Sebi mandates Audio-Visual disclosures for mainboard public issue

The regulator has also mandated a disclosure in the AV content asking investors not to rely on any other content distributed for example through finfluencers

Disclosures made in the draft red herring prospectus (DRHP), red herring prospectus (RHP) and price band advertisement for main-board public issues should be made in audio-visual (AV) format for ease of understanding, said a Sebi circular.

The AV content must also contain the disclosure that asks investors to not rely on on any other document, content or information provided in respect to the public issue on the internet/online websites/social media platforms/micro-blogging platforms by finfluencers.

Also read: MC Exclusive| BLS International: Social media and SMS campaign promotes stock; price rises nearly 4% in 3 days

The circular issued by the Securities and Exchange Board of India (Sebi) on May 24 also stated that the content should be available both in English and Hindi, that its duration should be approximately 10 minutes and that it should be uploaded on the website of the issuer and the Association of Investment Bankers of India (AIBI) within five working days of filing the DRHP with the regulator.

The provisions of the circular, which details how the AV content should be made, will become applicable on or after July 1, 2024, on a voluntary basis and October 1, 2024, onwards on a mandatory basis.

The AV content has to be in compliance with the provisions regarding “Public communications and publicity materials” prescribed under Schedule IX of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

The requirements that the AV needs to meet are regarding the distribution of various content and the presentation of the content.

The total duration of the AV shall be equitably distributed to cover material disclosures made under various sections of the DRHP and RHP viz. about the company, risk factors, capital structure, objects of the offer, business of the issuer, promoters, management, summary of financial information, litigations, material developments and terms of the offer etc.

The content of the AV must be factual, non repetitive, non-promotional and must not be misleading in any manner.