Regulations
Market men question SEBI’s new IPO application format
The latest move by stock markets regulator SEBI to introduce an abridged prospectus with a new IPO application form does not solve either the purpose of transparency or the retail investor interest as it raises several questions than simplifying the procedures, say market analysts.
 
The SEBI has issued a notification introducing a ten-page format -- five sheets, printed on both sides -- replacing the 100-page version of the prospectus, to be issued with IPO application forms. The new format will be effective December 1, 2015. 
 
It provides for increasing the font size of the application form, but at the same time abridges the material information that ought to be given to the investor about the company and its business.
 
For instance, as a legal expert says, the all-important risk factors section which normally runs into 35 to 40 pages is supposed to be condensed to 500 words. Even the section on the company’s business is supposed to be not more than 500 words. 
 
Market analyst Arun Kejriwal, director of KRIS research, says “the increase in font size on page One which has to be filled by applicant is welcome because one can read the columns without using a magnifying glass.” 
 
But, he says, the guidelines on inside pages leave much to be desired. For instance, the selection of risk factors becomes subjective. “There is a lot of ambiguity as to which factor is important and which is not. This could result in playing with fire,” he says. 
 
Appreciating SEBI’s consistent efforts to make stricter compliance norms and increase the number of disclosures to the investor community, a top corporate lawyer said the latest move defeats the very purpose for which SEBI has been working. 
 
On the one hand, SEBI has been working on SME listing and norms and fund raising by startups, while on the other it is making regressive moves like the abridged prospectus, he said. 
 
Market experts opine that the retail investor will be unable to take decision on investing in IPOs on the basis of limited information given in the ten-page booklet. This could lead to increased retail apathy to IPOs, they aver. 
 
A close watch of the retail participation in primary markets recently shows that the segment’s participation has been quite discouraging and, as per media reports, SEBI itself has taken a serious view of this. 
 
Retail quotas in two major IPOs recently - InterGlobe Aviation (Indigo) and Coffee Day Enterprises - were not fully subscribed. 
 
“As it is, the retail participation in IPOs is turning out to be very poor. Our apprehension is that the common investor will develop further disinterest as the information available to him readily is very limited to allow him to take a considered decision to put his hard-earned money into IPOs,” said a merchant banker, speaking on condition of anonymity. 
 
Another merchant banker expressed the apprehension that company promoters would print fewer copies of the full-fledged offer document running into hundreds of pages and it will not be accessible to either broking or the investing community at large.
 
“Though we will have the option of tapping the online version of offer document, I seriously doubt how many investors in small centres in particular will be able to access it,” he said. 
 
Data in public domain shows that India has over 350 million Internet users but the personal computer installed base is merely 55-60 million. Out of the total number of PCs installed, 55 percent are used by individual consumers and the remaining 45 percent by businesses and institutions. This poor penetration certainly limits the scope of retail investors tapping the computers for downloading IPO prospectus. 
 
The other major consumer of the Internet data is the large mobile user base -- 65 percent of India’s Internet traffic as of May 2015 was driven by mobile devices.
 
As of February 2015, only 13 percent of subscribers in India were using 3G and 4G networks. Based on Cisco’s 2014 VNI Mobile forecast, India is at the lower-end of global use of data. 
 
A major broking house partner said: “However smart, you cannot use smart phones to download a 500-page offer document and then read it before filling up an IPO application form.” 
 
“At this rate, I wonder how the government will be able to fulfill its budget announcement to help companies reach out to retail investors,” he said.

 

Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

COMMENTS

rahul agrawal.

1 year ago

According to my view SEBI does not want retail investors to participate in IPO'S, that why without collecting any proper data they are in a hurry to implement such system.

Narendra Agre

1 year ago

on the news of Sebi proposes to reduce nos of pages , its really concern, since the news flow available on the company would be very limited. prospectus is already shortage in the market and fail to understand Sebi's reason for same to do.
if someone knows the reason please advise why sebi is doing the same.

Narendra Agre

1 year ago

on the news of Sebi proposes to reduce nos of pages , its really concern, since the news flow available on the company would be very limited. prospectus is already shortage in the market and fail to understand Sebi's reason for same to do.
if someone knows the reason please advise why sebi is doing the same.

KAVIRAJ B PATIL

1 year ago

Every person of average intelligence should read good books on investing and invest in equities directly. Information about companies is easily available on the net including annual reports. Devoting one hour in a week to study equities is a good practice which will help one to invest sensibly. This will help us avoid drowning in paperwork like KYC which is what the SEBI chairman wants us to do. KYC is only KICK YOUR CUSTOMER. Staying away from MFs is the investors weapon against meaningless form filling.

Pravesh P

1 year ago

Current SEBI chairman's tenure is even worse than the previous ones. If the previous one drove distributors away from MF (mutual fund), this one has driven investors away.

Few years back I was investing via MFs only. But thanks to AMFI lobbying and expense ratio rulings, FACTA & KYC compliance, I have moved out of MF and moved to direct equity.

R Balakrishnan

1 year ago

The capital market regulations will always be in favour of the capitalists. The investment bankers, the lawyers and others have a stake in ensuring that the investor does not get timely and relevant information. SEBI can shout all it wants, but is a tool to retain status quo

The Painting That Saved My Family From the Holocaust

A frightened young woman left her apartment in Munich in November 1938 and returned with the visa that saved her family. A team of German journalists launched an improbable search to find the missing artwork and tell its story

 

Seventy-seven years ago this week, my grandmother left her fourth-floor apartment in Munich carrying a painting by Otto Stein, a modestly popular German artist. Earlier that month, the Nazis had launched a nationwide pogrom against Germany's Jewish minority, a rampage in which gangs of men burned stores, schools and synagogues. In the aftermath of what became known as Kristallnacht, the Gestapo rounded up hundreds of Jewish men and sent them to the Dachau concentration camp. Among them was my grandfather, Jakob Engelberg.

 

Paula Engelberg never talked about what happened during her visit to the Swiss consulate. But when she returned home a few hours later, she no longer had the painting. What she had was the most precious of commodities in Nazi Germany of 1938: A valid visa to enter Switzerland.

The consulate issued only 600 such documents that year, up from just 200 the previous year.

 

This particular one secured the release of my grandfather from Dachau after two weeks, allowing my grandparents, father and aunt to escape Germany and ultimately settle in the United States. It made possible the existence of 20 more human beings.

 

I'm one of them.

 

Five years ago, I told this story to Christian Salewski, a German journalist who was working at ProPublica for several months as part of a fellowship. I said I had always wondered what had happened to the painting, not because it was particularly valuable 2014 works by Stein can be found on eBay selling for a few hundred dollars 2014 but because I wanted to know its story.

 

As a journalist, I imagined any number of possible narratives. Perhaps the painting was given to a diplomat who dispensed visas to desperate Jews, a Schindler of the Swiss diplomatic service. Perhaps it had been sold to an art dealer to raise the money for a bribe. Maybe it was simply a gratuity for a service rendered.

 

I had fantasies of finding a house full of paintings in Switzerland, the owners unaware of the lives saved by their existence.

 

I told Christian that we had only one real clue. My family had managed to leave Germany with a second painting by Stein, a portrait of a young woman whose gaze seems to follow you, Mona Lisa-like, across a room. In my father's memory, this painting, which he called "My Mona Lisa," bore a striking resemblance to its missing sister in both style and subject. The remaining painting hung in our family's living room, a testament to our past as refugees.

 

Early this year, Christian and three colleagues decided to launch what they called Kunstjagdt 2014 "art hunt." Their plan was to spend six weeks using social media like WhatsApp and stories on the radio, on television and in newspapers to search for the artistic equivalent of a needle in a very large hay stack.

 

Their reporting unfolded against the backdrop of the exploding refugee crisis in Europe and the Middle East. It was not hard to see parallels.

