Sebi considers more disclosures for conglomerates, unlisted entity transactions
New Delhi, Aug 7, 2023
In Short
Sebi plans more disclosures conglomerates
Group-level disclosures may become mandatory for comprehensive information
Market regulator seeks clarity on corporate structures and relationships
Market regulator Securities and Exchange Board of India (Sebi) is taking steps to enhance corporate disclosures and transparency.
In its annual report 2022-23, Sebi revealed plans to mandate more disclosures at the group company or conglomerate level, especially regarding financial transactions involving unlisted entities.
This move aims to provide investors with comprehensive information and manage risks in the securities market ecosystem.
Sebi proposed to make group-level disclosures mandatory, particularly around cross holdings, where publicly-traded companies own stock in other publicly-traded firms.
The goal is to achieve a clearer understanding of corporate structures and relationships.
The broader plan involves reviewing and standardising disclosures made in public offer documents and by listed companies. This aims to streamline information dissemination and foster consistency in reporting practices.
Currently, private companies in India have less rigorous financial disclosure requirements compared to public companies, including those by a listed unit of a privately held conglomerate. Sebi seeks to address this disparity and enhance transparency across the corporate landscape.
"There is a need to identify, monitor and manage the risks introduced into the securities market ecosystem by unlisted companies in a conglomerate with a complex set of listed and unlisted associates," said Sebi.
The regulator acknowledges the need to identify, monitor, and manage risks introduced by unlisted companies in complex conglomerates with both listed and unlisted associates.
Additionally, India plans to review the eligibility criteria for introducing and continuing stocks in the derivatives segment. The last review in 2018 will be reassessed, considering changes in broad market parameters such as size, liquidity, market capitalization, and turnover.
The market regulator is also reviewing its takeover code for mergers and acquisitions to align with global standards, considering feedback from appeals tribunal and the Supreme Court.
[India Today]
