SEBI proposes easing process of offer document
This will reduce repetitive information and streamline disclosures
The Securities and Exchange Board of India (SEBI) is considering simplifying the offer document preparation by introducing a template-based approach for relevant sections.
In its annual report for 2024-25, the market regulator suggested rationalising and optimising existing regulations, simplifying rules for foreign portfolio investors (FPIs), and expanding the permissible investment strategies under Specialised Investment Funds (SIFs).
Currently, SIFs allow asset management companies (AMCs) to offer limited strategies across equity, debt, and hybrid categories. SIF was introduced to bridge the gap between mutual funds (MFs) and portfolio management services (PMS) for portfolio flexibility. Under the framework, investors must invest Rs.10 lakh across all SIF strategies.
The report mentioned that offer documents were often large, complex, repetitive, and comprised detailed disclosures on several aspects of an issuer company. It was a challenge to work on.
Introduced in 2018, the SEBI ICDR (Issue of Capital and Disclosure Requirements) Regulations, which specify disclosures for public and rights issues, contain seven parts.
Though some rationalisation has been done since then, disclosure requirements have continued to grow. These will now be clarified.
The regulator stated, “It is proposed to simplify the offer document preparation process by designing a template-based approach for relevant sections of an offer document.”
Clarifying further, Tuhin Kanta Pandey, SEBI Chairman, said in the report that excessive or overlapping regulations could increase compliance costs and create operational rigidities. Therefore, regulatory redundancies will be removed to eradicate compliance burdens.
He added, “While stepping into 2025-26, the regulatory outlook remained steadfast. It was anchored in trust, guided by resolve to protect investors, and driven to support India’s Vision 2047.”
The regulator is initiating another priority. This is to simplify the FPI framework to attract long-term foreign capital. It involves streamlining processes, removing frictions, and strengthening engagement between FPIs and stakeholders. SEBI will continue to focus on investor awareness and education, including measures to alert investors about cyber fraud.