Sebi amends listing agreement for debt securities

Market regulator Securties and Exchange Board of India (Sebi) today came up with an amendment in order to simplify the listing agreement for debt securities on the stock exchanges. The amended listing agreement will be applicable with immediate effect.

According to it, the debt security issuers will have to maintain 100 per cent asset cover to discharge the principal amount at all times for the issued debt securities. At the same time, issuers of debt securities now have to provide periodic disclosures to the stock exchanges of the extent and nature of security created and maintained.

In case of submission of certificate on maintenance of security, the amended listing agreement provides for submission of such certificates regarding maintenance of 100 per cent asset cover as against half-yearly certificates on security cover in respect of listed secured debt securities. In addition to banks and NBFCs being exempt from submitting such certificates, issuers of the government guaranteed bonds will also be exempted.

Sebi, in its note today, also said that issuers will be required to furnish a statement of deviations in use of issue proceeds. The same is required to be published with half-yearly financial results, the note added.

In order to ensure that the interest of investors investing in public issues of debt securities is protected, the issuer will have to deposit 1 per cent of the amount of debt securities being offered for subscription to the public.