Sebi issues framework for listing of commercial paper

Markets regulator Sebi on Tuesday came out with a framework for listing of commercial papers on stock exchanges in order to broaden investor participation in such securities.

To enable listing of commercial papers (CPs) and to ensure investor protection, Sebi noted that it is important that issuers, who intend to list such securities, make appropriate disclosures at the time of listing and on a continuous basis.

The disclosure framework has been based on the recommendation of the Corporate Bonds and Securitisation Advisory Committee (CoBoSAC), chaired by H R Khan, former deputy governor of the Reserve Bank of India (RBI), Sebi said in a circular.

Under the guidelines, Sebi said an issuer who desires to list its CP needs to send an application for listing along with the specified disclosures to the stock exchanges.

The disclosures pertain to details of the issuers, information related to change in directors as well as auditors in past three financial years, including any change in the current year, details of top-10 holders of equity shares, debt securities and CP of the company, any material information and details of borrowings of the company, as on the latest quarter end.

The issuer will also have to disclose financial results, asset liability management and details of the issue.

Following the approval of the listing application by the concerned exchange, Sebi said these disclosures along with the application need to be made available on the website of the bourse.

After the listing, the issuer will have to make disclosures about financial results and material information during the tenure of the CP to the concerned stock exchange, which in turn need to be disseminated the same on its website.

The regulator has asked stock exchanges to put in place necessary systems and procedures for monitoring of these disclosures and issue a framework for imposition of fine in case of non-compliance or inappropriate disclosures by issuers.