Sebi lays new disclosure format for abridged prospectus
The new format is to provide greater clarity, consistency, critical information in the abridged prospectus; The new framework will be applicable for all issues opening after Feb 4
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New Delhi: To further simplify and provide greater clarity, markets regulator Sebi has come out with a new format for disclosures in abridged prospectus, whereby critical information will be provided in the front page of the offer document.
Under the rules, every application form for the purchase of any securities of a company needs to be accompanied by an abridged prospectus. After reviewing the disclosure requirement, it was felt that due to the multitude of information which is required to be disclosed, the look and text on the front page appears to be crowded, Sebi said in a circular issued on Friday. Under the revised format, a company will have to disclose about name of the promoter, details of offer to public -- types of issue, fresh issue and offer for sale (OFS)component, total issue size -- and share reservations details on the front page of the abridged prospectus (DRHP or RHP). Also, the company is required to make disclosure about details of OFS by promoter, promoter group and other shareholders. In the abridged prospectus containing salient features of the Red Herring Prospectus (RHP), the company will have to disclose about price band and minimum bid lot under the revised format. Also, the issuer company has to disclose about indicative timelines for opening and closing of the issue, initiation of refunds, credit of equity shares to demat accounts of allottees and commencement of trading of equity shares among others.
