Nov. 29, 2019

The Securities and Exchange Board of India (SEBI) has approved stricter disclosure norms for listed companies.

Salient features of Norms: 

  • In case of default in repayment of loans beyond 30 days, listed companies will have to disclose the fact of such default within 24 hours. The new default rule will come into force on January 1, 2020.

  • An early disclosure can act as an early warning system, which can help investors make considered decisions on whether to stay on or sell the stock and exit, cutting their losses.

  • It is also expected that the move will lead to greater credit discipline in the banking industry.

Other recent steps by SEBI:

  • SEBI has amended Portfolio Managers (PM) Regulations, 2019 following which net worth requirement of portfolio managers has been enhanced from two crore to five crore rupees.

  • SEBI has approved a proposal to reduce the overall time taken for a rights issue from 55 days to 31 days.

  • Besides, SEBI has also extended the Business Responsibility Report requirement to top 1,000 companies, from 500 currently.