New Delhi: In order to simplify and provide more clarity, market regulator SEBI has come up with a new format for disclosure in brief brochure, under which important information will be provided in the first page of the offer document.
Under the rules, a brief prospectus is required to be attached with every application for purchase of securities of a company.
SEBI, in a circular issued on Friday, said that after reviewing the disclosure requirement, it was felt that due to the need to disclose a large number of information, the look and text on the front page appears to be congested.
Under the revised format, a company will have to disclose the name of the promoter, details of the offer to the public – type of issue, fresh issue and offer for sale (OFS) component, total issue size – and share reservation details. Will have to do The first page of the short brochure (DRHP or RHP).
Also, the company is required to disclose the details of OFS by the promoter, promoter group and other shareholders.
In the brief brochure containing the salient features of the Red Herring Prospectus (RHP), the company has to disclose the price band and minimum bid lots under the revised format.
Also, the issuing company will have to disclose the indicative timelines for opening and closing of the issue, initiation of refund, credit of equity shares in the demat accounts of the allottees and commencement of trading of equity shares.
The new format is part of SEBI’s effort to provide greater clarity and consistency in the disclosure of various documents and additional but important information in the brief brochure.
SEBI said the brief prospectus shall be made available to an issuer on the website of the issuer company, lead manager, registrar and a link to download the prospectus shall be provided in the price band advertisement.
The Issuing Company and the Merchant Bankers (MB) shall ensure that the disclosures in the Brief Statement are adequate, accurate and do not contain any misleading or incorrect statements.
Further, the Issuing Company/MB shall ensure that the qualitative details in the summary are certified with Key Performance Indicators (KPIs) and other quantitative factors. Also, no qualitative details will be given which cannot be verified from the KPI.
In addition, they will have to put a Quick Response (QR) code on the front page of the documents such as the front outer cover page, brief brochure, price band advertisement, etc. as deemed fit by them.
Scanning of QR code will download the prospectus, brief brochure and price band advertisement, as applicable.
The new framework will be applicable to all issues opened after February 4.
(This story has been published as part of an auto-generated Syndicate wire feed. Other than the title, no edits have been made to the copy by ABP Live.)
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