The Securities and Exchange Board of India (Sebi) is set to allow confidential pre-filing of offer documents to safeguard sensitive business information, says a report in the Economic Times (ET).
Currently, countries like the US and Canada allow confidential pre-filing with regulators.
The board also aims to relax open offer pricing norms for the disinvestment of public sector undertakings (PSUs); and seek enhanced disclosures from startups in offer documents on the IPO issue price for companies holding initial public offerings (IPOs), Economic Times reported.
The Sebi board meet scheduled for September 30, will also clear a proposal to bring buying and selling by mutual funds under insider trading rules. The Franklin Templeton episode in which some executives were accused of insider trading is behind the regulator’s decision to take this step.
For pre-filing, the companies need to make a public announcement that they have pre-filed offer documents with Sebi and exchanges.
The issuer company also has to clarify that pre-filing doesn’t necessarily mean it will hold an IPO.
A few months of data confidentiality will be significant for high-growth firms compared with more mature ones that have steady state revenues and margins.
Sebi may also approve a proposal to ease certain provisions in takeover code for disinvestment of PSUs. The board is likely to do away with the provision to take into account the 60 day, volume weighted average market price for calculating the open offer price for disinvestment of PSUs in case of an indirect acquisition of a company with PSU stake.
The regulator also said that information about a strategic disinvestment becomes public at the time of cabinet approval and subsequent announcements are made at different stages, which in turns affects the market price of the concerned PSU.