Securities and Exchange Broad of India
Parag Basu
Deputy General Manager
Corporation Finance Department
Division of Issues and Listing
Tel: +9122 22164728(D) 22164428/29 (Extn:221)
Fax: +91 22 22164482
Email: paragb@sebi.gov.in
SEBI/CFD/DIL/DIP/24/2006/18/10
October 18, 2006
To All Registered Merchant Bankers/
Stock Exchanges
Dear Sirs,
Sub.: Amendments to SEBI (Disclosure and Investor Protection) {DIP} Guidelines, 2000.
1. In order to make Indian primary market more efficient and transparent, it has been decided to adopt the following policy:
2. The SEBI (DIP) Guidelines, 2000 are being amended to give effect to the above policy. A copy of the amendment is enclosed at Annexure I.
3. Applicability
The amendments made vide this circular shall come into force with immediate effect.
4. This circular is being issued in exercise of the powers conferred under sub-section (1) of Section 11 of the Securities and Exchange Board of India Act, 1992.
5. This circular, along with the annexure, is available on SEBI website at www.sebi.gov.in. The entire text of SEBI (DIP) Guidelines, 2000, including the amendments issued vide this circular, is also available on SEBI website under the category “Issues and Listing”.
Yours faithfully,
PARAG BASU
Encl.: a/a
ANNEXURE I
AMENDMENTS TO SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000
CHAPTER IX
GUIDELINES ON ADVERTISEMENT
2. Clause 9.1.15 shall be substituted by the following:
“9.1.15 No product advertisement of an issuer company shall contain any reference, directly or indirectly, to the performance of the issuer company during the periods mentioned in clause 9.1.14 and clause 9.1.14A.”
“9.1.14 All public communications and publicity material, including corporate and product advertisements of the issuer company, interviews by its promoters, directors, duly authorized employees or representatives of the issuer company, documentaries about the issuer company or its promoters, periodical reports and press releases, issued or published in any media during the period commencing from the date of the meeting of the Board of Directors of the issuer company in which the public or rights issue, as the case may be, is approved till the date of filing draft offer document with SEBI, shall be consistent with its past practices.
Provided that where such public communication or publicity material is not consistent with the past practices of the issuer company, it shall be prominently displayed or announced in such public communication or publicity material that the issuer company is proposing to make a public or rights issue of securities, as the case may be, in the near future and is in the process of filing a draft offer document with SEBI.
9.1.14A All public communications and publicity material, including corporate and product advertisements of the issuer company, interviews by its promoters, directors, duly authorized employees or representatives of the issuer company, documentaries about the issuer company or its promoters, periodical reports and press releases, issued or published in any media during the period commencing from the date of filing draft offer document with SEBI till the date of allotment of securities offered in the issue, shall comply with the following:
(a) It shall be prominently displayed or announced in such public communication or publicity material that the issuer company is proposing to make a public or rights issue of securities, as the case may be and has filed a draft offer document with SEBI or has filed the Red Herring Prospectus / Prospectus with the Registrar of Companies or the Letter of Offer with the Designated Stock Exchange, as the case may be.
(b) It shall further be stated in such public communication or publicity material that the draft offer document, Red Herring Prospectus or final offer document, as the case may be, is available on SEBI website at www.sebi.gov.in as well as on the Lead Managers’ websites <urls to be given>.
(c) Such public communication or publicity material shall contain only factual information and shall not contain projections, estimates, conjectures, etc.
(d) Such public communication or publicity material shall also not contain any information which is extraneous to the draft offer document filed with SEBI or the Red Herring Prospectus / Prospectus filed with the Registrar of Companies or the Letter of Offer filed with Designated Stock Exchange, as the case may be.
9.1.14B The issuer company shall make prompt, true and fair disclosure of all material developments taking place during the period mentioned hereunder, relating to its business and securities and also relating to the business and securities of its subsidiaries, group companies, etc., which may have a material effect on the issuer company, by issuing public notices in all the newspapers in which the issuer company had issued pre-issue advertisement under clause 5.6.A:
(a) In case of a fixed price public issues, between the date of filing final prospectus with the Registrar of Companies and the date of allotment of securities offered in the public issue.
(b) In case of a book built issue, between the date of filing the Red Herring Prospectus with the Registrar of Companies and the date of allotment of the securities offered in the issue.
(c) In case of a rights issue, between the date of filing the Letter of Offer with the Designated Stock Exchange and the date of allotment of the securities offered in the rights issue.”
Pre-Issue Publicity:
Presently, the SEBI (DIP) Guidelines 2000 do not contain specific provisions on pre-issue publicity made during the period prior to filing draft offer document with SEBI. In order to regulate pre-issue publicity by companies proposing to make a public or rights issue, it has now been decided to introduce provisions such as, ensuring that publicity made during the period commencing from the date of approval of the issue by the Board of Directors of the issuer company till the allotment of shares in the issue is consistent with the past practices and does not contain projections, estimates or any information extraneous to the offer document.
