SEBI Issues the Framework for Top Entities to Consider Unaffected Prices in Case of Market Rumours

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  • Last Updated on 23 May, 2024

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SEBI Framework for Top EntitiesImage

Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2024/51; Dated: 21.05.2024

As per Regulation 30(11) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the listed entity is required to verify market rumours, upon material price movement.

Further, as per the second proviso 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.

Now, SEBI has announced the framework to determine an ‘unaffected price’ in case a market rumour gets verified

This circular shall apply to the top 100 listed entities with effect from June 1, 2024, and to the top 250 listed entities (i.e., the next top 150) with effect from December 1, 2024.

The SEBI has prescribed a detailed framework along with an illustration for calculating the unaffected price.

Further, the unaffected price must be considered by excluding the effect on the price of the equity shares of the listed entity due to the material price movement and confirmation of the rumour.

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.

The unaffected price shall be applicable only if the listed entity has confirmed the rumour pertaining to the transaction within 24 hours from the trigger of material price movement.

Further, the unaffected price shall be applicable for a period of 60 days or 180 days, based on the stage of the transaction, from the date of confirmation of the market rumour till the ‘relevant date’ under the existing regulations (public announcement, board approval, etc., as the case may be).

Click Here To Read The Full Circular

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied