On 4-9-2023, the Securities and Exchange Board of India (‘SEBI’) notified new format of Abridged Prospectus for public issues of Non-convertible Redeemable Preference Shares to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Applicability:
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all public issues opening on or after 1-10-2023.
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Public issues that open on or after October 1, 2023, the format of an Abridged Prospectus will be as per Annex-I of this Circular instead of Part B of Schedule I of the Non-Convertible Securities Regulations, 2021 (‘NCS Regulation’).
Key Points:
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Object- to further simplify, provide greater clarity and consistency in the disclosures across various documents and to provide additional but critical information.
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Duties of Issuer/ Merchant Bankers:
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To ensure that the disclosures in the Abridged Prospectus are adequate, accurate and do not contain any misleading or misstatement.
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To ensure that the qualitative statements in the Abridged Prospectus should be substantiated with quantitative factors.
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To ensure that qualitative statement will be made which cannot be substantiated with quantitative factors.
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Chapter II (Application form and Abridged Prospectus) of the Master Circular dated 10-8-2021 will contain the contents of this circular relating to issue and listing of Non-convertible Securities, Securitized Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper.
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Annexure I of the Prospectus contains the following:
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Name and logo of the issuer
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Brief description of the issue
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General risks
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Issuer’s Absolute Responsibility
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Credit Rating
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Listing
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Promoters of the Issuer
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Board of Directors
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Business overview
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Risk factors
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Summary of Outstanding litigations, claims and regulatory action
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Material Development
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Declaration by the Issuer
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Financial Highlights
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Objects of the Issue
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Issue Procedure
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