Sebi to come out with tighter norms on company disclosures

1,100 companies not compliant with shareholding, 900 with corporate governance disclosures

The Securities and Exchange Board of India (Sebi) was likely to announce new norms to bring about greater scrutiny of the way companies adhered to disclosure requirements, said a senior regulatory official.

The guidelines, which would require stock exchanges to do more to ensure companies met their obligations to shareholders, were likely to be announced on Monday, said Sebi Chairman U K Sinha. "We are going to announce something on Monday…we are getting into the quality of the filing and in that regard, we have now decided to come out with detailed guidelines about the quality and adequacy of the disclosures," he said at the Federation of Indian Chambers of Commerce and Industry (Ficci)'s Capital Markets Conference here on Friday.  "You will be perhaps shocked to know today, there more than 1,100 listed companies that are non-compliant with the requirement of clause 35 of the listing agreement…the direction with regard to the shareholding pattern that must be filed by them," he said.

A listing agreement is a contract between the company and the exchange on which it is listed. Clause 35 of the listing agreement requires companies to file their shareholding pattern with the exchange prior to listing, as well as on a quarterly basis or if there is capital restructuring, according to information on exchange websites. A number of companies are non-compliant with disclosures on corporate governance, which require companies to provide disclosures on various matters, including related-party transactions and the use of money raised by the company.