Disclosures in the abridged prospectus and front cover page of the offer Document
Summary
This circular revises the disclosure formats for abridged prospectuses and front cover pages of offer documents to enhance clarity and consistency. It mandates that all issues opening after February 4, 2022, must adhere to the new formats specified in Annexure A and Annexure B. Issuer companies and merchant bankers are required to ensure disclosures are accurate, substantiated with KPIs, and include QR codes linking to full documents. This section outlines general investment risks, disclaimers regarding SEBI's role, and procedures for obtaining application forms. It details price information disclosures for Merchant Bankers and lists required contact details for various intermediaries involved in the issue. Additionally, it mandates specific disclosures regarding promoters, business overview, board composition, objects of the issue, financials, and shareholding patterns. This section outlines the disclosure requirements for internal risk factors and outstanding litigations in a Red Herring Prospectus. It mandates specific tables for summarizing legal proceedings against various entities including the company, directors, and promoters. The part concludes with a formal declaration by
Text
Section 2(1) of the Companies Act, 2013 defines an abridged prospectus as a memorandum containing such salient features of a prospectus as may be specified by SEBI.
In terms of Regulation 34(1) ICDR Regulations, abridged prospectus shall contain the disclosures as specified in Annexure I of Part E of Schedule VI of ICDR Regulations.
Section 33(1) of the Companies Act stipulates that every application form for the purchase of any securities of a company shall be accompanied by an abridged prospectus.
The format for disclosures in the abridged prospectus has been revised and is placed at Annexure A of this Circular to simplify and provide greater clarity.
Clause 1(a) of Part A - Schedule VI of the ICDR Regulations specifies information to be disclosed on the front outside cover page of offer document.
A format for disclosure on front outside cover page shall be as per the format placed at Annexure B of this Circular.
This Circular shall be applicable for all issues opening after the date of this Circular, replacing previous annexures with Annexure A and B.
A copy of the abridged prospectus shall be made available on the website of issuer company, lead managers, registrar to an issuers and a link for downloading abridged prospectus shall be provided in price band advertisement.
The Issuer Company / Merchant Bankers (MBs) shall ensure that the disclosures in the abridged prospectus are adequate, accurate and does not contain any misleading or mis-statement.
The Issuer Company/MBs shall ensure that the qualitative statements in the abridged prospectus shall be substantiated with Key Performance Indicators (KPIs) and other quantitative factors.
The issuer company/ MBs shall insert a Quick Response (QR) code on the front page of the documents such as front outside cover page, abridged prospectus, price band advertisement, etc. as deemed fit by them.
The recognized stock exchanges are directed to bring the provisions of this circular to the notice of the listed companies and also to disseminate the same on their website.
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Source: SecMarx — Disclosures in the abridged prospectus and front cover page of the offer Document. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.