Rumour verification deadline to be extended, still gathering data for delisting norms: Sebi's Buch

Sebi Chair Madhabi Puri Buch said that they were working on a comprehensive framework to address the use of mule accounts.

The deadline for rumour verification will be extended further, Chairperson of the Securities and Exchange Board of India (Sebi) said.

Speaking to the media on the sidelines of the conference organised by the Association of Investment Bankers of India (AIBI), Madhabi Puri Bucht also talked about other awaited amendments such as delisting norms and the rolling out of the Mutual Fund Lite framework.

Also read: Rs 24 crore from hot air? How to buy shares with land you don't have and sell a business that isn't one

The deadlines to implement the rumour-verification proviso under Sebi's Listing Obligations and Disclosure Requirements (LODR) Regulations were February 1, 2024, for the top 100 companies by market capitalisation and August 1, 2024, for the top 250 companies. They would have had to mandatorily verify and confirm, deny or clarify market rumours from these deadlines, going by Sebi's September 30, 2023, circular.

On November 22, Moneycontrol had reported that the rumour-addressal mandate for listed entities was unlikely to be implemented in its current form, as it would cause legal and operational difficulties for companies.

This was confirmed on December 28, 2023, when the regulator floated a consultation paper after speaking with industry stakeholders. The paper sought to modify these norms to consider material price movement to verify rumours instead of material events under Regulation 30 of LODR Regulations and to consider the relevant date for determining the pricing of the scrutinised transaction as the date on which the listed entity confirms the rumour.

The public comments were asked to be sent in by January 18.

At the media meeting, Buch said that since the meeting with Sebi's Board will not be held in January as was earlier planned, because of various reasons, the deadline for rumour-verification implementation will also be extended.

Also Read: 68% HNIs, 43% retail investors flip IPO trades in first week, says Sebi chair Madhabi Buch

Amendments to delisting norms had been expected after the November 25 Board meeting. However, after the meeting, Buch said that the data was too limited to draw significant conclusions and therefore the Board asked the regulator to go back and consult further.

Buch said she is yet to receive the additional data from the team. "We don't have enough data to go back to the Board with it," she said. Therefore, the amendments to the delisting norms may be delayed further.

On MF Lite, a less stringent MF framework to enable fund houses to innovate more in the passive-fund segment, Buch said that it is part of the team's March KRA (Key Result Area). It wasn't clear if the regulator's team would be floating a consultation paper on the framework by then or have the framework ready by then.

On other concerns that the regulator needs to address, Buch said that they were working on a comprehensive framework to address the use of mule accounts.

Also read: Sebi's department heads to use Gen AI to help with compliance monitoring

When asked how the regulator is planning to address shareholders' complaints about losing ownership of securities that are held in the physical form because of weak compliance at the Registrar and Transfer Agents (RTAs), Buch said that she wasn't aware of this and made a note of looking into this as well. "We will be looking at how to strengthen the (regulatory framework for) RTAs," she said.