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(THE GIST OF PIB) SEBI Introduces New Framework For Unaffected Price

(JUNE-2024)

To tackle any impact on the price of a scrip because of a market rumour, the Securities and Exchange Board of India (SEBI) introduced a framework centred around its ‘unaffected price.’

The Securities and Exchange Board of India (SEBI) introduced a framework centred around the concept of “unaffected price” to tackle the impact of market rumours on stock prices.
Purpose: The framework aims to maintain a reasonable price for a scrip, excluding any undesired influence before the rumour is confirmed or refuted, thereby helping both companies and investors.
Implementation: The framework will be implemented in phases:
Phase 1 (June 1): Applies to the top 100 listed entities.
Phase 2 (December 1): Applies to the top 250 listed entities.
How “Unaffected Price” works: The “unaffected price” is the price of the scrip before a particular rumour emerged and became public. This mechanism ensures a fair price discovery process, protecting the interests of market participants.

Improve market integrity by promoting transparency and faster responses from listed companies.
Enhance confidence among investors.
Reduce speculative activity.
Ensure a level playing field for buybacks, mergers and acquisitions, and other transactions.
Timeframe: The “unaffected price” must be determined within 24 hours of any material price movement excluding the rumour.