SEBI board meeting: Stricter IPO disclosure norms, nod for pre-filing

The Securities and Exchange Board of India (SEBI) during its board meeting on Friday brought in several important changes including disclosure of Key Performance Indicators (KPIs) in public issues.

Other mandates include allowing pre-filing of initial public offering (IPO), inclusion of units of mutual fund units under insider trading rules, framework to facilitate online bond platform providers, approval for appointment and removal of independent directors. The process includes flexibility and monitoring of QIPs. And the preferential issue moves on.

Issuers accompanying the IPO will have to disclose the KPI and the issuer’s cost per share under the ‘Base for issue price’ section of the offer document and in the price band based on past transactions and past fund raisings by the issuer from investors. advertisement.

“KPIs will differ for different companies in terms of the business model they follow. The disclosure will reduce information asymmetry for retail investors, unless they are forward-looking statements,” said SEBI Chairperson Madhabi Puri Buch.

The issuer shall disclose the details of pricing of shares based on past transactions and previous fundraising from investors based on secondary sale or acquisition of shares during the period of 18 months prior to the IPO. If there is no such transaction, the information shall be disclosed for the per share price of the issuing company based on the last five primary or secondary transactions not more than three years old prior to the IPO.

The board has given an option to the IPO issuers to pre-file the offer documents. The pre-filing mechanism will allow issuers to have limited negotiations without making any sensitive information public. In addition, the document containing the opening remarks of SEBI will be available to the investors for a minimum period of 21 days.

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Further, the board has decided to bring mutual fund entities under SEBI (Prohibition of Insider Trading) Regulations, 2015. Fe