Corporates would be required to disclose non-events such as loss of market share or technology obsolescence on a periodic basis (annually to start with) to shareholders through an exchange filing.
Outlining the future of corporate disclosures at an event in Mumbai today, Prashant Saran, Whole-Time Member, SEBI, said that companies would have to incorporate such information in the annual information memorandum and periodically update the prospectus filed by them at the time of their IPOs.
This, Saran said, would provide secondary market investors with updated information besides enabling companies to file for future capital raising in the form of rights or further public offerings (FPO).
"Right now the imperative is to build trust as a lot of trust has been lost in the last decade, we have to build it assiduously.We have been reviewing Clause 36 of the listing agreement (for timeliness and adequacy) and have suggested that corporates disclose all material events in a manner such that investors will get a meaningful understanding," Saran said.
SEBI's discussion paper dated August 19,2014 is expected to be taken up during the SEBI's next board meeting likely to be held this month.
Clause 36 of the equity listing agreement requires a listed entity to disclose the details of all events which will have a bearing on the performance/operations of the listed entity as well as price sensitive information to stock exchanges immediately. This usually consists of information on events such as strikes, lock-outs, closure on account of power cuts and the like.