SEBI, the Securities and Exchange Board of India, is responsible for regulating and overseeing the securities market in India. It has implemented various regulations and guidelines to ensure transparency, fairness, and investor protection. Listed companies, which are companies whose shares are traded on stock exchanges, are subject to specific regulations imposed by SEBI. Let’s explore the key SEBI regulations for listed companies:
1. Disclosure and Reporting
SEBI mandates that listed companies must make timely and accurate disclosures to the stock exchanges and the public. This includes financial statements, material information, and any changes in the company’s operations or shareholding patterns. Companies must also publish quarterly, half-yearly, and annual financial results, providing transparency to shareholders and investors.
2. Corporate Governance
SEBI places significant emphasis on corporate governance practices to protect the interests of shareholders. Listed companies are required to have a board of directors with a proper balance of executive and independent directors. SEBI has introduced guidelines on board composition, audit committees, risk management, related-party transactions, and disclosure of corporate governance practices.
3. Insider Trading
SEBI regulations aim to prevent insider trading, which is the buying or selling of shares based on non-public, price-sensitive information. Listed companies must implement strict internal controls to prevent insider trading and ensure that directors, officers, and employees adhere to the code of conduct for trading in company securities. SEBI also monitors and investigates any suspicious trading activities.
4. Takeovers and Mergers
SEBI regulations govern the process of takeovers and mergers involving listed companies. They provide guidelines on open offers, substantial acquisition of shares, and delisting of securities. These regulations aim to protect the interests of minority shareholders and ensure fairness and transparency in such transactions.
5. Listing Requirements
SEBI sets listing requirements that companies must meet to have their shares listed on stock exchanges. These requirements include minimum net worth, minimum public shareholding, and compliance with ongoing disclosure and reporting obligations. SEBI periodically reviews and updates the listing requirements to align with changing market dynamics and investor protection needs.
6. Investor Protection
SEBI’s primary objective is to protect the interests of investors. It ensures that listed companies provide accurate and timely information to investors. SEBI also regulates fraudulent and unfair trade practices, market manipulation, and price rigging to maintain market integrity and investor confidence.
by Astrobulls Research Pvt Ltd.