SEBI Introduces Changes to Market Capitalisation Computation and Rumour Verification Regulations

The Securities and Exchange Board of India (SEBI) has revised its Listing Obligations and Disclosure Requirements (LODR) regulations, impacting market capitalisation computation and market rumour verification protocols. The new method calculates average market capitalisation from July 1 to December 31, determining regulatory provisions' applicability from the next financial year. \r

This change affects ten LODR provisions, including requirements for independent women directors, risk management committees, and AGM protocols. Additionally, SEBI mandates top 100 and 250 companies by market capitalisation to verify market rumours within 24 hours of a significant price movement (MPM). Companies must promptly confirm or deny rumours following predefined MPM thresholds based on daily price movements.\r

Effective May 17, 2024, these regulations require companies to monitor market activities and media reports vigilantly, ensuring rapid and accurate information dissemination. Compliance officers must oversee these processes, potentially implementing technology solutions to detect MPMs and verify rumours.