The Hindu Business Line : SEBI draft norms for listing of debt papers

IN a bid to bring more transparency in listing of corporate debt, the Securities and Exchange Board of India (SEBI) has issued a draft agreement on a separate listing pact, including for privately placed instruments, similar to those applicable for listing of equity shares.

These disclosures are based on provisions of the Companies Act. This agreement would be applicable to listing of all debt securities, irrespective of mode of issuance — public issue or private placement, SEBI said. .

All corporates planning to list their corporate debt paper on stock exchanges would have to adhere to all the clearing and settlement processes prescribed by the exchanges, it said.

On issue of book closure and interest payment, SEBI said the companies should inform exchanges at least 15 days in advance about the book closures and redemption of instruments.

The issuers are barred from charging any fees exceeding those agreed with the stock exchange for transactions relating to the debt securities. They should also provide information on top 50 investors of the specific instrument, it added.

The debt issuing entities would have to communicate about major changes in the nature of business, including plans for technical tie-up, financial and marketing agreements, it said.

Corporates would also have to inform about steps taken by it to restore normalcy in times of crisis to enable security holders and the public to appraise the position and avoid a false market in its securities.

The companies should also promptly inform about the impact on the pricing of products and services due to changes in the regulatory framework.

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