The Securities and Exchange Board of India (SEBI), the country's market regulator, is planning to introduce new disclosure requirements for conglomerates. These requirements aim to enhance transparency and accountability in the securities market ecosystem. Currently, unlisted companies within conglomerates are not subject to the same rigorous disclosure standards as their listed counterparts. SEBI recognizes the need to identify, monitor, and manage the risks introduced by these unlisted companies, particularly in conglomerates with complex structures involving both listed and unlisted associates. In this article, we will explore SEBI's plans for disclosure requirements, the potential impact on conglomerates, and the timelines for implementation.

Enhancing Group-Level Reporting

SEBI plans to standardize disclosures in public offer documents issued by both private and listed companies. This will ensure that investors have access to comprehensive and accurate information about the financials and material changes in these companies. Additionally, SEBI is considering making group-level disclosures mandatory for cross holdings, where a publicly-traded company owns stock in another publicly-traded company. This will provide investors with a holistic view of the conglomerate's financial transactions and relationships.

Unlisted Companies and Disclosure Requirements

Currently, unlisted companies within conglomerates are not required to make the same level of disclosures as listed entities. This lack of transparency can pose risks to the securities market ecosystem. SEBI aims to address this issue by introducing stricter disclosure requirements for unlisted companies. By doing so, SEBI seeks to ensure that investors have access to all relevant information when making investment decisions.

Impact on Conglomerates

The new disclosure requirements will have a significant impact on conglomerates operating in India. These conglomerates, such as the Tata Group, Reliance Industries, and Adani Group, will now need to disclose details of cross holdings and material financial transactions on an annual basis. This increased transparency will provide investors with a more comprehensive understanding of the conglomerate's financials and business operations.

Reviewing Pricing Mechanisms and Takeover Regulations

In addition to the disclosure requirements, SEBI is planning to review the pricing mechanism in case of delisting. This review will include examining the reverse book-building process and exploring alternative methods to determine the exit price in case of voluntary delisting. SEBI also aims to align its takeover code, which governs mergers and acquisitions, with global standards based on past judicial pronouncements. The last review of the takeover code was conducted in 2009, highlighting the need for an updated framework.

Strengthening Volatility Management

SEBI recognizes the importance of managing market volatility and minimizing information asymmetry. To address these concerns, the regulator is in the process of strengthening the existing framework of price bands for scrips and derivatives contracts in the equity derivatives segment. The new framework will help limit the impact of price risks arising from sudden extreme market volatility or system issues. This measure aims to protect investors and maintain market stability.

Reviewing Eligibility Criteria for Derivatives Segment

SEBI plans to review the eligibility criteria for the introduction and continuation of stocks in the derivatives segment. The regulator acknowledges that market parameters, such as market capitalization and turnover, have significantly changed since the last review in 2018. By updating the eligibility criteria, SEBI aims to ensure that only eligible stocks are included in the derivatives segment, promoting a well-regulated and efficient market.

Strengthening Fraud Prevention and Detection

SEBI is committed to preventing fraud and market abuse within the securities market. To achieve this, the regulator is proposing amendments to the SEBI (Stock Brokers) Regulations, 1992. These amendments will introduce systems for surveillance of trading activities, internal controls, obligations of stockbrokers and their employees, escalation and reporting mechanisms, and a whistleblower policy. These measures will enhance the mechanism for preventing and detecting fraudulent activities in the market.

Promoting Compliance and Accountability

SEBI is taking several measures to promote compliance and accountability among market participants. Listed companies will be required to automate trading restrictions on insiders, freezing the permanent account numbers of designated persons in the depository system and stock exchanges. This measure aims to prevent insider trading and ensure that trading restrictions are effectively implemented. Additionally, SEBI is exploring ways to enhance cyber resilience and strengthen the cybersecurity framework for SEBI-regulated entities, protecting against cyber risks and incidents.


SEBI's plans to introduce new disclosure requirements for conglomerates reflect its commitment to enhancing transparency and accountability in the securities market ecosystem. By standardizing disclosures, strengthening volatility management, reviewing eligibility criteria, and promoting fraud prevention and detection, SEBI aims to protect investors and maintain market integrity. These measures will have a significant impact on conglomerates, improving investor confidence and ensuring that all market participants comply with the highest regulatory standards. As SEBI continues to evolve its regulations, the Indian securities market will become more robust, transparent, and conducive to sustainable growth.