SEBI framed its DIP guidelines in 1992.

Many amendments have been carried out in the

same in line with the market dynamics and requirements. In 2000, SEBI issued "Securities
and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000" which is
compilation of all circulars organized in chapter forms. These guidelines and amendments
thereon are issued by SEBI India under section 11 of the Securities and Exchange Board of
India Act, 1992. SEBI (Disclosure and investor protection) guidelines 2000 are in short called
DIP guidelines. It provides a comprehensive framework for issuances buy the companies.
These guidelines are important as countries with strong investor protection laws have more
stable 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 investor
sentiments, but the latest report by World Economic Forum (WEF) shows that the country has
plunged 35 places to 62nd rank in terms of effective regulation of the stock exchanges. The
country, last year, stood at the 27th spot for effective regulation and supervision of securities
exchanges. South Africa is on the top followed by Finland, Hong Kong, Luxembourg and
Singapore in this category.
But, the case involving the Sahara group and the jailing of its owner is landmark since it show
s that even powerful companies that defraud investors can be brought to book. We have seen
scams, 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 for
these kinds of frauds, but investors are not aware about this. Therefore, the government has
spent Rs 12.75 crore over past three fiscal years on promoting investor awareness and
protection 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 investor
protection activities.
GUIDELINS ON ADVERTISEMENT
Issue advertisement shall be truthful, fair and clear and shall not contain any statement which
is 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 of
necessary explanatory or qualifying statements, which
may 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 that
past 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 of
excessive details which may distract the investor, shall be avoided.

An issue advertisement shall not contain statements which promise or guarantee rapid
increase in profits.
No models, celebrities, fictional characters, landmarks or caricatures or the likes shall be
displayed 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 herring
prospectus 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 already
in 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 the
Board and disclosed in the offer document.
the credit ratings obtained during the three (3) years preceding the public or rights issue of
debt (Convertible Debt Instrument) for any listed security of the issuer company shall be
disclosed 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 its
debentures, unless the company has appointed one or more debenture trustees for such
debentures 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 the
subsequent 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 of
funds during the implementation period of projects.
GUIDELINES ON INITIAL PUBLIC OFFERS THROUGH THE
STOCK EXCHANGE ON-LINE SYSTEM (e-IPO
Company proposing to issue capital to public through the on-line system of the stock
exchange for offer of securities shall comply with the requirements as contained in this
Chapter 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 the
requisite system of on-line offer of securities. The agreement mentioned in the above clause
shall specify inter-alia, the rights, duties, responsibilities and obligation s of the company and
stock exchange (s) inter se. The agreement may also provide for a dispute resolution
mechanism between the company and the stock exchange.
Appointment of Brokers
The stock exchange, shall appoint brokers of the exchange, who are registered with SEBI, for
the purpose of accepting applications and placing orders with the company
Appointment of Registrar to the Issue
The company shall appoint a Registrar to the Issue having electronic connectivity with the
Stock 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 various
intermediaries connected in the issue / system. The names of brokers appointed for the issue
alongwith the names of the other intermediaries, namely, Lead managers to the issue and
Registrars to the Issue shall be disclosed in the prospectus and application form.
MISCELLANEOUS
Directions by the Board
In case of violation of these Guidelines, the Board may in the interest of the securities market
and 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 the
investors 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 deposit
deposited by the issuer company.