The capital markets regulator Securities Exchange Board of India (Sebi) recently issued a new format of abridged prospectus for public issues of non-convertible debt securities and non-convertible redeemable preference shares.
The regulator said the stock markets are directed to bring the provisions of this circular to the notice of listed entities and also to disseminate the same on their website.
Adding a QR code
In these directions, the regulator said that the companies must insert a quick response (QR) code on the first and last page of the prospectus so that investors can scan the code and access the prospectus on their smartphone.
On the top of it, the issuer entity or merchant bankers are mandated to insert a QR code on the front page of the documents such as front outside cover page, advertisement as deemed fit by them, reads the directive,
Accurate and adequate information
The circular further states that the issuer/ merchant bankers will ensure that the disclosures in the abridged prospectus are adequate, accurate and do not contain any misleading or misstatement.
In order to help investors make a calculated decision of whether to invest or not, the companies will be supposed to complement qualitative statements with quantitative factors.
The regulator’s circular clearly mentions that no qualitative statement will be made which cannot be substantiated with quantitative factors.
The circular will come into effect from October 1, 2023 onwards. It means the circular will be applicable to all the public issues that open on or after this date.
A copy of the prospectus will be made available on the website of issuer, merchant bankers, registrar to an issuer and a link for downloading abridged prospectus will be provided in issue advertisements for the public issue.
The regulator has revised the format for disclosures in the abridged prospectus to further simplify and provide greater clarity and consistency in the disclosures across various documents, and also to provide additional but critical information.
For the unversed, abridged prospectus is a memorandum containing salient features of a prospectus as may be specified by the Sebi by making regulations on this behalf.