SEBI Plans To Revisit Directive On Loan Default Disclosure
SEBI s looking to frame a new plan for listed firms to disclose loan defaults to exchanges as soon as they occur.
The Securities and Exchange Board of India is considering revisiting its directive on ‘loan default disclosure’, which will make it mandatory for listed companies to inform stock exchanges about such issues as soon as they occur.
During the meeting this week, SEBI is also expected to appraise its board about the probe into the circulation of unpublished price sensitive information about various listed companies through WhatsApp messages and other private social media groups. The board will also consider tweaking insider trading norms to tackle such information leaks, senior officials said.
The market regulator has already launched a probe after reports recently indicated that price sensitive information relating to major companies listed in Indian stock exchanges were being circulated in WhatsApp groups, prior to the public announcement of quarterly results.
Circulation of unpublished price sensitive information and trading based on such information in the securities market is prohibited under the SEBI Insider Trading Regulations.
Last week, the regulator had conducted searches at premises of more than 30 market analysts and dealers and seized documents, computers, mobiles and laptops. This is one of the biggest operations since SEBI got the search and seizure powers.
Meanwhile, the markets watchdog is looking to frame a new plan for listed companies to disclose loan defaults to exchanges as soon as they occur, officials said.
Earlier, SEBI had put off implementation of its directive that required listed firms to inform exchanges if they default on loan payments to banks and financial institutions “until further notice,” just a day before it was supposed to be implemented on Oct. 1.
SEBI Chairman Ajay Tyagi had said the directive was put on hold after banks had asked for more time as the Indian credit market was different from its Western counterparts where such a disclosure is mandatory.
In August, the regulator had directed listed companies to disclose from Oct. 1 any payment defaults to banks and financial institutions within one working day of such a miss.
The move came against the backdrop of the government and the Reserve Bank of India stepping up efforts to tackle the menace of bad loans amounting to over Rs 8 lakh crore.