SEBI tightens disclosure norms for listed firms

Capital markets regulator SEBI has tightened disclosure standards for listed companies with strict timelines and introduced criteria for determining the materiality of events.

The new framework will come into effect from July 15, Sebi said in a bulletin on Thursday. .

Under this framework, the regulator required the listed companies to disclose family settlement agreements, which could affect the management and control of these companies on the stock exchanges. These agreements must be disclosed within 12 hours if the listed entity is a party and within 24 hours if the listed entity is not a party.

Furthermore, for material events or information that emerges from the listed entity, including those related to acquisitions, arrangement plan, stock consolidation and stock repurchases, the disclosure timeline by the entity has been reduced from 24 hours to 12 hours.

For information from a decision made at a board meeting, disclosure must be made within 30 minutes of the closing of that meeting.

Besides, timelines are set for 24 hours from the occurrence of the event in the event that information is not issued from within the listed entity. This included a review of classification, fraud or default by a listed entity or its promoter or directors; Restructuring in respect of loans from banks, one-time settlement with a bank, liquidation petition filed by any party/creditors.

On the criteria for determining the materiality of events, SEBI said that one of the criteria is the omission of an event, the value or impact of which is expected to exceed in terms of value by less than 2 percent of the turnover, or 2 percent of the net value according to the latest audited consolidated financial statements or 5 percent of the The absolute average value of the profit or loss after tax, as per the three most recent audited consolidated financial statements of the listed entity.

Regarding guidance on disclosure under the LODR (List of Liabilities and Disclosure Requirements) rules, SEBI said events such as the decision to declare a dividend will be disclosed upon receipt of board approval.

She said that if a preliminary approval or a nod to explore (which is not final approval) was obtained by the company’s board of directors, the same would not require disclosure.