Panel recommends observations can be part of disclosure norms

The Sebi-appointed standing committee on disclosures, headed by Yezdi H. Malegam, has recommended that a number of the “standard observations”, which are issued by the regulator in response to draft offer documents be made a part of the Disclosure and Investor Protection (DIP) guidelines, 2000. The move is aimed at simplifying the disclosure guidelines and expediting the initial public offer (IPO) process.

The panel has also suggested that some of the standard observations, which have outlived their utility should be scrapped and a few of them incorporated in a “must-do” list for lead managers. The panel has submitted its recommendations on standard observations to Sebi which will take a final decision on the issue shortly. Standard observations are those issued by Sebi in response to the draft offer document submitted by the lead manager to an issue. Through these observations, Sebi lists out certain requirements which are common across all the issues. These are in addition to issue-specific observations made by it. A Sebi official said, “The Malegam panel has submitted its recommendations on standard observations to Sebi. It has suggested to include some of them as a part of the DIP Guidelines. The Sebi board will now take a final view on it”.