SEBI proposes system-driven disclosure regime for listed firms

To aid better price discovery and reduce the likelihood of manipulation and insider trading, SEBI proposes to review the existing regulatory framework on continuous disclosures for listed entities.

This includes closer monitoring of listed companies and implementation of SEBI’s requirements on Corporate Governance.

The regulator also plans to create the compliance culture amongst listed companies.

The proposals are to provide a level playing field to investors by way of timely, adequate and accurate disclosures as SEBI observed that listed entities were following a different set of standards.

SEBI said “this is expected to enable the investors to make well informed investment decisions.”

The regulator also plans to implement the concept of system-driven disclosures — which seeks to disclose the changes in shareholding in a listed company by automatically gathering and integrating information from available sources in a timely and accurate manner.

For this, SEBI wants disclosures made under different regulations to be integrated so as to reduce repeating the same disclosure.

This, SEBI said, could help in monitoring compliance on a real-time basis while reducing the burden of compliance on individuals.

SEBI has set up a committee to review the adequacy and quality of disclosures made along with the application form (including prospectus and abridged prospectus).

This panel will also revisit the structure, design, format, content and order of information so as to ensure that the materially important information is provided in a structured and user-friendly manner.

“While the work regarding the review of bid-cum-application form, company specific disclosures for abridged prospectus and issue of General Information Document has been completed, the work relating to review of disclosure requirements in the Red Herring Prospectus is underway,” SEBI said.

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