SEBI amends primary market disclosure norms

Mumbai, Apr 2: In order to make the Indian primary market more efficient and transparent, the market regulator Securities&Exchanges Board of India (SEBI) has amended its primary market disclosure requirements for listed companies under the (Disclosure and Investor Protection) (DIP) guidelines 2000.

The amendments come into immediate effect, a SEBI release here stated.

The amendments related to rationalisation of disclosure requirements for listed companies, abridged letter of offer, disclosure of issue price, further issue of shares and lock-in provisions.

The release further stated that the amendments shall be applicable to all offer documents, including those already filed with SEBI and even in some cases where the guidelines are yet to be issued.

On rationalisation of disclosure requirements for listed companies, the SEBI decided to rationalise the disclosure requirements for rights issues and public issues by listed companies and to make the benefit of such rationalisation available to those listed companies which are regular in filing periodic returns with the stock exchanges.

The amendments will also ensure that a comprehensive investor grievance mechanism is put in place to redress investor's complaints satisfactorily.

With regard to abridged letters of offer, the amendment states that in order to bring uniformity in the practice of making available abridged offer documents, it has now been decided to permit an issuer company making a rights issue to dispatch an abridged letter of offer which shall contain disclosures as required to be given in the case of an abridged prospectus.

The issuer company will now have to provide the detailed letter of offer to any shareholder upon request.

On the subject of disclosure of issue price, the amendments entailed a listed company to fix and disclose the issue price in case of a rights issue any time prior to fixing of the record date, in consultation with the designated stock exchange.

In case of a public issue through fixed price route, the company can now fix and disclose the issue price at any time prior to filing of the prospectus with the Registrar of Companies (ROC), stated the SEBI release, adding that the prospectus filed with ROC shall have one issue price.

The amendments have also clarified that lock-in period of one year in terms of clause 4.14.1 of SEBI (DIP) Guidelines, 2000, shall now be reckoned from the date of allotment of shares issued in a public issue.

UNI