SEBI Issues the Framework for Top Entities to Consider Unaffected Prices in Case of Market Rumours

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Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2024/51; Dated: 21.05.2024

As per Regulation 30(11) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the listed entity is required to verify market rumours, upon material price movement.

Further, as per the second proviso to Regulation 30(11) of LODR Regulations, unaffected price shall be considered for transactions on which pricing norms specified by SEBI or the stock exchanges are applicable, provided that the rumour pertaining to such transaction has been confirmed within 24 hours from the trigger of material price movement.

Now, SEBI has announced the framework to determine an ‘unaffected price’ in case a market rumour gets verified

This circular shall apply to the top 100 listed entities with effect from June 1, 2024, and to the top 250 listed entities (i.e., the next top 150) with effect from December 1, 2024.

The SEBI has prescribed a detailed framework along with an illustration for calculating the unaffected price.

Further, the unaffected price must be considered by excluding the effect on the price of the equity shares of the listed entity due to the material price movement and confirmation of the rumour.

In case the price variation due to confirmation of the rumour hits the price band limit on the next trading day post rumour confirmation, the price variation in the subsequent trading days shall be included for adjustment till such day the price does not hit the band limit.

The unaffected price shall be applicable only if the listed entity has confirmed the rumour pertaining to the transaction within 24 hours from the trigger of material price movement.

Further, the unaffected price shall be applicable for a period of 60 days or 180 days, based on the stage of the transaction, from the date of confirmation of the market rumour till the ‘relevant date’ under the existing regulations (public announcement, board approval, etc., as the case may be).

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