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Material Change

Updated on March 10, 2023

Material change means an event, occurrence, change in conditions or circumstances or other change which results in or could reasonably result in or may cause changes to the effect of having an effect/impact on the completion of, fulfillment of or execution of the said agreement or contract.
‘Material change’ in stock markets, banking, insurance or the financial services business is any change in state or functionality in the business, operations, capital of the issuer that would reasonably be expected to have a significant impact on the
a) market price
b) value
c) amount
d) client portfolio/funds or
e) any other securities of the issuer/receiver

Material Change Explained

Material Change effected by a company is a major change and any decision to this effect has to go through proper management process and/or as defined by the corporate as well as regulatory guidelines. It helps investors in arriving at or changing a decision with respect to a purchase or continuing with the investment of the issuer. Material Change can be defined differently in different cases, agreements or contracts but has largely the same meaning or impact.