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IAI Actuarial Core Principles · Business Finance · Regulation of financial reporting of incorporated entities

Under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, what is the main purpose of requiring a listed company to disclose material events and information to the stock exchanges promptly?

Prompt disclosure of material events under the SEBI Listing Regulations exists so that all investors receive price-sensitive information at the same time. This reduces information asymmetry and supports fair markets. It does not replace audited accounts or shift directors' responsibility.

  1. ATo ensure all investors have timely access to price-sensitive information, reducing information asymmetryCorrect
  2. BTo allow the company to choose which investors receive information first
  3. CTo replace the need for annual audited financial statements
  4. DTo guarantee that the share price will not fall after bad news
  5. To transfer the responsibility for financial reporting from directors to the stock exchange

Explanation

Prompt disclosure of material information is intended to give the market equal and timely access to information that could affect security prices. It does not replace audited accounts, does not guarantee prices, and does not move responsibility from directors to the exchange.

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