Enhanced Disclosure for Listed Debt Securities - SEBI/27.05.2019

SEBI has issued a circular vide notification no. SEBI/ HO/ MIRSD/ DOS3/CIR/P/2019/68 dated 27^th May, 2019 on “Enhanced disclosure in case of listed debt securities”.
 

v  Purpose:

To secure the interests of investors/stakeholders in listed debt securities, enhance transparency and to enable Debenture Trustees (DTs) to perform their duties effectively and promptly.

v  Above circular has been addressed to:

·  All Issuers of debt securities

·  All registered Debenture Trustees,

·  All registered RTAs/STAs acting on behalf of listed issuers

·  All recognized Stock Exchange(s)

      

v  following guidelines are being issued by SEBI

1. Disclosure of compensation arrangement with clients by DTs on their websites:

Nature of compensation arrangement with its clients shall be disclosed by Debenture Trustees on their websites including the minimum fee to be charged (in absolute terms or as a percentage of the issue size) and factors determining the same.

2. Calendar of interest/ redemptions, due and paid, to be displayed on the website of DT(s) for the financial year

Following details should be displayed/updated on the website of Debenture Trustees (DTs):

·  ISIN wise details of interest/ redemption due to the debenture holders in respect of all issues during a financial year within 5 working days of start of the financial year

·  Update details for any new issues handled during the financial year within 5 days of closure of the Issue.

·  update the status of payment ISIN-wise against such issuers not later than 1 day from the due date

·  update the calendar specifying the date of delayed payment, with a remark ‘delayed payment’ when payment is made delayed by the issuer.

3. Furnishing of the updated list of debenture holders to the DTs by Issuers/ Registrars to an Issue and Share Transfer Agent (RTA).

RTA / Issuers shall henceforth forward the details of debenture holders to the Debenture Trustees (DT) at the time of allotment and thereafter by the seventh working day of every next month in order to enable DTs to keep their records updated and to communicate effectively with the debenture holders, especially in situations where events of default are triggered.

4. Additional covenants in case of privately placed issues

a) Following covenants shall be included as part of the Issue Details in the summary term sheet, as per the agreement between the issuer and investor:

i) Default in Payment: In case of default in payment of Interest and/or principal redemption on the due dates, additional interest of atleast @ 2% p.a. over the coupon rate shall be payable by the Company for the defaulting period.

ii) Delay in Listing: In case of delay in listing of the debt securities beyond 20 days from the deemed date of allotment, the Company shall pay penal the interest of at least @ 1 % p.a. over the coupon rate from the expiry of 30 days from the deemed date of allotment till the listing of such debt securities to the investor.

Note :

It is clarified that amendments may be made, to incorporate the aforesaid additional covenants in the summary term sheet issued and/or agreement executed on or after May 7, 2019.

Source: https://www.bseindia.com/downloads/whtsnew/file/CIR-14.pdf