The Securities and Exchange Board of India ( SEBI ) has issued significant guidelines in a Circular dated February 6, 2024 pertaining to the handling of draft offer documents. These guidelines for returning of draft Offer document and its resubmission. This Circular shall come into force with immediate effect.
This Circular is being issued pursuant to the authority granted by Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Regulation 299 of the ICDR Regulations, with the objective of safeguarding the interests of investors in securities and fostering the orderly development and regulation of the securities market.
Challenges in Compliance:
Despite regulatory frameworks, it’s been observed that some draft offer documents fail to comply with the instructions outlined in Schedule VI of the ICDR Regulations. These deficiencies often require revisions and lead to prolonged processing times, causing inconvenience to both issuers and investors. Recognizing this issue, SEBI aims to streamline the compliance process while ensuring completeness and clarity in offer documents.
Introducing Guidelines for Offer Document Compliance:
To address these challenges, SEBI has introduced ‘Guidelines for returning draft offer documents and its resubmission.’ These guidelines aim to provide greater clarity, consistency, and efficiency in the disclosure process, ultimately enhancing investor protection and confidence in the primary market.
Key Highlights of the Guidelines:
The draft offer documents will be evaluated based on broad guidelines and instructions provided under Schedule VI of the ICDR Regulations. Draft offer documents found non-compliant with the prescribed instructions will be returned to the issuer for revisions. This step ensures that only comprehensive and compliant documents proceed further in the process. The specific guidelines for returning draft offer documents and its resubmission are detailed in Annexure A of the circular, providing issuers with clear parameters for compliance.
In a bid to enhance the ease of doing business, SEBI has waived any fees associated with the resubmission of draft offer documents returned based on these guidelines. This initiative reduces financial burdens on issuers and encourages swift compliance.
The SEBI, in its circular, instructed the recognized stock exchanges to ensure that the provisions outlined in this circular are communicated to the listed entities and are also made available on their respective websites.
A copy of this circular can be accessed on the SEBI website at www.sebi.gov.in under the section “Legal”→ Circulars”.
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