 

Then, as now, a desperate group of people sought to escape an increasingly terrifying situation. Then, as now, most countries in the world turned their backs. It's sometimes suggested that German Jews of the 1930's were a delusional group, waiting far too long to flee a country in which they had grown too comfortable. The truth as documented by the Art Hunt team is that then, as now, there was hardly anywhere to go.

 

Jakob Engelberg applied to emigrate to the United States in 1934, shortly after Hitler came to power. He waited four years for his number to be called in America's restrictive, Depression-era immigration system. My aunt told me years later that people who applied for U.S. visas just a few weeks later in 1934 died in the Holocaust.

 

My father and his sister recall that Hitler's speeches and the Nazi Party's program persuaded Jakob Engelberg that the Jews of Germany faced an existential threat, one sufficiently dire to persuade him to abandon a comfortable middle-class life as a traveling salesman living in one of Europe's most beautiful cities.

 

The records dug up by the Art Hunt team suggest he was trying to live his life as an ordinary German. According to a Gestapo report Christian found in the Munich archives, Jakob Engelberg "read the rather liberal Frankfurter Zeitung but besides that was quite an apolitical person who didn't show party flagging from his window on national holidays."

 

I never got the chance to ask him precisely what persuaded him to try to leave Germany at such an early date. Jakob Engelberg died from a cerebral hemorrhage in 1942, long before I was born. (The German government would eventually make a small payment in compensation for his death, acknowledging that it was caused, at least in part, by blows to the head he received while at Dachau.)

 

The U.S. visas for Paula Engelberg and the two children, Melly and Edward, arrived in October 1938. Jakob's visa was delayed because of his Polish nationality, a less-desirable category of immigrant under U.S. law for which fewer visas were issued. And so he was imprisoned in the barracks of Dachau on Nov. 10, 1938, a Jew still waiting for his papers to leave the country.

 

These facts were confirmed by records recovered from archives in Germany and Switzerland by Christian and his Art Hunt colleagues: Fredy Gareis, Marcus Pfeil and Carolyn Braun.

 

The search for the painting proved much more difficult. The team identified the man who stamped the precious visa: Wolfgang Gribi, a Swiss diplomat whose wife lived to be over 100. Unfortunately, she died two years ago.

 

They tracked down an expert on the art of Otto Stein who helped them identify 14 possible "suspects" that were similar to my family's Mona Lisa. Most could be eliminated by date or provenance and my father eliminated several more in a Skype conversation (his first, at age 86). Eventually, the team narrowed it down to one particular painting that was bought by a private collector in Munich in 1950 after suffering what was described as "war damage."

 

Christian flew to the United States and showed the painting to my father.

 

Not surprisingly, he could not be certain. It had, after all, been 77 years since he had seen the missing painting. Still, he said it touched him in ways that none of the other possibilities had.

There remained a piece of evidence that seemed to undermine the case for this particular painting. My father's memory of what happened in November, 1938, confirmed on many other key points, was that his mother had rolled up the painting before leaving for the Swiss consulate. Yet the newly discovered painting is on stiff paper that could not have been rolled.

 

As a journalist, of course, I'm familiar with the vagaries of human memory. To be fair, if my father's recollection is accurate, the painting turned up by the Art Hunt cannot be The One. But it is also possible that the traumatic events of those days left my father with a memory that is inaccurate in this one regard. In all likelihood, we will never know.

 

On Friday, my wife and youngest daughter flew with me to Munich to watch the premiere of a movie that tracks the four journalists on the Art Hunt. The story was as much about a new generation of Germans looking unblinkingly at the past as it is about a long-lost piece of art. The movie was shown at the Jewish Museum of Munich as part of an exhibition of both paintings.

In the question-and-answer session that followed the showing, there was a surprise: The Art Hunt team announced that the owner of the Stein painting had decided to give it our family. Although he had bought it long after the war, and the identification is far from confirmed, Christian told me he didn't feel right having it in his collection if there was any possibility it had been traded for a visa.

