Stock exchanges have issued guidelines to identify “material price” movement for top 250 companies by market value to verify market rumours after the recent mandate by the Securities and Exchange Board of India.
On Tuesday, Sebi issued guidelines for mitigating the impact on stock prices due to market rumours, requiring a listed entity to confirm, deny, or clarify any media reported information that leads to a ‘material price’ movement of the shares.
The guidelines issued by the exchanges apply only if the price movement is in the direction of the news, and need to be benchmarked against the respective key indices. Further, the percentage variation in share price and the benchmark index movement are to be calculated from the closing price of the immediate preceding trading day.