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Market regulator SEBI’s move to get listed companies to step up disclosures and to empower shareholders are steps in the right direction, but their impact depends entirely on how compliance evolves.
SEBI has struck the right notes with its recent pronouncements on disclosures and shareholder empowerment. It has called for swifter reporting of developments—board meeting outcome to be disclosed within 30 minutes of it ending and internal developments to be reported within 12 hours.
It has also asked the top 100 corporates to prepare to respond by accepting or denying all queries on market rumours with effect from October 1 this year. The span of this rule will be expanded to cover the top 250 companies by market capitalisation from April 1, 2024.
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SEBI has also attempted to try and prevent subjectivity in determining the materiality of an event to be reported by prescribing quantitative criteria. This even as it looks to give more powers to shareholders by making permanent board seats and perpetual rights to certain shareholders a thing of the past, with their continuation requiring shareholder approval. This even as it has capped the time limit for a listed company to appoint a Director, CXO or Compliance Officer at 3 months, following such a position falling vacant.