Definition
Material Disclosure
Material disclosure is a listed company's obligation to promptly inform the stock exchanges of events that could affect its share price.
Under SEBI LODR, listed companies must disclose material events and information — such as acquisitions, large orders, results, board changes, defaults, litigation or regulatory action — to the exchanges within prescribed timelines, so all investors get the information at the same time. SEBI maintains a list of deemed-material events and a materiality policy framework.
Timely, even-handed disclosure underpins market fairness and reduces the scope for insider trading. SEBI has tightened timelines and added requirements to confirm, deny or clarify market rumours for large companies.
Related terms
- SEBI Insider Trading Code (PIT)The SEBI (Prohibition of Insider Trading) Regulations, or PIT, ban trading in a company's securities while in possession of unpublished price-sensitive information.
- Unpublished Price-Sensitive Information (UPSI)UPSI is non-public information about a company that, once known, could materially affect the price of its securities.
- Corporate GovernanceCorporate governance is the system of rules, practices and controls by which a company is directed, overseen and held accountable to its stakeholders.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.