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In just three months, commercial papers (CPs) worth more than ₹3.5 lakh crore have been listed on the BSE. The listing of commercial papers was allowed by SEBI in October when the regulator issued the framework.
CPs are unsecured promissory notes by the companies, which pay interest. These instruments are governed by RBI and have to follow listing and disclosure criteria set by SEBI.
Till date 104 Issuers have done 1,053 issuances of CPs have successfully listed CPs of ₹3,63,157 crore worth of instruments on its platforms, the BSE said. More than 14 issuers made an application to list CPs at BSE for total issue size of ₹46,885 crore. Post process, the effective date of listing for the same at BSE is March 5, 2020.
In FY 2019-20 its debt platforms enabled corporate India to list debt instruments worth ₹5,48,664 crore ($ 74.97 billion) as on (March 4, 2020), BSE said. Of this, BSE has successfully raised ₹3,10,377 crore ($ 42.41 billion) with market share of around 59 per cent via BSE BOND platform as on March 4, 2020. BSE’s debt platform was launched in July 2016 and garnered fund raising of ₹10,16,859 crore ($ 139.95billion) since inception, the exchange said.
According to law firm Khaitan and Co, CPs require continuous disclosure. Manisha Shroff, Khaitan and Co commented that although regulated by RBI, once listed, the issuers of listed CPs are required to comply with the provisions of SEBI (Listing Obligations and Disclosure Requirements), 2015 (SEBI LODR) and make ongoing disclosures during the tenure of the CP, including inter alia, the following disclosures.
Issuers of listed specified securities, that are required to comply with the provisions of Chapter IV of SEBI LODR and also have outstanding listed CPs, are required to prepare and submit financial results in terms of Regulation 33 of SEBI LODR and additional line items as required under Regulation 52(4) of SEBI LODR.
Issuers of listed non-convertible debentures/redeemable preference shares, that are required to comply with provisions of Chapter V of SEBI LODR and also have outstanding listed CPs or who only have outstanding listed CPs shall prepare and submit financial results in terms of Regulation 52 of SEBI LODR.
A certificate from the CEO/CFO of the issuer is required to be submitted to the stock exchange(s) on quarterly basis certifying the end use of the CP proceeds and adherence to other listing conditions.
Issuers of listed CPs are also required to disclosure material information/events to the stock exchanges (within 24 hours) such as inter alia, expected default / delay in its payment obligations for debt instruments, any revision in the credit rating.
NBFCs and HFCs issuers of listed CPs are required to submit their latest ALM statements to the stock exchanges as and when they are disclosed to their respective regulators.
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