Firms must disclose price-sensitive info to bourses first: Sebi

Banks providing application supported by blocked amount facility for public offers told to use their accounts in other banks while making own applications
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First Published: Thu, Jan 03 2013. 08 06 PM IST
Sebi also advised stock exchanges to take into account the requirements of the circular and bring the same to the notice of the listed companies. Photo: Mint
Sebi also advised stock exchanges to take into account the requirements of the circular and bring the same to the notice of the listed companies. Photo: Mint
Mumbai: Listed companies will now have to necessarily disclose all price-sensitive information, including monthly sales figures, to bourses first, market regulator Sebi (Securities and Exchange Board of India) said on Thursday.
“...all the events or material information which will have a bearing on the performance/operations of the company as well as price sensitive information shall be first disseminated to the bourse as required under Clause 36 of the Listing Agreement,” Sebi said in a circular.
The regulator said it has noticed certain listed companies giving monthly disclosure of their sales/turnover/production figures to their “respective trade bodies” and the same is not disclosed to the bourses.
The information considered to be ‘price sensitive´ as per the guidelines include, any change in nature of business, disruptions due to natural calamity, commencement of commercial operations, developments arising out of change in regulatory framework, litigation or disputes having a material impact and revision in credit ratings.
Sebi also advised stock exchanges to take into account the requirements of the circular and bring the same to the notice of the listed companies.
As per the clause 36 of the Agreement, listed firms are required to the concerned bourses immediately of events such as strikes, lock-outs, closure on account of power cuts and all events which would have a bearing on the performance as well as prices. This has to be done both at the time of occurrence of the event and subsequently after the cessation of the event.
The announcements are necessary in order to enable the security holders and the public to “appraise the position of the the company and to avoid the establishment of a false market in its securities.”
“In addition, the issuer will furnish to exchange on request such information concerning the Issuer as the exchange may reasonably require,” the Listing Agreement said.
In another devlopment the regulator said self-certified syndicate banks (SCSBs) applying for public or rights issues through applications supported by blocked amount (ASBAs), should do so only through a separate account in their name held with any other Sebi-registered SCBs and not from their own accounts.
Asba is a facility in which money will be held in the investors’ bank account, to be released only after the shares are allotted. The funds are debited from the applicant’s bank account when the allotment takes place and are transferred to the issuer’s account. Meanwhile, the investor continues to earn an interest on the blocked amount.
“It has been reported that some banks/merchant Bankers are misinterpreting the aforesaid circular and the applications by banks have been made/accepted using an account held with the applicant bank itself,” the market regulator said in a circular.
“Such account shall be used solely for the purpose of making application in public issues and clear demarcated funds should be available in such account for ASBA applications,” the regualator added.
Sebi introduced Asba facility for public offers in September 2008 to avoid investors’ money getting blocked between the time of bidding for shares and final allotment.
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First Published: Thu, Jan 03 2013. 08 06 PM IST
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