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Norms for primary issuance of debt securities simplified by SEBI
Oct 31, 2013

In a bid to develop bond market of India, Securities and Exchange Board of India (SEBI) has notified Regulations for Issue and Listing of Debt Securities to provide for simplified regulatory framework for issuance and listing of non-convertible debt securities (excluding bonds issued by Governments) issued by any company, public sector undertaking or statutory corporations. The Regulations will not apply to issue and listing of, securitized debt instruments and security receipts for which separate regulatory regime is in place. 

As per the new measures implemented by Sebi, cash flows emanating from the debt securities would have to be disclosed in the prospectus or the disclosure document by way of an illustration.

The Regulations enable electronic disclosures. The draft offer document needs to be filed with the designated stock exchange through a SEBI registered merchant banker who shall be responsible for due diligence exercise in the issue process and the draft offer document shall be placed on the websites of the stock exchanges for a period of seven working days inviting comments. The documents shall be downloadable in PDF or HTML formats. The requirements for advertisements have also been simplified. 

While listing of securities issued to the public is mandatory, the issuers may also list their debt securities issued on private placement basis subject to compliance of simplified regulatory requirements as provided in the Regulations. The Regulations provide an enabling framework for listing of debt securities issued on a private placement basis, even in cases where the equity of the issuer is not listed. NBFCs and PFIs are exempted from mandatory listing. However, they may list their privately placed debt securities subject to compliance with the simplified requirements and Listing Agreement. A rationalized listing agreement for debt securities is under preparation.

These measures would be applicable to debt securities issued from December 1, 2013.

 


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