Introduction of ISD and Dissemination of Issue Advertisements: SEBI

Shubhangi Jain

24 May, 2024

SEBI, vide its circular dated 15^th February 2023, announced the Introduction of ISD and dissemination of issue advertisements. The circular discussed the purpose of introducing ISD, its format and dissemination on the websites of Stock Exchanges and Depositories. The present article shall discuss the aspects covered in this circular in a detailed manner to provide a better understanding of the same.

Aspects Covered in the Circular

For the purpose of facilitating the consumption of data by stakeholders like researchers, policymakers, market analysts, and market participants regarding public issues, further issues, buybacks, and offers under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“SEBI SAST Regulations”) and SEBI (Delisting of Equity Shares) Regulations, 2021 (“SEBI Delisting Regulations”), etc.,  a decision has been made for making available relevant information/data points at the Stock Exchanges and Depositories in a structured manner.

1. Accordingly,  subsequent to the consultation with the stakeholders, an Issue Summary Document (ISD) has been designed which  shall be introduced in  the ISD for the following, in XBRL (Extensible Business Reporting Language) format:
   • Public issue of specified securities (initial/further public offer);
   • Further issues qualified institutions placement (QIP), preferential issue, rights issue, issue of American Depository Receipts (ADR), Global Page Depository Receipts (GDR) and Foreign Currency Convertible Bonds (FCCBs)};
   • buy-back of equity shares (through a tender offer or from the open market);
   •  open offer under SEBI SAST Regulations;
   • voluntary delisting of equity shares wherein exit opportunity is required under SEBI Delisting Regulations.
     The filing of ISD shall be done in 2 stages: i. In the 1st stage, ISD will be filed consisting of pre-issue / offer fields.
2. In the second stage, the filing of  ISD  shall be containing post-issue / offer fields after allotment/offer is completed / as applicable for the respective ISD.
   The formats for ISD are mentioned in Table I to Table X  in the following manner.
   • Table I: ISD for the  public issue of specified securities
   • Table II: ISD for the  preferential issue of specified securities
   • Table III: ISD for qualified institutions placement
   • Table IV: ISD for  the rights issue of specified securities
   • Table V: ISD for the issue of American Depository Receipts (ADRs) / Global Depository Receipts (GDRs)
   • Table VI: ISD for the issue of Foreign Currency Convertible Bonds (FCCBs)
   • Table VII: ISD for the  buy-back of equity shares through a tender offer
   • Table VIII: ISD for  the buy-back of equity shares from the open market
   • Table IX: ISD for the  open offer under SEBI SAST Regulations
   • Table X: ISD for  the voluntary delisting of equity shares where exit opportunity is required

The prescribed formats also enumerate the timeline for submitting the details and also cast responsibility on the entity responsible for the submission ie the Submitting Entity”.

There is a need of  developing a utility in order by for  Stock Exchange(s) (SE) facilitating the filing of the ISD by Submitting the Entity. The Submitting Entity shall be filing the details, as applicable, in the format of any stock exchange where the securities of the entity regarding which the ISD is being filed are being listed/proposed to be listed.

The SE, which receives the ISD, shall further transmit, as soon as possible, the information to other Stock Exchanges and Depositories for dissemination.

Dissemination on the websites of SE and Depositories:

1.  Depositories and SEs shall arrange the necessary infrastructure for giving effect to the provisions of the present circular.
2. ISD should be disseminated through websites of the Recognised Stock Exchanges (where the entity is listed/is proposed to be listed) and the Depositories.
3. All entities involved in the process are advised to take necessary steps to ensure compliance with this circular.  Implementation in phases:
   • In the first phase, the roll-out would be of ISD for public issues of specified securities, for offer documents filed on or after March 01, 2023.
   • In the second phase, there shall be the implementation of ISD for further issues from April 03, 2023.
   • In the 3rd phase, ISD for open offer, buy-back and voluntary delisting shall be implemented from May 02, 2023.

Further, Lead Managers must disseminate all advertisements regarding a public issue under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“SEBI ICDR Regulations”) in pdf format on the website of the stock exchanges from 01.03.23

The recognized Stock Exchanges and the Depositories have been given a direction to

• Notify the provisions of this circular to the notice of all registered merchant bankers, listed entities and issuers and also disseminate the same on their websites;
• Communicate the status of implementation of the provisions of this circular within 7 days of implementation and in their Monthly Developments Reports to SEBI. 

Conclusion

The Circular regarding the Introduction of ISD and dissemination of issue advertisements is issued by the board in the exercise of the powers conferred u/s 11 and Section 11A of the SEBI Act, 1992, for protecting the interests of its investors and promoting the development of and to regulating the securities market.

Also Read: SEBI Guidelines to Securities Market Intermediaries – Under the PMLA 2002