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

SEBI mandates AV disclosures: The 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 the information in the draft red herring prospectus (DRHP), red herring prospectus (RHP), and price band advertisements more accessible and understandable for investors, reported a news agency.

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

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

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

The AV content must distribute its total duration equitably to cover essential disclosures across various sections of the 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 the AV content should be factual, non-repetitive, non-promotional, and not  misleading in any way. This move aims to enhance transparency and investor understanding in the public issue process.

(with PTI inputs)