Debt listing norms cleared, disclosure rules eased

It said due diligence, proper disclosures and credit rating, the key elements of corporate debt issuances will be ensured by Sebi mainly through the merchant bankers. “If the equity of a company is listed and such company wishes to issue debt instruments, minimal incremental disclosures are sufficient. If equity of the issuer is not listed and such a company raises debt capital, detailed disclosures are required. Offer to 50 or more persons should require mandatory listing and specific disclosures,” Sebi said.

On listing of debt securities which are not convertible, Sebi said the regulations are principle based and have been made taking into account the market needs, cost of the transactions, competition policy, the professional expertise of credit rating agencies, disclosures and obligations of the parties involved in the transaction.

According to Sebi, the issuer will be a trust and the trustees will require registration from the market regulator. The instrument issued by the issuer to the investor should acknowledge the beneficial interest of such investor in underlying debt or receivables assigned to the issuer. In the case of public issuances, listing will be mandatory. The instruments issued on private placement basis may also be listed subject to the compliance of simplified provisions of the regulations.