India’s market regulator on Friday mandated enhanced disclosure norms for IPO-bound companies amid concerns that traditional financial disclosures were inadequate for some firms that typically remain loss making for a longer period.
The Securities and Exchange Board of India said after a meeting of its board that companies would have to disclose key performance indicators, details of pricing of shares based on past transactions and past fund raising from its investors.
Reuters reported in March that SEBI had started asking IPO hopefuls for such details even before the proposals were finalised, unsettling bankers and companies who feared delays to their listing plans.
The Board also allowed companies planning a stock market listing to submit a confidential “pre-filing” document, – a practice followed in the United States and Canada – to safeguard their sensitive business information.
SEBI also said the board had approved amendments to insider trading regulations to include mutual funds in its ambit.
The move comes more than a year after SEBI accused a senior executive of U.S. money manager Franklin Templeton (FT) and his family members of using non-public information to sell holdings worth about $4 million in Franklin debt funds that were shut down weeks later and caused investor panic.
In India, insider trading rules are applicable to those who deal in listed securities while in possession of unpublished price sensitive information.
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