Any Draft Offer Documents filed with SEBI, if not clear and complete, may now be returned back by the Capital Market Regulator. SEBI vide its circular dated February 06, 2024, has introduced Guidelines for the same.
The said Guidelines will do away with to-and-fro correspondence between the Issuer and the Regulator for the revisions or changes in Draft Offer Documents and thereby facilitating timely processing of Draft Offer Documents.
Listed Companies/About to be Listed Companies, to please ensure that the Draft Offer Documents as filed with SEBI are complete as per the provisions of Schedule VI of SEBI ICDR Regulations in all respects to avoid any possible delays.
The Brief of the Guidelines are as follows:
i. Grounds for Returning of Draft Offer Document by SEBI:
- Un-definite language: Not clear, concise and in simple and intelligible language
- Complexity & Inconsistency: Use of Complex presentation, vague, ambiguous, and imprecise explanations, repetitions, and inconsistency in number/data/facts.
- Ambiguity in Risk Factors: If Risk factors prepared are not clear, concise, and are ambiguous.
- Modification in Key Disclosures: Requirement of Substantial revision/addendum for key disclosures.
- In-correct Regulatory Interpretation: Requirement of corrective measures on account of regulatory interpretation.
- Litigation impacting eligibility: Pending Litigation matters in any court/tribunal impacting eligibility criteria provided under SEBI ICDR Regulations.
- Material concerns expressed on draft offer document by any other regulatory/enforcement agencies.
- Not abiding general rules and regulations: No clear understanding of information of draft offer document without referring to general rules and regulations.
ii. Resubmission Process:
- Fees: No Fee required for resubmission.
- Disclosure of Resubmission: Public Announcement by Company within 2 days of resubmission of draft offer document with the Board, disclosing that it is a resubmitted document.
- Intimation to other agencies: Written intimation to sectoral regulators, if any informing about return and resubmission.
- Ensuring Completeness: Draft Offer Document shall be resubmitted only after addressing the insufficiency for which it was returned and shall be in compliance with SEBI ICDR Regulations and other applicable laws.
The Guidelines shall be applicable with immediate effect.