Starting today, India's top 100 listed companies must verify market rumours within 24 hours

Starting this Saturday, the top 100 listed companies by market capitalization will be required to confirm or deny any market rumours reported in mainstream media. This mandate will extend to the top 250 companies from December 1.

Under SEBI's new rule, these companies must "confirm, deny, or clarify any reported event or information in the mainstream media that is not general in nature and indicates that rumours of an impending specific material event" are circulating among the investing public within 24 hours of the report.

SEBI's rumour verification framework aims to exclude price volatility from average market price calculations for corporate actions, ensuring fairness for all investors.

"The move would dissuade leaking of information that would affect the valuation in the given corporate action. This initiative of SEBI would help strengthen the rumour verification framework. It would help in achieving a fair market thereby making it a preferred market for investors all over the world," said Makarand M Joshi, founder of MMJC and Associates, a corporate compliance firm.

When calculating prices for corporate actions such as buybacks, qualified institutional placements, preferential allotments, and takeovers, any material price movement caused by confirmed rumours will be excluded.

Market rumours can cause significant volatility in stock prices, often leading to transactions that don't reflect a company's true value. These rumours can be related to management changes, order cancellations, or financial health.

"SEBI's framework addresses this issue by establishing a mechanism to determine the unaffected price -- the price of a stock before the rumour surfaced. This price would be used for transactions unless the rumour itself caused price fluctuations in subsequent trading days," said Trivesh, Chief Operating Officer of Tradejini.