Suo moto

Rumours travel faster than regulatory filings. A news report or a social-media post can claim something about a listed Social Enterprise before the enterprise itself has said a word.

Suo moto is a Latin phrase meaning "on one's own motion", acting without being asked. Under Regulation 91(D) of the SEBI LODR Regulations, a Social Enterprise may suo moto confirm or deny any reported event or information to the Social Stock Exchange, or the Stock Exchange, without waiting for a formal query.

This sits inside a wider set of disclosure duties. A Social Enterprise must also disclose, within a fixed number of days, any event that could materially affect its planned outputs or outcomes, and must keep updating that disclosure for as long as the event stays material.

Regulation 91(D)'s obligations, in sequence (Chapter 9, section 9.2.3):

1. The Social Enterprise's board frames a materiality policy, disclosed to the exchange.
2. It authorises specific Key Managerial Personnel to decide materiality and make disclosures, and discloses their contact details.
3. It discloses any event with a material impact on planned outputs or outcomes.
4. That disclosure must come within 7 days of the event, or a period SEBI specifies.
5. It gives regular updates on the disclosure for as long as the event stays material.
6. It gives the exchange specific and adequate replies to any queries about the event.
7. It may suo moto confirm or deny any reported event or information. This is a power, not a duty.
8. It publishes on its own website everything disclosed to the exchange under this regulation.

Suo moto sits at point 7, and it is the odd one out. Every other point in this list is something the Social Enterprise must do. Acting suo moto is something it may do, on its own initiative, even before any formal query arrives.

Illustrative case; figures and names are made up.

A local news channel reports that Uday Seva Trust, listed on an SSE, has "quietly shut" one of its 12 rural health camps. In fact, the camp was relocated, not shut, to a village with 40% higher footfall based on the trust's own quarterly data.

Uday Seva Trust does not have to wait for the exchange to ask about the report. Acting suo moto, it issues a statement to the SSE confirming the relocation, denying the "shut down" characterisation, and giving the new camp's location and footfall figures. It also posts the same clarification on its own website, alongside the disclosures it already publishes under Regulation 91(D).

Had the underlying event instead been a genuine, material one, say losing a ₹50 lakh grant that funded 4 of its 12 camps, the trust would have had a duty, not a choice, to disclose it within 7 days, whether or not any news report had appeared first.

Chapter 9 (Disclosure Norms, Reporting Requirements by Social Impact Assessor and Penalties), section 9.2.3, sets out Regulation 91(D)'s full disclosure chain, including the Social Enterprise's suo moto power to confirm or deny reported events at point 7 of the sub-regulation. Expect a question distinguishing this discretionary suo moto power from the mandatory 7-day material-event disclosure duty.

• Suo moto action is a power ("may"), not a duty — unlike the 7-day material-event disclosure rule, which is mandatory ("shall").
• The 7-day clock runs from the event, not from when a news report or rumour about it appears.
• The materiality policy must be board-approved and disclosed to the exchange before any of the other steps in the chain make sense.
• Do not confuse suo moto confirmation or denial with the Statement of Utilisation of Funds's quarterly filing — one is event-driven and discretionary, the other is a fixed-cadence mandatory filing.