The Securities and Exchange Board of India (SEBI) issued Circular No. SEBI/HO/CFD/CFD-TPD-1/P/CIR/2024/55 on May 24, 2024, directed at recognized stock exchanges, registered merchant bankers, and the Association of Investment Bankers of India (AIBI). The circular addresses the requirement for audiovisual (AV) presentations of disclosures made in public issue offer documents to enhance investor awareness and discourage reliance on unauthorized information.
Key Points of the Circular:
1. Objective: SEBI aims to ensure investors do not rely on unauthorized or unsolicited information regarding public issues. To this end, a draft of the circular was posted on the SEBI website on March 19, 2024, for public comments.
2. Implementation of AV Disclosures: Based on stakeholder feedback, SEBI has mandated that key disclosures in the Draft Red Herring Prospectus (DRHP), Red Herring Prospectus (RHP), and Price Band Advertisement for public issues must be made available in AV format. This initiative is intended to make it easier for investors to understand the features of public issues. Initially, these AV presentations will be available in both English and Hindi, with Hindi text in Devanagari script.
3. Guidelines for AV Content:
- Compliance: The AV must comply with the provisions regarding “Public communications and publicity materials” as outlined in Schedule IX of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
- Disclosure Statement: Each AV must include a disclaimer advising investors to avoid relying on any other sources of information about the public issue found online or on social media platforms and to depend solely on the offer document and Price Band Advertisement.
- Duration: Each bilingual AV should be approximately 10 minutes long.
- Content Distribution: The AV should cover material disclosures from various sections of the DRHP and RHP, including company information, risk factors, capital structure, offer objectives, business details, promoter information, management details, financial summaries, litigations, material developments, and offer terms.
- Content Nature: The AV must be factual, non-repetitive, non-promotional, and should not mislead investors.
4. Availability and Distribution:
- The AV must be uploaded on the issuer’s and AIBI’s websites within five working days of filing the DRHP with SEBI. For documents pre-filed under CHAPTER IIA of SEBI regulations, the AV must be made available within five working days of filing the Updated Draft Red Herring Prospectus-I.
- The AV should also be available on digital and social media platforms of the issuer and AIBI. Additionally, the web link to the AV should be accessible via the websites of stock exchanges and lead managers to the issue. The AV must also be accessible through a QR code provided in offer-related documents.
5. Updates and Accuracy:
- The AV should be updated with the information from the RHP/prospectus and the price band advertisement, including details about the issue opening/closing date and price/price-band. These updates should be uploaded on the date of the price band advertisement publication or the filing date of the prospectus for fixed price issues.
- Issuers and lead managers are responsible for ensuring the accuracy and content of the AV.
6. Applicability:
- The provisions of this circular apply to all DRHPs filed with SEBI on or after July 1, 2024, on a voluntary basis.
- From October 1, 2024, the provisions become mandatory.
Issuance and Enforcement: The circular is issued under the powers conferred by Sections 11 and 11A of the Securities and Exchange Board of India Act, 1992. These measures aim to protect investor interests and promote the development and regulation of the securities market. The full circular is available on the SEBI website under the category: ‘Legal → Circulars’.
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Securities and Exchange Board of India
Circular No. SEBI/HO/CFD/CFD-TPD-1/P/CIR/2024/55 Dated: May 24, 2024
To
Recognized Stock Exchanges
Registered Merchant Bankers
Association of Investment Bankers of India (AIBI)
Dear Sir / Madam,
Sub: Audiovisual (AV) presentation of disclosures made in Public Issue Offer Documents
1. In order to create awareness among investors to not rely on unauthorized/unsolicited information about public issues, a draft of this circular on the captioned subject was placed on SEBI website for public comments on March 19, 2024.
2. Based on comments received from various stakeholders, it has been decided that salient disclosures made in the Draft Red Herring Prospectus (DRHP), Red Herring Prospects (RHP) and Price Band Advertisement for public issues shall also be made available in Audio Visual format (AV) for ease in understanding the features of public issues. Such AV shall be prepared and placed in the public domain for all main board public issues. The same shall initially be in bilingual format i.e. English and Hindi. The Hindi version shall contain text in Devanagari script.
3. The contents of the AV shall be as per the following guidelines –
3.1. AV to be in compliance with the provisions regarding “Public communications and publicity materials” prescribed under Schedule IX of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
3.2. It shall contain the following disclosure to investors –
“Investors are advised not to rely on any other document, content or information provided in respect to the public issue on the internet/online websites/social media platforms/micro-blogging platforms by finfluencers.
Investors are advised to rely only on the information contained in the Offer document and Price Band Advertisement for making investment decision.”
3.3. The duration of each bilingual version of the AV shall be approximately 10 minutes.
3.4. The total duration of the AV shall be equitably distributed to cover material disclosures made under various sections of the DRHP and RHP viz. about the company, risk factors, capital structure, objects of the offer, business of the issuer, promoters, management, summary of financial information, litigations, material developments and terms of the offer etc.
3.5. The content of the AV must be factual, non-repetitive, non-promotional and shall not be misleading in any manner.
4. The AV shall be uploaded on the website of the Issuer and Association of Investment Bankers of India (AIBI) within 5 working days of the filing of DRHP with SEBI. In case of pre-filing of draft offer document under CHAPTER IIA of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, the AV shall be made available within 5 working days of filing Updated Draft Red Herring Prospectus -I, as defined under Clause 59A of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
5. The AV shall also be made available on digital/social media platforms of the Issuer and AIBI. The web link of the said AV shall be made available on the websites of the Stock Exchanges and the Lead Managers to the issue. The AV shall be made accessible through QR code (as made available in offer related documents) pertaining to the public issue.
6. The AV shall be updated with information disclosed in RHP/ Prospectus and price band advertisement including details of the issue opening/closing date, price/ price-band etc., and uploaded on the date of publication of the price band advertisement or the date of filing of prospectus (in case of fixed price issues).
7. The Issuer and all Lead Managers to the public issue shall be responsible for the content and information made available in the AV.
Applicability of this circular
8. The provisions of this circular shall be made applicable to all DRHP filed with SEBI-
i. On or after July 01, 2024 on Voluntary basis;
ii. October 01, 2024 onwards on Mandatory basis;
9. This Circular is being issued in exercise of the powers conferred under Section 11
and Section 11A of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
10. This circular is available on SEBI website at sebi.gov.in under the category: ‘Legal → Circulars’.
Yours faithfully,
E Balasubramanian
General Manager
Corporation Finance Department
Phone: +91-022-26449195
Email: ebala@sebi.gov.in
