SEBI revises the format of disclosures in the abridged prospectus, specifies information to be disclosed on the cover page of the offer document

CIRCULAR NO: SEBI/HO/CFD/SSEP/CIR/P/2022/14, Dated 04/02/2022

The SEBI, with an aim to bring more clarity and consistency in disclosure across various documents, has prescribed a revised format for disclosures to be made in the abridged prospectus. SEBI also provided the disclosures to be made on the front cover page of the offer document as required under Clause 1(a) of Part A – Schedule VI of the ICDR Regulations. The detailed formats are provided in “Annexure-A & B” of the circular. This circular is applicable for all issues opening after 04.02.2022.

To further simplify and provide greater clarity, the SEBI has come out with a new format for disclosures in the abridged prospectus, whereby critical information will be provided on the front page of the offer document. “It was felt that as the multitude of information is required to be disclosed, the look and text on the front page appear to be crowded. Therefore in order to disclose the information in a structured way a new disclosure format was needed” said SEBI.

The disclosures in the abridged prospectus shall be as per Annexure A of this Circular instead of Annexure I of Part E of Schedule VI of ICDR Regulations, further the disclosure on the front outside cover page shall be as per Annexure B.

Under the revised format, a company will have to disclose the name of the promoter, details of the offer to the 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).

SEBI further mandates that a copy of the abridged prospectus shall be made available on the website of the Issuer Company, lead managers, registrar to an issuer. Further, the downloading link of the abridged prospectus shall be provided in the price band advertisement.

Further, also the issuer company/ Merchant Bankers (MBs) shall insert a QR code on the front page of the documents such as front outside cover page, abridged prospectus, price band advertisement, etc. as deemed fit by them, the scan of QR code shall lead to downloading of a prospectus, abridged prospectus and price band advertisement as applicable.

The Issuer Company / Merchant Bankers (MBs) shall ensure that the disclosures in the abridged prospectus are adequate, accurate, and do not contain any misleading or mis-statement.

Additionally, the Issuer Company/MBs shall ensure that the qualitative statements in the abridged prospectus shall be substantiated with Key Performance Indicators (KPIs) and other quantitative factors. No qualitative statement shall be made which cannot be substantiated with KPIs. This circular of SEBI will remove the complexities of the existing formats and will provide more clarity now.

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