 "Sebi panel mulls changes to IPO disclosure norms")
The Securities and Exchange Board of India is in discussion to review the disclosures in public issues. A committee on this held a meeting on Tuesday.
The Committee for Reviewing the Disclosures And Application Form in Public Issues had discussion on presentation of financial data, industry and market information, as well as negative statements in offer documents, according to a person familiar with the matter.
“It is part of a periodic review of the disclosures in public issues. A good part of the review has already been undertaken in earlier meetings,” said the person.
The present committee will also examine management discussion and analysis made available to investors. It will also look at the way negative statements are presented to investors. Negative statements pertain to potential risk factors associated with investing in a company. These might differ from sector to sector. The committee also looked at results being made available in more than one currency to investors. Turn to TSI, Page 19 >
Sebi had observed the large size of the prospectus made available to investors. A lot of the information present was seen to be of a generic nature, not specific to the investment under question, according to the earlier committee’s report.
Disclosures were seen to be cluttered and unstructured, making it difficult for investors to read and understand. It was felt that investors needed to be provided the required information in a way that did not overwhelm them.
“In this context, a committee was constituted by Sebi to come up with recommendations for improving the quality of disclosures made, along with the application form, and also to make the application form simple and easy to use for the retail investors,” said the earlier report.
The wholetime member representing Sebi at the time was K M Abraham. Currently, it is Prashant Saran, according to the source. An email to the regulator did not get a reply. REWRITING OFFER DOCUMENTS
The Committee for Reviewing the Disclosures And Application Form in Public Issues had discussion on presentation of financial data, industry and market information, as well as negative statements in offer documents, according to a person familiar with the matter.
“It is part of a periodic review of the disclosures in public issues. A good part of the review has already been undertaken in earlier meetings,” said the person.
More From This Section
Those attending included senior executives from at least two domestic investment banks, a law firm and other market intermediaries, according to the person quoted above. An earlier version of this committee had recommended a number of changes in an interim report of June 2011. Both then and now, the effort is to look at the adequacy of the disclosures made, along with the application form, revisit the structure of the information provided to investors and identify legal and other constraints related to the disclosures.
The present committee will also examine management discussion and analysis made available to investors. It will also look at the way negative statements are presented to investors. Negative statements pertain to potential risk factors associated with investing in a company. These might differ from sector to sector. The committee also looked at results being made available in more than one currency to investors. Turn to TSI, Page 19 >
Sebi had observed the large size of the prospectus made available to investors. A lot of the information present was seen to be of a generic nature, not specific to the investment under question, according to the earlier committee’s report.
Disclosures were seen to be cluttered and unstructured, making it difficult for investors to read and understand. It was felt that investors needed to be provided the required information in a way that did not overwhelm them.
“In this context, a committee was constituted by Sebi to come up with recommendations for improving the quality of disclosures made, along with the application form, and also to make the application form simple and easy to use for the retail investors,” said the earlier report.
The wholetime member representing Sebi at the time was K M Abraham. Currently, it is Prashant Saran, according to the source. An email to the regulator did not get a reply. REWRITING OFFER DOCUMENTS
- Panel examining disclosure norms
- Also, at presentation of financial data, disclosure of industry and market information, negative statements
- To see if format can be improved and made more reader-friendly