SEBI offers guidelines for revising public-offer documents for better flow of business

On February 6, India’s market regulator released a series of rules designed to speed up the processing of public-offer documents and provide investors with more information.

The Securities and Exchange Board of India (Sebi) has released recommendations in a circular regarding the return of draft offer documents and their subsequent submission.

The circular mentioned, “It has been observed that at times, draft offer documents / draft letter of offer filed with the Board for public issue / rights issue of securities (hereinafter “draft offer document”) are found lacking in compliance with respect to instructions provided under Schedule VI of ICDR Regulations. Such documents require revisions/changes and thus lead to a longer processing time.”

Among other things, the issuers have been advised to stay away from using legalese or technical language, complicated presentations that could make the disclosures’ content difficult to understand, and repeating disclosures in several parts that don’t enhance the quality of the information.

After the document is returned, the issuer must make sure to seek out and take corrective action with the appropriate regulator before resubmitting the document if any other regulatory authority or enforcement agency has indicated material concern about the issue or draft offer document.

The circular further stated that in order for the draft offer document to be resubmitted, it is imperative that the lead manager and the issuer make sure that it satisfies all applicable laws and regulations, including the ICDR Regulations, and that any deficiencies for which it was returned are addressed.