In this article, we discuss an illustration meant to highlight the complexities of balancing various regulatory obligations for listed entities across SEBI Regulations.
In relation or disclosures, SEBI Listing Regulations have granted listed entities a degree of latitude to be silent or to remain silent on market rumours.
But this latitude is subject to limits. And the SEBI Prevention of Insider Trading Regulations contain one such ‘limit’.
A Supreme Court order from December 2025 dismissed an appeal against SAT on the matter under consideration here, reaffirming the penalty of Rs. 3 million levied by SAT.
The underlying issue in this case related to whether media report that resulted in a selective, if inadvertent, dissemination of UPSI necessitates prompt public disclosure by the listed entity.
This resulted in leakage of UPSI that created information asymmetry – whether that information was confirmed or unconfirmed was not considered relevant and, in fact, in such a situation, the listed entity was obligated to confirm or deny the said rumour and could not opt for silence instead since the said information/ misinformation is already spreading.
SAT observed that the information remains unauthenticated till disclosed by the company and the absence of clarity on the matter will result in speculation continuing to float around which is why “selective leakage of the information, howsoever accurate or otherwise or complete or in bits and pieces, does not discharge the company from its responsibility of making prompt disclosure to make it generally available, moreso when such information has been classified by company as UPSI.”
This is supported by recent amendments in SEBI PITR clarifying that unverified events in print or electronic media cannot be considered as “generally available information” to begin with. As such, the information in question would certainly qualify as Unpublished Price Sensitive Information, given that specific norms on manner of disclosures exist for information to be called “generally available” and not “unpublished”.
The SEBI-PITRs “Code for Fair Disclosure of Information” requires prompt disclosure to ensure such information is generally available”, similar to the disclosure requirement of “material events and information” referred to in the SEBI-LODR.
This is why we say that while SEBI-LODR provide discretion to the listed entities on responding to market rumours (other than top 250 listed entities based on market-cap), this discretion would be secondary to the requirements of the SEBI-PITR.
Where UPSI has leaked, SEBI PIT Regulations require the entities to ensure that it is disseminated publicly based on the underlying ideal that fair disclosure of inside information eliminates information asymmetry between insiders and others to maintain integrity in market price discovery.
As regulatory obligations becomes more complex in line with market realities, the criticality of using smart and intelligent applications for management of these obligations increases. The Affinisio suite, for example, includes everything needed for such an instance – from Affinisio(DMR) for Disclosure Management and Reporting, Affinisio(SDD) for Tracking Flow of UPSI, Affinisio(ETT) for controlling trades for Insiders and Affinisio(CMM) for demonstrable governance through Committee Meeting and Minutes.
