Market regulator Securities and Exchange Board of India (Sebi) will soon come out with a detailed set of rules and guidelines on disclosures to be made by listed companies, this is being done to ensure stricter compliance by companies.
Speaking at a conference on ‘Capital Market Frauds and Malpractices: Genesis, Resolution and Prevention organised by the PHD Chamber here on Thursday, Sebi Chairman UK Sinha said consultations were ‘almost complete’ regarding disclosures by the companies.
“We are going to ensure that timely disclosures are made and quality disclosures are improving,” Sinha said.
He also cautioned that if disclosures from companies do not improve despite the guidelines, “resultant actions will follow” including possible penalties. Consultations (with stock exchanges) are almost over and very soon we are going to announce that (guidelines), he added.
The regulator has initiated several steps in the recent past to ensure that investors’ interest, especially those of small investors are protected.
With regard to the issue of disclosures by listed companies, Sebi has also set up a cell which will look into the disclosure norms.
“We have to strike a balance between prevention of fraud and the need for market development,” Sinha noted.
“Sebi Act gives enough right and powers to act... If there is something in violation of the rules, penalties are possible,” Sinha added.
The capital market regulator would be mainly looking at aspects of non-disclosures by entities as well as the quality of disclosures by them.
“There is a question mark on what happens when a company does not make a disclosure and what happens to the disclosures filed with the stock exchanges...,” Sinha said.