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Mumbai, March 12 Capital markets regulator SEBI has proposed to do away with certain existing disclosure requirements for rights issue documents to facilitate faster completion of the issue process.

(SEBI recently amended the guidelines relating to timelines for rights issue, which has resulted in an overall reduction of more than two months in the process. Other measures that werre under consideration relate to electronic trading of rights entitlement.)

Relating to the currently proposed modifications, SEBI observed that certain information about the issuing entities are already available in the public since the companies are already listed. The issuer company will now need to disclose the standalone and consolidated financial statements for the previous financial year plus the stub period only, as against the existing requirement of disclosure for the preceding five years, a discussion paper released by SEBI said.

The requirement to disclose change in accounting policies is also proposed to be done away with.

The SEBI Committee on Disclosure and Accounting Standards, which was constituted for examining the issue, has also recommended that only disclosure “material outstanding litigations” are to be preferred, and has otherwise recommended doing away with disclosing details of litigations.

Among the other SEBI proposals, the issuing company will now need to disclose only those risk factors which are in relation to the rights issue and objects of the rights issue, or on ongoing business activities.

Disclosure with regards to the industry and the business of the issuer company is also proposed to be done away with.

The requirement to disclose details about the Board of Directors and about bankers to the company as a part of the general information is also proposed to be done away with.

Such a set of revised disclosures would be applicable in rights issues of listed entities who comply with certain conditions, the SEBI committee said. The disclosures would apply only to those companies who been filing their statements and information periodically in compliance with the listing agreement for the last three years, and which are available on Web site of a stock exchange, SEBI said.

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