SEBI mandates audio-visual disclosures for public issues in new guidelines

SEBI mandates AV disclosures: Securities and Exchange Board of India (SEBI) has announced new guidelines requiring key disclosures for main-board public issues to be presented in an audio-visual (AV) format. This initiative aims to make information in draft red herring prospectus (DRHP), red herring prospectus (RHP), and price band vertisements more accessible and understandable for investors, reported a news agency.

According to SEBI's circular issued on May 24, AV content must include a disclaimer vising investors not to rely on any or documents, content, or information found online or on social media platforms, including those shared by financial influencers, regarding public issue.

circular specifies that AV content should be available in both English and Hindi, with a duration of approximately 10 minutes. content must be uploed on issuer's website and Association of Investment Bankers of India (AIBI) within five working days of filing DRHP with SEBI.

new guidelines will be implemented voluntarily starting July 1, 2024, and will become mandatory on October 1, 2024. AV content must comply with “public communications and publicity materials” provisions under Schedule IX of SEBI’s Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018.

AV content must distribute its total duration equitably to cover essential disclosures across various sections of DRHP and RHP, including company information, risk factors, capital structure, offer objectives, issuer’s business, promoters, management, financial summaries, litigations, material developments, and offer terms.

SEBI stressed that AV content should be factual, non-repetitive, non-promotional, and not  misleing in any way. This move aims to enhance transparency and investor understanding in public issue process.

(with PTI inputs)