Sebi eases norms for primary issuance of debt securities

Market regulator Sebi today relaxed the norms for primary issuance of debt securities by companies, in a bid to develop the country's corporate bond market.

As per the new measures implemented by Securities and Exchange Board of India (Sebi), cash flows emanating from the debt securities would have to be disclosed in the prospectus or the disclosure document by way of an illustration.

"It has been pointed out by the market participants that the disclosures can further be improved, if cash flows concerning interest payment and redemption of debt securities are given by way of illustration in the offer document," Sebi said in a circular today.

The regulator has also decided that if the coupon payment date of the debt securities, falls on a Sunday or a holiday the payment would be made on the next working day.

In the case the maturity date of the debt securities, falls on a Sunday or a holiday, the redemption proceeds would be paid on the previous working day, the regulator said.

These measures would be applicable to debt securities issued from December 1, 2013.

Besides, Sebi has allowed frequent debt issuers -- who are in compliance with listing norms -- to disclose unaudited financials with limited review report in the offer document instead of audited results. In such cases, these entities are required to necessary disclosures including risk factors.

Further, Sebi said "the allotment in the public issue of debt securities should be made on the basis of date of upload of each application into the electronic book of the stock exchange".

"However, on the date of over-subscription, the allotments should be made to the applicants on proportionate basis," it added.

These norms would be applicable from November 1, 2013.

Moreover, Sebi has asked the companies which have listed their debt securities to disclose the name of the debenture trustees with contact details in their annual report and on their websites from December 1, "to enable the investors to forward their grievances to the debenture trustees".

The measures by the market regulator have been taken after discussions with issuers and various other market participants.