SEBI’s mandate on ‘Audio-Video’ Disclosure

Public issue offer documents now include audio-visual (AV) presentations of disclosures made by the Securities and Exchange Board of India (SEBI). The AV presentations will cover key disclosures from the Red Herring Prospectus (RHP), Price Band Advertisement, and Draft Red Herring Prospectus (DRHP), per a circular released by SEBI on May 24, 2024.

According to SEBI requirements, the AV must include information about the company’s business, promoter, management, financials, outstanding legal matters, risks, and other data that are typically included in the draft red herring prospectus (DRHP).

The following guidelines shall govern the contents of the AV. –

1. According to Schedule IX of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, AV must abide by the rules pertaining to “Public communications and publicity materials.”

2. “Investors are advised not to rely 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,” the statement to investors reads. It is recommended that when making investment decisions, investors solely depend on the data presented in the Offer document and Price Band Advertisement.

3. All of the audiovisual versions combined will last for about ten minutes each.

4. The entire duration of the AV will be divided equally to cover material disclosures made under different sections of the DRHP and RHP, including those regarding the company, risk factors, capital structure, objectives of the offer, issuer’s business, promoters, management, financial data summary, litigations, material advancements, and terms of the offer, among other things.

5. The AV’s material must be accurate, non-repetitive, non-promotional, and free of any kind of deception.

6. Additionally, the Issuer and AIBI’s internet and social media platforms will make the AV available. The internet addresses of the Lead Managers to the issue and the Stock Exchanges will both include the web connection to the aforementioned AV.  The QR code for the public issue, which is provided in offer-related documents, will be used to access the AV.

7. On the date of publication of the price band advertising or the date of prospectus filing (in the event of fixed price issues), the AV will be updated with the information disclosed in the RHP, prospectus, and price band advertisement, including details of the issue opening and closing dates, price, and price band, among other information.

The use of Audio-Visual Presentations for Public Issue Disclosures by SEBI is a noteworthy advancement in improving investor protection against unsolicited or unauthorized information on public problems and increasing transparency. These recommendations are anticipated to boost investor trust and foster an investor-friendly capital market by bringing disclosure procedures into line with changing investor expectations and technology improvements. With this initiative, investors will save time and be guaranteed to obtain the essential information required to make well-informed decisions.