The Hindu Business Line : SEBI prescribes norms to list debt securities

The Securities and Exchange Bureau of India on Monday issued norms for listing debt instruments through modes such as public or rights or private placement basis.

In a circular to stock exchanges, the regulator said listing of all debt securities irrespective of the mode of issuance, that is private placement, public and rights issue, will be done through a separate listing agreement. The debt securities means "debentures" in the agreement and includes debentures as defined in Section 2(12) of the Companies Act, 1956, and any other debt instruments.

However, institutions such as Asian Development Bank and World Bank are excluded from entering into a listing agreement.

The listing agreement has been categorised into three different parts. Under part one, the agreement has to be complied with by all issuers irrespective of mode of issuance, part two only if debentures are issued either through public or rights issue and part three has to be complied with only if the debentures are issued on private placement basis.

In case of issuers whose equity shares are listed and which have already entered into a listing agreement for its equity shares, clauses of the equity listing agreement will have an overriding effect over the debenture listing agreement, the circular said.

Some of the general disclosures to be made by all the issuers of debt security are similar to that applicable to listed equity shares, such as notification of board meetings, book closure for payment of dividend or interest on any security. The companies and institutions will also have to make all the material information to the exchange, which might have an impact on the issued security.

The issuer will have to inform the exchanges at least seven days in advance of the date of the board meeting at which the recommendation or declaration of issue of convertible debentures or of debentures carrying a right to subscribe to equity shares is made. It also has to inform of any information necessary to enable the holders of the listed securities of the issuer to appraise its position and to avoid the establishment of a false market in the listed securities.

Apart from complying with these requirements, companies will have to keep the exchange informed of events such as strikes, lockouts, closure on account of power cuts, etc. both at the time of occurrence of the event and subsequently after the cessation of the event.

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