 

Jakob Engelberg's Swiss visa was dated Nov. 24, 1938 2014 that year's Thanksgiving. He was released from Dachau the next day and was out of Germany by early December. Weeks later, my father, then 10, began his life as a refugee, living with a distant relative in Lakewood, New Jersey. He was enrolled in public school and tried to learn in a language he spoke not at all.

 

As American presidential politics echo with calls for registries of Muslims and governors say they won't accept Syrians whose circumstances are similar to my Dad's, I know what I'm thankful for this Thanksgiving. The two paintings are hanging at the Jewish Museum of Munich, side by side. In a few weeks, they will be returned to my father.

 

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for their newsletter.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

User

COMMENTS

Shirish Sadanand Shanbhag

1 year ago

Too long and complicated story to enjoy it in reading.

Shirish Sadanand Shanbhag

1 year ago

Too long and complicated story to enjoy it in reading.

US FDA to Probe E-Cig Smoking Cessation Claims
Agency's inquiry based on findings of TINA.org investigation
 
The FDA has opened a probe into smoking cessation claims first revealed in a TINA.org investigation of questionable and misleading e-cigarette marketing. 
 
TINA.org’s investigation published in September found that close to one-third of 150 e-cigarette websites reviewed made some kind of smoking cessation claim. These claims were made in a variety of ways, either through testimonials, anecdotes and marketing statements or a combination. The claims were captured in a database published as part of TINA.org’s investigation.
 
The FDA’s action comes after five health advocacy organizations urged the agency to take prompt action based on TINA.org’s findings. In a Nov. 17 letter to the organizations — which includes the American Cancer Society, American Heart Association, American Lung Association, Truth Initiative and the Campaign for Tobacco-Free Kids — the FDA said it has initiated a review of the marketing claims on the websites noted in TINA.org’s database and upon completion “we intend to take regulatory action as appropriate.”
 
 
To date, no e-cigarette product is approved by the FDA for use as a smoking cessation aid. Despite this fact, TINA.org identified 50 sites that were making smoking cessation claims.
 
The health groups in their letter to the FDA urging action said that the evidence uncovered by TINA.org “suggests that violations of federal law on a massive scale are taking place in the marketing of e-cigarettes.”
 
Janet Woodcock, director for the FDA’s Center for Drug Evaluation and Research, responded that the agency shared the group’s concern about the proliferation of claims. Woodcock wrote:
 
The marketing of e-cigarettes for smoking cessation is an issue of great concern to the Agency. Cigarette smoking is estimated to cause more than 480,000 deaths annually, so helping people quit smoking is a top health priority. To maximize their chances of a successful quit attempt, it is important that smokers use a product that has been approved by the FDA as safe and effective for use as a smoking cessation aid.
 
There is evidence that vaping products do not help people quit tobacco cigarettes. A recent study conducted by researchers at the University of California San Diego School of Medicine and published in the American Journal of Public Health found that smokers who used e-cigarettes were 49 percent less likely to decrease cigarette use and 59 percent less likely to quit smoking compared to smokers who never used e-cigarettes.
 
It’s been more than a year since the FDA signaled it was going to regulate the e-cigarette industry but the final rules have not yet been released. In the meantime, many online e-cigarette companies are taking advantage of the regulatory gaps and making a variety of claims including that e-cigarettes are safe, and/or a healthier alternative to traditional cigarettes. TINA.org’s review found that at least 50 percent of the sites reviewed mentioned health benefits, despite the fact that the FDA currently maintains that the risks associated with e-cigarettes have not been fully studied and some key reports have found harmful chemicals and health effects.
 
In addition to the smoking cessation and health claims, TINA.org’s review also found that one-third of sites made the misleading claim that e-cigarette could be smoked anywhere or virtually anywhere and that 44 percent claimed they were cheaper than tobacco cigarettes.
Read more here about TINA.org’s finding. 
 
Courtesy: TruthInAdvertising.org 

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)