SEBI framed its DIP guidelines in 1992. Many amendments have been carried out in thesame in line with the market dynamics and requirements. In 2000, SEBI issued "Securitiesand Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000" which iscompilation of all circulars organized in chapter forms. These guidelines and amendmentsthereon are issued by SEBI India under section 11 of the Securities and Exchange Board ofIndia Act, 1992. SEBI (Disclosure and investor protection) guidelines 2000 are in short calledDIP guidelines. It provides a comprehensive framework for issuances buy the companies.

These guidelines are important as countries with strong investor protection laws have morestable markets and attract more capital, says John Rogers , president and CEO, CFA Institute.If we talk about India, Indian capital markets may be riding high on positive investorsentiments, but the latest report by World Economic Forum (WEF) shows that the country hasplunged 35 places to 62nd rank in terms of effective regulation of the stock exchanges. Thecountry, last year, stood at the 27th spot for effective regulation and supervision of securitiesexchanges. South Africa is on the top followed by Finland, Hong Kong, Luxembourg andSingapore in this category.

But, the case involving the Sahara group and the jailing of its owner is landmark since it shows that even powerful companies that defraud investors can be brought to book. We have seenscams, Ponzi schemes and cases of unscrupulous entities running away with investors' money.There is a lot of anguish about misplaced trust, loss of precious savings of small investors,and the lack of timely identification and arrest of the fraudsters. There are tough laws forthese kinds of frauds, but investors are not aware about this. Therefore, the government hasspent Rs 12.75 crore over past three fiscal years on promoting investor awareness andprotection activities. While the Ministry of Corporate Affairs had spent Rs 4.98 crore in 2011-12, Rs 4.35 crore and Rs 3.42 crore was incurred in 2010-11 and 2009-10 on investorprotection activities.

GUIDELINS ON ADVERTISEMENT

Issue advertisement shall be truthful, fair and clear and shall not contain any statement whichis untrue or misleading

Issue advertisement shall be considered to be misleading, if it contains -a) Statements made about the performance or activities of the company in the absence ofnecessary explanatory or qualifying statements, whichmay give an exaggerated picture of the performance or activities, than what it really is.b) An inaccurate portrayal of past performance or its portrayal in a manner which implies thatpast gains or income will be repeated in the future.

a) An advertisement shall be set forth in a clear, concise and understandable language.b) Extensive use of technical, legal terminology or complex language and the inclusion ofexcessive details which may distract the investor, shall be avoided.

An issue advertisement shall not contain statements which promise or guarantee rapidincrease in profits.

No models, celebrities, fictional characters, landmarks or caricatures or the likes shall bedisplayed on or form part of the offer documents or issue advertisement.

Issue advertisements shall not appear in the form of crawlers

In case of issue advertisement on television screen:(a) the risk factors shall not be scrolled on the screen; and(b) the advertisement shall advise the viewers to refer to the red herringprospectus or other offer document for details.)No advertisement shall include any issue slogans or brand names for the issue except the

normal commercial name of the company or commercial brand names of its products alreadyin use.No slogans, expletives or non-factual and unsubstantiated titles shall appear in the issue

advertisements or offer documents.If any advertisement carries any financial data, it shall also contain data for the past three

years and shall include particulars relating to sales, gross profit, net profit, share capital,reserves, earnings per share.

GUIDELINS ON ISSUE OF CONVERTIBLE DEBT INSTRUMENTs

Requirement of credit rating

(No company shall make a public issue or rights issue of (Convertible Debt Instrument),unless credit rating is obtained from at least one credit rating agency registered with theBoard and disclosed in the offer document.

the credit ratings obtained during the three (3) years preceding the public or rights issue ofdebt (Convertible Debt Instrument) for any listed security of the issuer company shall bedisclosed in the offer document.

Requirement in respect of Debenture Trustee

No company shall issue a prospectus or a letter of offer to the public for subscription of itsdebentures, unless the company has appointed one or more debenture trustees for suchdebentures in accordance with the provisions of the Companies Act, 1956.

The names of the debenture trustees shall be stated in the Offer Documents and also in all thesubsequent periodical communications sent to the debenture holders

The debenture trustee shall ensure compliance of the following:a) (It shall obtain reports from the lead bank, regarding monitoring progress of the project.)

b) (It shall monitor utilization of funds raised in the debenture issue.)c) Trustees shall obtain a certificate from the company's auditors: respect of utilisation offunds during the implementation period of projects.

GUIDELINES ON INITIAL PUBLIC OFFERS THROUGH THESTOCK EXCHANGE ON-LINE SYSTEM (e-IPO

Company proposing to issue capital to public through the on-line system of the stockexchange for offer of securities shall comply with the requirements as contained in thisChapter in addition to other requirements for public issues as given in these Guidelines,wherever applicable

Agreement with the Stock exchange.The company shall enter into an agreement with the Stock Exchange(s) which have therequisite system of on-line offer of securities. The agreement mentioned in the above clauseshall specify inter-alia, the rights, duties, responsibilities and obligation s of the company andstock exchange (s) inter se. The agreement may also provide for a dispute resolutionmechanism between the company and the stock exchange.

Appointment of BrokersThe stock exchange, shall appoint brokers of the exchange, who are registered with SEBI, forthe purpose of accepting applications and placing orders with the company

Appointment of Registrar to the IssueThe company shall appoint a Registrar to the Issue having electronic connectivity with theStock Exchange/s through which the securities are offered under the system.

The Lead Manger shall be responsible for co-ordination of all the activities amongst variousintermediaries connected in the issue / system. The names of brokers appointed for the issuealongwith the names of the other intermediaries, namely, Lead managers to the issue andRegistrars to the Issue shall be disclosed in the prospectus and application form.

MISCELLANEOUS

Directions by the BoardIn case of violation of these Guidelines, the Board may in the interest of the securities marketand in the interest of the investors may pass the following directions under section 11B:(a) directing the persons concerned to refund any money collected under an issue to theinvestors with or without requisite interest, as the case may be.(b) directing the persons concerned not to access the capital market for a particular period.(c) directing the stock exchange concerned not to list or permit trading in the securities.(d) directing the stock exchange concerned to forfeit the security depositdeposited by the issuer company.

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