SEBI Simplifies Offer Documents to Help Investors Make Informed Choices

Market regulator Securities and Exchange Board of India (SEBI) has cleared several prominent reforms in the capital market in a board meeting held on Wednesday. Of these, the proposal to simplify the offer document for companies opting for fund raising is to make things clearer to investors.

SEBI has approved another proposal regarding the division of the Total Expense Ratio (TER) that aims to improve transparency in mutual funds. According to this, Statutory costs such as Securities Transaction Tax (STT), Stamp Duty, and GST would be disclosed separately from TER, enabling investors to understand all costs associated with investments in mutual funds.

Additionally, the Board approved a proposal for the simplification of the summary of the offer document that will allow investors to make informed decisions. In addition, SEBI approved a proposal to allow debt issuing companies to offer incentives to certain categories of investors in public offerings.

In other significant decisions, a framework was approved to increase the threshold for identifying high-value debt listed entities (HVDLEs) from ₹1,000 crore to ₹5,000 crore to reduce the compliance burden on companies with large debt.

This was the fourth board meeting chaired by SEBI chief Tuhin Kanta Pandey. The board also reviewed the recommendations of a high-level panel on issues related to conflict of interest and asset disclosures of senior officials.