Proposed Changes to Reporting Material Developments

INTRODUCTION AND BACKGROUND

SEBI has proposed changes to the provisions related to reporting of material events/developments by listed entities. These provisions are contained in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Regulations” or “the LODR Regulations”).

Timely reporting of material events and developments with regards to listed entities is important for several reasons. It puts an end to speculation and gossip due to leaks, guesswork (informed or otherwise) or even media reports. It informs the investors and public of important developments in a timely way to enable them to take their decisions factoring these into account. Hence, they do not have to wait for the financial statements released within about one and half months at the end of every quarter, which, while have much improved over previous annual reporting, are still considered late if major developments take place between two such reporting dates.

Further, reporting right from the proverbial horse’s mouth, is more reliable than market gossip. Indeed, as we will see, while there are already some provisions related to reporting by listed entities to reports/rumors in the market, the proposed provisions now require mandatory reporting by certain listed entities.

Repor