SEBI Releases New Disclosure Format For Abridged Prospectus

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Aiming to provide greater clarity and transparency, markets regulator Securities and Exchange Board of India (SEBI) has released a new format for disclosures under abridged prospectus, where critical information will be mentioned on the front page of the offer document.

Under the rules, every application form for the purchase of any securities of a company needs to be accompanied by an abridged prospectus.

After reviewing the disclosure requirement, it was felt that due to the multitude of information which is required to be disclosed, the look and text on the front page appears to be crowded, the markets regulator said in a circular.

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

Also, the company is required to make disclosure about details of OFS by promoter, promoter group and other shareholders.

In the abridged prospectus containing salient features of the Red Herring Prospectus (RHP), the company will have to disclose about price band and minimum bid lot under the revised format.

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