IPO Watch: SEBI offers confidential “pre-filing” of documents to protect

IPO Watch: The Securities and Exchange Board of India (SEBI) has offered to allow companies to submit a confidential “pre-filing” document to protect their sensitive business information, subject to the stock market initial public offering (IPO).

The initial offer document only needs to be filed with the market regulator and the stock exchange and the regulator can decide whether the company will go public after issuing its observations, a PTI report quoted SEBI’s proposal as saying.

Currently, companies in India first file a draft prospectus (draft red herring prospectus) with SEBI containing regulatory releases, which are made public for comment for at least 21 days. Subsequently, after incorporating any moderator and other opinions, a final prospectus is again submitted for approval.

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SEBI said one of the concerns for companies was the disclosure of such sensitive information in their draft offer documents, “which could be beneficial to its competitors, without assuring that the initial public issue will be implemented.”

Globally, countries including the United States and Canada allow confidential “pre-filing” with regulators before a company decides to go ahead with an IPO, Sebi said.

SEBI is seeking comments from the public on its new proposal by June 6 Such proposals are usually raised by the market regulator and there is no guarantee that it will be implemented as a policy.

With input from PTI

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