Merchant Banking and Financial Services, III Semester (MBA), UNIT-2
Definition of Establishment of Disclosure and Investor Protection (DIP) guidelines
The SEBI has issued Disclosure and Investor Protection (DIP) guidelines as ground rules relating to new issue procedure/activities. The purposes for which SEBI has framed the DIP guideless are To protect the interest of investors For the orderly growth and development of the securities market. For removing inadequacies and deficiencies in the system. These guidelines are in addition to the company law requirements in relation to issues of capital/securities.
Applicability
These procedures/activities are applicable to all
Public issues and offers for sale by listed/unlisted companies and
Rights issue (i.e., an issue of capital under sec.81 (1) of the
companies act to the existing shareholder through a letter of offer) by listed
companies, except in cases where the aggregate value of securities including
premium is less than ` 50 lakh.
Note
Letter of offer in compliance with the disclosure requirement
specified in these guidelines should be prepared by the issuing company in
respect of rights issue with aggregate value less than ` 50 lakh. The letter of offer should be filed
with the SEBI.
Public issue means an invitation by a company to the public to
subscribe to the securities offered through a prospectus.
