The Hindu Business Line : SEBI modifies guideline on risk factors display

PUBLIC issue advertisements on TV can no longer list risk factors that are scrolled down faster than the speed of light. The Securities and Exchanges Board of India has specified that a clear statement instructing investors to refer to the red herring prospectus for risk factors has to be made.

As part of SEBI's endeavour to ensure efficiency in the market, the guideline has also been modified to ensure that the facility of shelf prospectus can be availed of by specific entities like public sector banks, scheduled banks and public financial institutions.

Also, the guidelines pertaining to preferential allotment have been amended to restrict sale of shares by shareholders who are allotted shares on preferential basis, to impose lock-in on pre preferential shareholding from the relevant date till six months after date of allotment, to reduce the period of allotment from existing 30 to 15 days, to facilitate corporate debt restructuring schemes and others, according to a SEBI circular.

These amendments will come into force with immediate effect, stated SEBI.

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