In an effort to bring more clarity and transparency, the market regulator Securities and Exchange Board of India (SEBI) has released a new format for the disclosures to be provided under a short form prospectus, where critical information will be mentioned on the first page of the offer document.
According to the rules, each application form for the purchase of securities of a company must be accompanied by a short form prospectus.
After reviewing the disclosure requirement, it was felt that due to the multitude of information that needs to be disclosed, the appearance and text of the front page appears to be cluttered, the market regulator said in a statement. circular.
Under the revised format, a company will have to disclose the name of the promoter, details of the offering to the public – types of issue, new issue and offer to sell (SFO) component, total issue size – and share details. reservations on the first page of the abbreviated prospectus (DRHP or RHP).
In addition, the company is required to disclose details of OFS by promoter, group of promoters and other shareholders.
In the abbreviated prospectus containing the main features of the Red Herring Prospectus (RHP), the company will have to disclose the price range and the minimum bid lot under the revised format.
In addition, the issuing company must disclose the indicative deadlines for the opening and closing of the issue, the initiation of redemptions, the crediting of the shares to the demate accounts of the assignees and the start of the trading of the shares, among others. .
The initiative aims to provide greater clarity and consistency in the information provided in various documents and to provide additional but essential information in the short form prospectus.
SEBI said the short form prospectus will be made available on the issuer’s website, lead managers, an issuer’s registrar and a link to download the prospectus will need to be provided in the price range advertisement.
The issuing company and investment bankers should ensure that the information contained in the short form prospectus is adequate, accurate and does not contain any misleading or inaccurate information.