The Securities and Exchange Board of India (SEBI) is looking to broaden the scope of Unpublished Price Sensitive Information (UPSI) to improve transparency in market disclosures. The new definitions would include proposed fundraising activities, corporate restructuring plans, and one-time bank settlements.
In its consultation paper, SEBI suggests that only agreements that impact the management and control of a company, such as shareholder agreements, joint venture agreements, and family settlements known to the firm, should be considered price-sensitive and listed as UPSI, as per a report by PTI.
The regulator also proposes that key developments in corporate insolvency proceedings, including the initiation or approval of resolution plans by tribunals, should be disclosed as potentially price-sensitive.
Additionally, the launch or conclusion of forensic audits, particularly in cases of fund misappropriation or financial misstatements, would be classified as price-sensitive information and subject to disclosure, the report added.
These proposed changes aim to bring greater clarity and consistency to SEBI’s definition of UPSI.
SEBI has also recommended adding proposed fundraising activities to the UPSI definition, as current regulations do not include decisions related to potential fundraising.
Another significant proposal is to include corporate restructuring plans, one-time bank settlements, and other major financial restructurings as UPSI, broadening the scope of events that need to be disclosed.
As per the PTI report, the regulator has also suggested that any actions by regulatory or judicial bodies against a company or its key personnel, particularly those involving significant enforcement actions, fines, penalties, or sanctions, should be considered price-sensitive and disclosed as UPSI.
Other suggested disclosures include outcomes of major litigation or disputes that could affect the company’s operations or finances, as well as the awarding, amendment, or termination of significant contracts outside regular business operations. These events are considered critical as they could have a substantial impact on a company’s financial performance.
SEBI also recommends disclosing the granting, withdrawal, or suspension of key licenses or approvals, as such changes could significantly affect a company’s operations.
The market regulator has invited public comments on these proposals until November 30.
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