Sebi panel suggests audio/video recordings of post-earning calls should be available in 24 hours2 min read . Updated: 20 Nov 2020, 03:23 PM IST
The panel has also suggested that written transcripts of post-earning conference calls should be made available on websites of listed companies and respective stock exchanges within five working days
In order to address the information asymmetry among shareholders, a Securities and Exchange Board of India (Sebi) panel has recommended that listed companies should make available audio and video recordings of post-earning conference calls on their websites as well as stock exchanges within 24 hours or before the next trading day.
"Audio/ video recordings shall be made available on the website of the listed entity and respective stock exchanges immediately after the post-earnings conference call/ quarterly call, before the next trading day or within 24 hours from the occurrence of event or information, as required under the ...Sebi (LoDR) Regulations, 2015, whichever is earlier," the report said.
The panel has also suggested that written transcripts of post-earning conference calls should be made available on websites of listed companies and respective stock exchanges within five working days after such calls.
The recommendations have been made in a report on disclosures pertaining to analyst meets, investor meets and conference calls, prepared by a sub-group headed by HDFC Vice Chairman and CEO Keki Mistry.
The panel noticed that "though certain companies have an elaborate mechanism in place to effectively disclose information to shareholders, there are many listed companies which lack such procedures or deal with the disclosure requirement as more of tick of the box compliance".
While many listed companies disclose the occurrence of institutional investors meet or conference call with analysts, it has also been noticed that they do not divulge the details of what transpired in such meetings.
Minority shareholders, who do not attend these meetings, are not privy to the information shared with a select group of investors, thereby creating information asymmetry among different classes of shareholders, according to the sub-group.
Further, listed companies should make available audio or video recordings and the written transcripts on their websites for at least eight years in addition to the details disseminated on respective stock exchanges.
The recommendations should be made applicable in a phased manner. The requirements should be initially recommendatory for a period of one year and mandatory thereafter for all listed companies, as per the report.
The panel noted that listed companies can decide as to whether conference calls are open to everyone to attend or limit such calls to their existing shareholders.
Listed companies should provide number of one-to-one meetings with select investors as part of corporate governance reports submitted by them to stock exchanges on a quarterly basis along with affirmation that no Unpublished Price Sensitive Information (UPSI) was shared by any official of the company in such meetings, the report said.
Further, company should maintain a record of all such one-to-one meetings, as the same could be required for future reference. The data should be preserved for a period of at least eight years, it added.
The Sebi has sought comments from public on the panel's recommendations till 21 December.