To improve the quality of corporate disclosures, stock market regulator SEBI has said that all price-sensitive information has to be disclosed by listed companies within one day of occurrence of the event unless otherwise expressly stated.

On Tuesday, the regulator put out a discussion paper reviewing Clause 36 of the listing agreement for the first time since its introduction in 1998.

This clause deals with dissemination of price-sensitive information by listed companies to stock exchanges.

The paper aims at plugging gaps in the definition of what constitutes price sensitive information, besides doing away with lack of uniformity in disclosures and hence minimising information asymmetry. The paper also clarifies the timing and adequacy of such disclosures by corporates.

Suitable explanation has to be provided for delayed disclosures besides specifying events which are material and/or information which are price sensitive.

Listed companies have to disclose such events/information to exchanges at the time of occurrence, make periodic disclosures on associated material developments till such time the event is resolved/closed.

For instance, in case of a factory lock-out, the company has to inform the date of lock-out, information regarding labour negotiations which would impact the stock price and the resumption of production as part of a wage settlement.

Any changes such as withdrawal/cancellation have to be disclosed to exchanges and on the company website with links to exchanges (in this case, a strike called off).

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