SEC seeks comment on proposed changes to IPO information disclosure rules

Corporate January 23, 2018 18:42

By The Nation

The Securities and Exchange Commission (SEC) is seeking public comments on proposed amendments to the rules governing disclosure of initial public offering (IPO) information.

Under the new rules, the issuer would disclose such information in a video format to better respond to investors’ changing behaviour and to ensure that investors have the information necessary for making informed investment decisions. 

According to the proposed amendments, an IPO issuer would prepare and disclose the necessary information in the visual and audio formats to better respond to investors’ growing habit of accessing news and information from the Internet, and the inconvenience of a thorough reading of lengthy registration statements and prospectuses. 

The proposal is not expected to add much compliance cost because in practice issuers tend to disclose information to the investing public via VDO and Power Point presentations at IPO roadshows, the SEC said on Tuesday. 

In any case, such visual and audio presentation must contain at least material information. 

For example, the shareholding structure of any group of investors and major shareholders, business operation, fund-raising objective, and risk factors. 

This is to ensure that investors would receive material and necessary information before making investment decisions, the SEC explained. 

In addition, to streamline the disclosure requirements before the effective date of the registration statement, the SEC is proposing to repeal the regulation prescribing submission of the advertising copy or a media sample to be used in the advertisement for the SEC’s consideration before the launch of the advertisement. 

Instead, issuers would be required to supervise and ensure that their advertisement contained complete, correct and not misleading information. 

The consultation paper is available on the SEC website at…/upload/phs1516588607hearing_01_2.

Stakeholders and interested parties are welcome to submit comments through the website, or by facsimile at (02) 263 6550 or e-mail: 

The public hearing ends on February 21.