SEBI has revised timelines for issuance of observations on a draft offer document to provide more clarity for cases where adverse proceedings are probable or ongoing against the issuer or its directors, promoters or group companies.

1. Introduction

When an offer document is filed by an issuer with the Securities and Exchange Board of India (SEBI), SEBI on its review can either prohibit the company from issuing the prospectus or offer document or provide observations specifying conditions subject to which these can be issued.

On 8 December 2006, SEBI issued the SEBI (Issuing Observations on Draft Offer Documents Pending Regulatory Actions) Order, 2006 (2006 Order) to formalise the issuance of observations on draft offer documents filed for a public offering (Observations), where an investigation, enquiry, adjudication, prosecution or other regulatory action is pending against the issuer or its promoters/directors/group companies (collectively, the Parties). On 5 February 2020, the 2006 Order has been replaced by the SEBI (Issuing Observations on Draft Offer Documents Pending Regulatory Actions) Order, 2020 (General Order) to streamline and bring certainty to timelines for the issue of Observations by SEBI.

SEBIs Revised Framework For Issuance Of Observations On Draft Offer Documents In Public Offerings

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