What is rumour verification? SEBI LODR Reg 30(11)

Rumour verification is the duty on India's largest listed companies to publicly confirm, deny or clarify a market rumour once the share price has moved materially. It sits in Regulation 30(11) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The obligation is narrow by design: it bites only on the top 100 and top 250 listed entities, only for rumours reported in a defined list of mainstream media, only where the rumour carries specific detail, and only when a material price movement has been triggered. This page explains what rumour verification requires and what it leaves out. It is not investment advice.

What does rumour verification require a company to do?

Three things have to line up before the obligation applies. The rumour must be reported in mainstream media as defined by the industry standards. It must not be general in nature, meaning it carries specifically identifiable details or is attributed to sources reasonably expected to know. And the share price must have moved materially in the direction of the news, measured against the exchange framework for material price movement.

When all three hold, the company files a confirmation, a denial or a clarification with the stock exchanges through the exchange announcement module, not later than twenty four hours from the trigger of the material price movement. The regulation words it as "as soon as reasonably possible but in any case not later than twenty four hours".

What changed on 17 May 2024

The first version of this rule keyed off publication. A rumour appeared in mainstream media and the clock started from the reporting of that event or information. The SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2024, notified on 17 May 2024 as No. SEBI/LAD-NRO/GN/2024/177, replaced that trigger. The words "reporting of the event or information" were substituted by "trigger of material price movement", and the phrase "upon the material price movement as may be specified by the stock exchanges" was inserted into the proviso.

The practical effect is that a rumour published to no market reaction now creates no filing. The price has to move first, by the percentage the exchanges specify.

The same amendment inserted Regulation 30(11A), which closes the obvious gap. A company cannot verify a rumour about its own promoter unless the promoter answers. Regulation 30(11A) requires a promoter, director, key managerial personnel or senior management to provide an adequate, accurate and timely response to the queries the company raises, and requires the company to disseminate that response promptly to the exchanges.

Who is covered, and how the list is drawn

Rumour verification applied to the top 100 listed entities from 1 June 2024 and to the top 250, meaning the next top 150, from 1 December 2024. Which companies those are is not a fixed list. Stock exchanges rank listed entities annually, and since the 2024 amendment the basis is average market capitalisation over 1 July to 31 December. The mechanics of that ranking, including when a newly ranked company has to start complying, are in SEBI market capitalisation ranking.

What counts as mainstream media

The Industry Standards Note, formulated by the Industry Standards Forum of ASSOCHAM, CII and FICCI under the aegis of the stock exchanges and notified by SEBI circular SEBI/HO/CFD/CFD-PoD-2/P/CIR/2024/52 dated 21 May 2024, answers this with a closed list rather than a principle. Covered sources include:

• The top 20 English national dailies meeting the Registrar of Newspapers for India circulation threshold of 1,00,000 copies or more per publishing day, subject to audit and registration conditions.
• Five named business dailies: Economic Times, Business Standard, Livemint, Financial Express and Hindu Business Line.
• The top two regional dailies by circulation for each of the 22 official languages. Eleven languages currently have publications above the circulation threshold.
• Named digital news sources including Bloomberg, Reuters, Moneycontrol, Business Today, BusinessWorld and Press Trust of India, on the condition that the article carrying the rumour is not behind a paywall.
• Named business news channels: CNBC TV-18, ET Now and NDTV Profit, plus the vernacular channels CNBC Awaaz, ET Swadesh, Zee Business and CNBC Bazaar, and their websites.

Two exclusions matter more than the inclusions. News aggregators are outside the definition, on the reasoning that an aggregator also carries sources that are not on the list. Social media platforms are excluded, naming WhatsApp, X, Instagram, Facebook and Telegram, with one carve-out: the official social handles of the identified news sources are covered, but quotes, reposts and retweets of what those handles published are not.

There is also a no-repeat rule. Once a company has responded to a rumour in one identified source, it need not respond again if a materially similar rumour appears in another source.

When is a rumour specific enough to need an answer

The standards draw the line at identifiable detail, and illustrate it transaction by transaction. A rumour that "Company X is proposing to sell its fertiliser business" is specific. A rumour that "Company X is proposing to divest one of its business divisions" is not. "Company X is currently in talks to acquire a stake in Company Y" is specific. "Company X is currently in talks to undertake a potential acquisition", with no target named, is not. Regulation 30(11) does not apply to rumours that are vague or general in nature.

The standards add one point that cuts the other way: if a specific rumour is false, the company is required to issue a statement denying it.

Why the confirmation timing has a price consequence

Confirming inside the twenty four hour window does more than discharge a disclosure duty. Where the transaction is one whose price is fixed by regulation, such as a preferential issue under the ICDR Regulations or an open offer under the takeover code, a confirmation inside that window lets the company strip the rumour-driven price spike out of the pricing calculation. That is the unaffected price framework, and it is the reason a company has an incentive to answer quickly rather than wait.

How rumour verification sits next to ordinary disclosure

Regulation 30 has two different machines in it. Most of it deals with events the company itself knows about and must report, which is material event disclosure under Regulation 30(1) to 30(4) and Schedule III. Rumour verification is the reverse case: the market is talking, the company has not disclosed, and the price has moved. The two are compared side by side in rumour verification vs material event disclosure.

Separately, and independently of Regulation 30(11), the exchanges continue to seek clarifications on news about a listed entity as part of their surveillance work. A company must give a specific and adequate reply to those queries under Regulation 30(10). So an announcement that reads like a rumour response may have come from either route.

Rumour verification turns market chatter into a dated, filed, citable document, which is what makes it useful to anyone tracking a company. The retrieval method is in how to track rumour verification disclosures. Flock reports public filings with every claim sourced and dated. What any of it means for your money is your call to make.