Key Points
SEBI focuses on transparency in IPO documentation
Regulatory approach prioritizes investor information over price fixing
Non-profit company disclosures under careful evaluation
Comprehensive financial transparency is key regulatory goal
Speaking about SEBI's regulatory approach, she said that the focus is not on determining the "right price" of an IPO but ensuring that investors have access to all necessary data to assess whether the price is appropriate.
"I think the test that all of us put to every IPO document that comes is that if we were the investor and we were reading the document, particularly the section on pricing, is there enough information there which will help us to assess whether this is a good price or a not-so-good price? So that is the test." Buch stated.
She was speaking at the 13th Edition of the AIBI Annual Convention 2024-2025 on Tuesday in Mumbai.
She reiterated that SEBI's role is not to intervene in pricing, a responsibility explicitly removed when the Controller of Capital Issues (CCI) was replaced by SEBI under the Act of Parliament. The Controller of Capital Issues was the market's regulatory authority, and derived power from the Capital Issues (Control) Act, 1947.
Buch also discussed the regulations introduced for non-profit-making companies and their Key Performance Indicator (KPI) disclosures.
She mentioned that two working groups, including one at the industry standards forum, are evaluating these disclosures to strike a balance. The goal, she said, is not to overload or minimize disclosures but to provide adequate information for investors to make decisions confidently.
She emphasized that this philosophy extends beyond IPO pricing. SEBI's observations on IPO documents and post-listing requirements, including resolutions at Annual General Meetings (AGMs) and audit committee approvals, are guided by the principle of transparency.
"Our logic is, are you giving enough information to the audit committee or to the investors for them to make up their mind on whether they should support a resolution or not," Buch explained.
The SEBI chief's remarks highlight the regulator's commitment to fostering a transparent and investor-centric capital market. By focusing on comprehensive disclosures, SEBI aims to empower investors to make informed decisions while maintaining market integrity.
