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In a landmark move aimed at enhancing transparency and investor protection, the Securities and Exchange Board of India (SEBI) has mandated the inclusion of audio-visual disclosures in public issue offer documents. This new regulation, announced on May 25, 2024, requires companies to provide comprehensive, easy-to-understand video and audio explanations of their offer documents alongside traditional text-based formats.

The decision comes in response to concerns that many retail investors find traditional offer documents overly complex and difficult to comprehend. SEBI’s new mandate aims to demystify these documents, ensuring that investors have a clear understanding of the financial instruments they are investing in.

SEBI Chairperson Madhabi Puri Buch stated, “This initiative is part of our continuous efforts to protect retail investors and enhance market transparency. By making information accessible through audio-visual means, we are empowering investors to make more informed decisions.”

Under the new regulations, companies must include audio-visual presentations that cover key aspects of the offer, including the company’s business model, financial statements, risk factors, and the use of proceeds. These presentations must be available in English and at least one regional language, ensuring broad accessibility.

Market experts have lauded the move, predicting that it will significantly improve investor engagement and confidence. “This is a progressive step towards making financial information more accessible and understandable to the average investor,” commented financial analyst Anil Kumar. “It aligns with global best practices and reflects SEBI’s commitment to protecting investors’ interests.”

The mandate will come into effect from July 1, 2024, giving companies ample time to comply with the new requirements. SEBI has also indicated that it will conduct regular audits to ensure adherence to the new norms.

This innovative approach marks a significant shift in the Indian securities market, setting a new standard for transparency and investor education.

Name – Supriya, course – B.A.LL.B, S.S khanna Girls’ Degree College, UoA, Intern under legal Vidhiya.

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