In a bid to make the primary market more efficient and transparent, market regulator Securities and Exchange Board of India (Sebi) has tightened the norms governing pre-issue publicity by companies that are planning to make an issue of securities.

Sebi has amended the Disclosure and Investor Protection (DIP) Guidelines to introduce “restrictions on pre-issue publicity" from the time the issuer company's board approves the issue till the actual allotment of shares in the issue.

The restrictions require an issuer to ensure that its publicity is consistent with its past practices, does not contain projections or estimates or any information extraneous to the offer document filed with Sebi.

The issuer company is also required to make prompt, true and fair disclosure of all material developments that take place during the period referred to above, relating to its business and securities and also relating to the business and securities of its subsidiaries, group companies, etc., which may have a material effect on the issuer company, by issuing public notices in newspapers.

Currently, Sebi rules do not contain specific provisions on pre-issue publicity made during the period prior to filing draft offer document with the Sebi.

Over 400 companies plan to raise around Rs 1,50,000 crore from the market in the coming weeks.

The market watchdog on MFs and VCFs

MUMBAI: Sebi has said that no “key personnel” of a mutual fund should be on the board of a venture capital fund, in order to avoid conflict of interest between the activities of mutual funds and venture capital funds. Key personnel would include the chief executive officer, chief investment officer, fund managers and head of other departments in a asset management company, according to a Sebi circular. Venture capital funds are given two months to comply with the Sebi circular.