny or clarify market rumours reported in the mainstream media. However, they needn't respond to all kinds of rumours, except those that have a material impact on their share price movements. These include matters such as mergers and acquisitions, health issues of managing directors, leadership changes, and corporate frauds, among other things. They are required to clarify these rumours before the next trading day or within 24 hours of material price movements, whichever is earlier. Do companies need to CLARIFY every rumour floating around? They have to only cla...