The Hindu Business Line : Corporate debt listing, issuance, simplified

New framework
Investing rating norm, filing of draft document done away with.
Cos not listed on stock exchanges permitted to list.
NBFCs continue to enjoy exemption from mandatory listing.

Our Bureau

Mumbai, June 19 In order to facilitate the development of a vibrant primary market for corporate bonds in India, the Securities and Exchange Board of India (SEBI) today simplified the regulatory framework for the issuance and listing of non-convertible debt securities.

These guidelines apply to debt instruments issued by any company, public sector undertaking or statutory corporations, but do not apply to bonds issued by governments. The SEBI also issued separate regulations for securitised debt instruments and security receipts.

Securitised instruments

This is the first time that SEBI has notified guidelines for listing and trading of securitised debt instruments. Until now only private placement to Qualified Institutional Buyers was allowed for these instruments.

Under the new guidelines, filing of draft offer documents with SEBI for observations has been done away with, and the emphasis is on due diligence, adequate disclosures and credit rating as the cornerstones of transparency.

The disclosures have to follow Schedule II of the Companies Act. They are instrument-related disclosures, such as, term of the instrument and so on.

Now instruments with any rating grade can be listed.

SEBI has put a time limit of three months. Once the debt instrument is offered through public issue, it has to be secured within three months or else it becomes a deposit.

Companies that are not listed on stock exchanges can list their debt instruments and also offer them for private placement.

While listing securities issued to the public is mandatory, the present regulation does not disturb the exemption provided to NBFCs and Public Finance Institutions from mandatory listing.

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