Debt securities public issue: SEBI Issues New Disclosure Format for Abridged Prospectus
The Securities and Exchange Board of India (SEBI) has revised the format of the abridged prospectus for public issuance of non-convertible debt securities.
The new format requires that critical information, such as the name of the instrument, base size, face value, coupon rate, issue opening and closing dates, and rating, be prominently displayed on the front page of the offer document. The issuer or merchant bankers should also include a Quick Response (QR) code so that investors can easily access the full prospectus by scanning the code.
The inclusion of the QR code in the abridged prospectus is expected to make it easy for investors to access the full prospectus electronically, which is especially important for investors who are not able to visit a physical location to obtain a copy of the prospectus.
SEBI has revised the format of the abridged prospectus to make it simpler, clearer, and more consistent across different documents. The new format will be effective for all public issues opening on or after October 1, 2023.
According to the regulations, no application form for the purchase of securities from a company can be issued unless it is accompanied by an abridged prospectus.
Under the revised format, an issuer must prominently disclose the name of the instrument, its base size, face value, the option to retain over-subscription, coupon details, issue opening and closing dates, instrument rating, and the name of the exchange where the instrument will be listed on the front page of the abridged prospectus.
The issuer must also disclose in the abridged prospectus details of the promoter, their experience and educational qualifications, details of the board of directors, a business overview, risk factors, the objects of the issue, and the issue procedure.
SEBI has said that a copy of the abridged prospectus will be made available on the websites of the issuer, merchant bankers, and registrar to the issue. A link for downloading the prospectus will also be provided in the advertisement for the public issue.
The issuer or merchant bankers must also insert a Quick Response (QR) code on the last page of the prospectus so that investors can access the full prospectus by scanning the code.
Moreover, the issuer or merchant bankers must also insert a Quick Response (QR) code on the front page of the documents, such as the front outside cover page and advertisement, as they deem fit.
In addition, they must ensure that the disclosures in the abridged prospectus are sufficient, truthful, and free of any deception or misrepresentation.