The Indian capital market regulator’ board has approved an amendment to the Sebi (Listing Obligations and Disclosure requirements) Regulations, 2015, requiring listed entities having outstanding listed non-convertible debt securities (NCDs) to list their subsequent issuances of NCDs at the stock exchanges; effective from January 1, 2024.
The amendment to the 2015 provisions aimed at facilitating transparency in price discovery of non-convertible debt securities, better disclosures to investors and the market, and avoiding ISIN level confusion and possible mis-selling of unlisted bonds, the Securities and Exchange Board of India (Sebi) said in a statement.
Sebi clarified that Capital Gains Tax debt securities issued under section 54 EC of the Income Tax Act, 1961; those NCDs where parties have agreed to hold the securities till maturity and accordingly shall be unencumbered; and NCDs issued pursuant to an order of any Court or Tribunal or regulatory requirement as stipulated by a financial sector regulator namely, SEBI, RBI, IRDA, PFRDA or IBBI.
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The market regulator said Capital Gains Tax debt securities issued under section 54 EC of the Income Tax Act, 1961; those NCDs to hold debt securities till maturity and NCD issued pursuant to an order of any Court or Tribunal or regulatory requirement as stipulated by a financial sector regulator namely, SEBI, RBI, IRDA, PFRDA or IBBI are exempted from the applicability of the aforesaid requirements.
“If an entity with listed debt securities has outstanding unlisted NCDs as on December 31, 2023, the entity will have the option to list them, but it would not be mandatory to do so,” the Sebi release read.
The market regulator further said its board has also approved the proposal for enabling delisting of listed debt securities subject to certain requirements including approval from all holders of debt securities, suitable disclosures to the stock exchanges, etc.
“Unlike equity, wherein approval by a threshold majority is sufficient for approval of delisting, approval of 100 percent of the debt security holders is mandated for delisting of debt securities. This is because, unlike equity which is a perpetual instrument, listed debt securities have a finite term to maturity,” the Sebi said.
“Unlike equity, wherein approval by a threshold majority is sufficient for approval of delisting, approval of 100% of the debt security holders is mandated for delisting of debt securities.”
Entities having privately placed, listed debt securities wherein the number of debt security holders is less than 200, shall be eligible to delist their debt securities under this framework as well.
The Indian market regulator’s board also approved the proposal for reducing the time period for listing of shares in a public Issue from the existing six days to three days, from the date of issue closure (T Day). The revised timeline of T+3 days will be made applicable in two phases. The new listing timeframe will be voluntary for all public issues opening on or after September 01, 2023 and mandatory for the ones on or after December 01, 2023, according to the capitals markets regulator.
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Updated: 29 Jun 2023, 09:16 PM IST