Industry Standards For Listed Companies To Address Market Rumours Released
Under the new framework, listed companies will be required to address rumours that appear in specified mainstream media platforms.
The Confederation of Indian Industry, in consultation with the Securities and Exchange Board of India, has notified new industry standards for companies to respond to market rumours.
Under the new framework, listed companies will be required to address rumours that appear on specified mainstream media platforms. However, rumours circulating on news aggregators and social media will not necessitate a response from these companies.
The prominent media platforms include newspapers like the Economic Times, Business Standard, Livemint, Financial Express, and Hindu Business Line.
Digital versions of the aforementioned newspapers are included as well. Additionally, certain digital-only business news sources like Bloomberg, BQ Prime (now NDTV Profit), Money Control, Business Today, Business World, Reuters, Reuters India, and the Press Trust of India are covered, provided they meet specific criteria, such as not being behind a paywall and being registered with relevant statutory authorities.
The framework also encompasses several English and vernacular business news channels registered with the Ministry of Information and Broadcasting. These include CNBC TV-18, ET Now, NDTV Profit, CNBC Awaaz, ET Swadesh, Zee Business, and CNBC Bazaar. Their websites are also covered under this framework.
A response is mandated only if the rumour results in a material price movement of the company's stock.
Companies are also obligated to address both merger and acquisition-related rumours and non-M&A rumours, including those stemming from whistleblower complaints or investigations. If there is a rumor about a promoter transaction, companies must verify the information and make the necessary disclosures.
Where details of the deal are not finalised, companies can respond with a general statement saying they're exploring growth opportunities without disclosing specific information. However, in advanced stages where details are clearer, they might need to confirm or deny rumours with more specific information, depending on the situation.
In scenarios where a company isn't directly involved or doesn't know about rumored mergers or acquisitions, it doesn't need to confirm or deny the rumor. Instead, it can disclose that it doesn't have information about the deal and can't confirm or deny it.
If the deal involves the company's promoter, then the company should check with the promoter regarding the rumour. The company must disclose the information received or the lack thereof from the promoter in response to the market rumour. However, this obligation to seek clarification is limited to deals involving the company's promoter, not any other third party or public shareholder.
