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In a significant move aimed at enhancing transparency and protecting investors, the Securities and Exchange Board of India (SEBI) has mandated that all top 250 listed companies take proactive measures to address rumours that could influence their share prices from 1st December 2024. This regulation is particularly relevant in contexts such as mergers and acquisitions, fraud allegations, leadership changes, or fluctuations in financial performance. With this framework, SEBI is not only pushing for accountability but also aiming to foster a more stable investment environment.

The Essence of the Regulation 

Under the new guidelines, companies are required to verify, deny, confirm, or clarify any rumours that may arise in national and international business media, dailies, or social media platforms. These rumours can significantly sway market perceptions and, consequently, stock prices. SEBI emphasizes the importance of timely communication, mandating that companies respond before the next market day starts or within 24 hours if a rumour could materially impact share prices. Non-compliance could lead to hefty fines ranging from ₹1 lakh per day to a staggering ₹1 crore.

To calculate the “unaffected price,” SEBI employs a volume-weighted average price method. This approach helps adjust share prices by excluding movements caused by rumours, providing a clearer picture of a company’s performance.

The Importance of Monitoring 

With the volume of information available today, tracking rumours has become increasingly complex. Companies must actively monitor a variety of sources, including:

  1. National and International Business Newspapers: Traditional media remains a powerful influencer in shaping public perception. Companies need to keep an eye on news articles, editorials, and analyses that could hint at market rumours.
  1. Public Conversations: Social media platforms are breeding grounds for speculation. Verified accounts can spread information rapidly, making it crucial for companies to stay vigilant.
  1. Financial Performance Indicators: Monitoring share price movements against market indices is essential to detect unusual fluctuations that could arise from rumours.

How AGR Knowledge Services Can Help 

At AGR Knowledge Services, we understand the challenges companies face in adhering to SEBI’s new regulations. Our suite of services is designed to ensure that your organization not only complies with these requirements but also protects its reputation and investor trust.

  1. Real-Time Share Price Monitoring: Our in-house tracking tool provides real-time analysis of your share price movements, benchmarked against market indices. This enables us to detect unusual fluctuations promptly, allowing for immediate action.
  1. Comprehensive Media Tracking: We systematically track mainstream media as defined by SEBI. Our advanced in-house G8 Listening tool scans various digital platforms, ensuring accurate identification of potential rumours that could impact your share prices. By maintaining this oversight, we help safeguard your company against unexpected market shifts.
  1. 24-Hour Compliance Mechanism: Our services include establishing a mechanism that helps listed entities comply with SEBI’s requirement for timely responses to rumours. We provide tailored solutions to ensure you can clarify any misinformation within the stipulated timeframe, thereby minimizing risk and enhancing stakeholder trust.

Conclusion 

As December 1st approaches, it’s crucial to start lining up your teams to ensure compliance with SEBI’s new regulations. At AGR Knowledge Services, we have experienced teams that have successfully supported numerous large Indian enterprises—including banks, steel and mining companies, FMCG firms, automotive giants, and major conglomerates.

Don’t wait until the last minute—let us help you navigate these changes seamlessly and protect your reputation. Reach out today!