Bourses to soon provide guidelines to companies for right disclosures to investors

As regulators and the government seek to provide greater safeguards for foreign and domestic investors, the stock exchanges will soon put in place a new framework to provide guidance to listed companies on making right disclosures, Bombay Stock Exchange (BSE) CEO Ashish Kumar Chauhan said.

This will enable the companies understand beforehand what kinds of disclosures they are required to make for investors to take informed decisions and help remove ambiguities and avoid unnecessary trouble for companies at a later stage, Chauhan said.

"One thing I would like to assure the international investors is that the Indian regulatory framework today is at the forefront of modern thinking about investor protection and investor rights," Chauhan told PTI in an interview in New York.

The BSE CEO, who is in the Big Apple to participate in various business events planned in the backdrop of Prime Minister Narendra Modi's five-day visit to the United States, also said that the capital markets regulator Sebi (Securities and Exchange Board of India), the Ministry of Finance and the Corporate Affairs Ministry have strived in the last six months or so to ensure that investors' rights are protected in the country.

"Sebi has also instructed the exchanges to ensure that the information provided by the listed companies fulfils the regulatory compliance aspect. If exchanges feel that the information is not sufficient, they can ask additional questions from the companies.

We (exchanges) are now working on a new framework to give them a guidance on what is price sensitive information or material details that the listed companies are required to share with the investors through the exchange platform and what could be the additional information," Chauhan said.

He added that this would ensure that there was no ambiguity in the minds of the companies' management and their company secretaries regarding the information and details that they ought to provide.

"Exchanges have been empowered a lot in recent times in their role as front-line regulators," he said.

When asked about how they would assure investors about better regulations, while also ensuring that the companies do not feel overburdened by new regulations, Chauhan said, "There is always a very thin line between over-regulations and the right regulations. However, the new framework is such that if you are able to take care of minority shareholders' interest, more and more investors are going to come in.

"It's not only foreign investors, but Indian investors would also be more willing to come in if their rights are taken care of. There is a huge scope for expanding the domestic investment horizon in India itself," the BSE chief said.

(PTI)