In order to ensure completeness of the offer document for investors and to provide greater clarity & consistency in the disclosure, SEBI vide circular dated 6th February 2024 have issued guidelines for returning of draft offer document and its resubmission.

The guidelines specifies return of draft offer document if the following are not satisfied: -

1. Draft offer document is drafted in simple language with visual representation of data, so as to ensure ease of understanding of its contents.

2. The information in the draft offer document is presented in a clear, concise, and intelligible manner.

3. The draft document should avoid

   1. complex presentation that may make substance of the disclosure incomprehensible.

   2. Vague, ambiguous and imprecise explanations which may lead to more than once interpretation.

   3. Complex information quoted or copies from legal documents, unless accompanied with clear and concise explanation of the provision therein

   4. Repetition of disclosures in different sections of the document which may increase the size of the document but does not improve the quality or efficacy of information, unless the context requires otherwise

   5. Inconsistency in the numbers/ data/ facts provided in different sections of the offer document or between the draft offer document and subsequent submission(s) made in response to clarifications sough

4. The risk factors are appropriately worded in simple, clear and unambiguous language to bring out clearly the risk to the investor, without undermining the same.

5. The draft document requires substantial revision or addenda on key disclosure, in accordance with the clarifications / explanations sought on the draft offer document and corrective measure on regulatory interpretation.

6. The information required to be included in the draft offer document is not clearly understandable without the necessity of referring to the general rules and regulations

7. Where any other regulatory authority/enforcement agencies has expressed material concern with regard to issue / draft offer document filed by the issue.

8. Where there are any pending litigation matters in any court or tribunal having an impact on the issue with regard to eligibility criteria provided under ICDR Regulations for the issue / draft offer document filed by the issuer.

The guidelines with respect to Resubmission of draft offer documents specified the following: -

1. While there shall be no requirement for payment of any fees on account of resubmission of draft offer document, the requirement for paying applicable fees for the changes, if any, in terms of changes specified in Schedule XVI of the ICDR Regulations for the updated offer document shall continue to apply as is applicable to issuer for updation in offer document

2. There shall be no refund of the filing fees on account of non-submission of draft offer document by the issuer after return.

3. The issuer, within two days of resubmission of draft offer document with the Board, shall make a public announcement in the mode and manner as prescribed under ICDR Regulations, as applicable, and the issuer shall also include a disclosure that it is a resubmitted document.

4. Issuer shall make written intimation to its sectoral regulator, if any, informing about the return and resubmission of the draft offer document, as applicable.

The existing procedure of OFS to employee of the eligible company is happening outside the stock exchange mechanism.

In order to enhance efficiency, ease of compliance and reduce costs, SEBI in discussion with Stock Market Advisory Committee of SEBI, Stock Exchanges and clearing corporation vide circular dated 23rd January 2024 has decided that promotors can also offer the shares to employees in OFS through the Stock Exchange Mechanism.

The procedure for OFS to employees through the Stock Exchange Mechanism is an additional option to the existing procedure of OFS to employees outside the exchange mechanism.

The said circular lays down the procedure for offering shares to the employees in OFS through stock exchange as under: -

1. OFS to employees shall be on T+1 day along with the retail category under a new category called as “Employee”

2. While bidding, the employee shall select “Employee” category for employee bids. However, the employees can also bid for other categories, as per the applicable limits.

3. For employee OFS, certain number of shares shall be reserved for the employees. The same shall be mentioned in the OFS notice to the stock exchanges by the promoter (s)

4. Bidding shall be allowed during trading hours on T+1 day only.

5. Floor price of the retail category shall be disclosed to the participants under the “Employee” category.

6. Employees shall place bids only at cut-off of T+1 day. The allotment price shall be based on the Cut-off of the retail category, subject to discount, if any.

7. The maximum bid amount shall be INR 500000.

8. Each employee Is eligible for allotment of equity shares up to INR 2,00,000. Provided that in the event of under-subscription in the employee portion, the unsubscribed portion may be allotted to such employees whose bid amount is more than INR 2,00,000, on a proportionate basis, for a value in excess of INR 2,00,000,subject to the total allotment to an employee not exceeding INR 5,00,000.

9. The employees shall pay upfront the margin to the extent of 100% of the order value in cash or cash equivalent

10. Bids for “Employee” category shall not be displayed on the stock exchange website.

11. The bid book of “Employee” Category shall be segregated from Retail Category book for allotment.

12. Allotment under the “Employee” Category shall be based on the PAN details of employees shared by the company on T-1 day. The PAN mis-matched bids shall be rejected.

13. The promotors shall transfer the total shares of OFS on T-1 day including shares reserved for “Employee” category, to the designated clearing corporation

In order to promote ease of doing business and to reduce the compliance burden the, Working Group formed for review of compliance requirements under SEBI (Mutual Funds) Regulations, 1996 have given their recommendation for public comments on the following: -

1. Appointment of single fund manager for domestic and overseas / commodity funds

2. Relaxation of nomination requirement for joint holders

3. Streamlining of prudential norms for passive schemes w.r.t exposure to a single issuer within AMC’s group companies.

In order to promote ease of doing business and to reduce the compliance burden the, EODB working group formed for review of present framework under PMS Regulations have given their recommendation for public comments on the following: -

1. Facilitate collective oversight of PMS distributor by making registration with Association of Portfolio Managers in india (APMI) mandatory for PMS distributors.

2. Facilitate ease of digital onboarding process for clients of Portfolio Managers.