Sebi to release 10-pager abridged prospectus for IPOs

CLR Note: The Securities and Exchange Board of India is planning to come out and release a 10-pager document called Abridged Prospectus from a 400 to 500 pager document which is running currently. The regulator that this document would contain a brief snapshot of all the requisite details and would allow the investor to make decision on investments.

Sebi will soon allow the companies to file ten-page abridged prospectus for initial public offers as part of its efforts to help disseminate information in a more investor-friendly manner.

The abridged document would have only 10 pages without compromising on information that an investor is required to know.

“Very soon SEBI will come out with abridged prospectus which will be really understandable for investors. Whatever (information) is required to take well informed decisions, it will be available in ten pages,”.

The full prospectus, which can run into 400 to 500 pages currently, would also be available on website of the company and Sebi (Securities and Exchange Board of India).

According to Nagpal, Sebi has taken various steps, including revised norms for initial public offers, towards ease of doing business.

The capital markets regulator is already working on a ‘system-driven disclosure regime’ for the listed companies and their top officials to help improve its real-time monitoring of insider trading cases and other corporate governance related lapses.

The move is also aimed at reducing the compliance burden on the companies and the individuals, as the new system would use technology for automatic gathering and integration of information from all available sources.

Earlier, Sebi had set up a committee for reviewing the disclosures and application form in public issues with an objective to revisit the adequacy and quality of disclosures made along with the application form (including prospectus and abridged prospectus).

The committee also looked into the review of the structure, design, format, contents and order of information from the point of ensuring that the materially important information is provided in a structured and user-friendly manner to facilitate more transparent process for the initial public offers (IPOs).