Sebi introduces audio-visual representation of disclosures in offer documents for public issues

Markets watchdog Sebi on Friday decided to introduce audio-visual (AV) representation of disclosures made by companies in their offer documents for public issues, a move that will help investors have an easier understanding about the key features of an offer.

Such AV will be prepared and placed in the public domain for all main board public issues. The same will initially be in bilingual format -- English and Hindi.

This framework will be applicable to all DRHP filed with Sebi on or after July 1 on voluntary basis and from October 1 onwards on mandatory basis, the regulator said in a circular.

It is expected that the AV will provide ease in understanding the salient features and also provide reference to various disclosures of the proposed public issue.

"It has been decided that salient disclosures made in the Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP) and Price Band Advertisement for public issues shall also be made available in Audio Visual format (AV) for ease in understanding the features of public issues." Sebi said.

The regulator said that the duration of each bilingual version of the AV will be approximately 10 minutes. The total duration of the AV should be equitably distributed among the material disclosures made under various sections of the public issue offer document. These include risk factors, capital structure, objects of the offer, business of the issuer, financial information, litigations and material developments.

The content of the AV must be factual, non-repetitive, non-promotional and should not be misleading in any manner.

As per the regulator, the AV is required to be published by the issuer/lead manager of the offer within 5 working days both at the stage of submission and resubmission of DRHP. The AV should also be made available on digital/social media platforms of the Issuer and Association of Investment Bankers of India (AIBI).

"The web link of the said AV shall be made available on the websites of stock exchanges and the concerned lead managers and shall also be accessible from the QR code pertaining to the public issue," Sebi said. The regulator said that the issuer and all lead managers to the public issue will be responsible for the content and information made available in the AV.

Companies looking to raise capital through public issues are required to file a DRHP with Sebi and stock exchanges. The disclosures in DRHP are appropriately updated in line with the observations issued by the regulator and the bourses. Later, RHP was filed with Sebi and the Registrar of Companies (RoC).

In a separate circular, Sebi has tweaked the staggered delivery period in commodity Futures Contracts. Under this, the minimum duration of staggered delivery period will now be at least three working days from the current five working days. The circular will be effective from July 1 for contracts where staggered delivery is scheduled after this date.

Staggered delivery period is the period, beginning few working days prior to expiry of any contract and ending with expiry, during which sellers/buyers having open position may submit an intention to give/take delivery.