Audio Visual Disclosures for Mainboard Public Issues are now required by SEBI

SEBI regulator has required a notice in the AV material advising investors not to depend on any other content that is disseminated, such as that which is done through finfluencers.

According to a SEBI circular, disclosures provided in the price band advertisement, Red Herring Prospectus (RHP), and Draft Red herring prospectus (DRHP) for main-board public offerings shall be presented in audio-visual (AV) format for ease of comprehension. The disclosure that requests investors not to depend on any other document, material, or information on the public problem on the internet, online websites, social media platforms, or microblogging platforms by influencers must also be included in the AV content.

The Securities and Exchange Board of India (Sebi) released a circular on May 24 that stipulated the content should be available in Hindi and English, have a duration of roughly ten minutes, and be uploaded on the issuer's and the Association of Investment Bankers of India (AIBI) website within five working days of the DRHP being filed with the regulator. The circular's guidelines, which specify how the AV material should be created, will go into effect on July 1, 2024, at the latest, in a voluntary manner and on October 1, 2024, in a required manner. 

The audiovisual clip must adhere to the guidelines pertaining to "Public communications and publicity materials" as outlined in Schedule IX of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The AV system must comply with certain regulations for the dissemination and display of diverse media. 

To cover material disclosures made under different sections of the DRHP and RHP, such as those about the company, risk factors, capital structure, objectives of the offer, issuer's business, promoters, management, summary of financial information, litigations, material developments, and terms of the offer, etc., the entire duration of the AV will be distributed equally. The AV's material needs to be truthful, non-repetitive, non-promotional, and free of any kind of deception.