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New guidelines: Sebi says listed companies must disclose default in 31 days

The capital market regulator also raised the net worth requirement for PMS (portfolio management schemes) to Rs 5 crore from Rs 2 crore earlier, giving the existing schemes three years to fall in line with the new rules.

Ajay Tyagi, Sebi chairman
Ajay Tyagi, Sebi chairman
Ajay Tyagi, Sebi chairman
Ajay Tyagi, Sebi chairman

The Securities Exchange Board of India (Sebi) on Wednesday allowed listed companies a time of 31 days to disclose a default whether of principal or interest. The new rule comes into effect from January 2020.

“It is an attempt towards openness and better disclosures,” Ajay Tyagi, chairman, Sebi, said.

The capital market regulator also raised the net worth requirement for PMS (portfolio management schemes) to Rs 5 crore from Rs 2 crore earlier, giving the existing schemes three years to fall in line with the new rules.

Market experts said the objective of enforcing a higher net worth was to curb malpractices such as mis-selling and allow only credible players to operate.

The Sebi board also decided that the top 100 listed companies, based on market capitalisation, will now have to include business responsibility reporting as part of their annual reports. This requirement was earlier compulsory only for the top 500 companies.

Sebi also decided to reduce the time taken to process a rights issue to T+31 days from T+55 days earlier. The ASBA facility has been mandatory for any investor applying to a rights issue.

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