Sebi Note Soon On Changes In Issue Prospectus

The regulator has received feedbacks from merchant bankers on this issue and the Association of Merchant Bankers of India (Ambi) has submitted a detailed suggestion-note last week.

According to Vijay Ranjan, senior executive director incharge of primary markets at Sebi, most of the suggestions by Ambi will be incorporated in the new directive on changes in issue prospectus.

He said, The changes will be implemented in about a weeks time as we have to check if the decision needs the approval of the Sebi board. The Sebi chairman, D R Mehta is expected to take a decision on the issue next week.

 

The Ambi note mainly seeks changes in presentation of the highlights and risk factors on the offer documents. The information containing details about the risk factor will appear on inside pages but will include the statement on how risk factors affect the performance and operations of the issuer company.

The cover page of an offer document will henceforth include only the following information based on the offer documents prepared for international offerings: name of the company, registered office, reference to the issue and the issue price, business group and promoter of the issue, lead manager to the issue and date of the offer document.

The second page which will be behind the cover page with table of contents and the third page will contain note on general security risk and warnings and clauses on disclaimer and caution.

The disclaimer clause mentions the risk factor related with initial public offer. This being the first issue of the company, there has been no formal market for securities of the company, mentions the clause. It will also state that no assurance can be given regarding an active or sustained trading on the shares of the company nor regarding the price international offering circulars.