Sebi unveils new disclosure framework for issuers of debt securities

Markets regulator Sebi has notified rules for introducing the concept of general information and key information document to avoid multiple filings of documents by issuers of debt securities.

The move will promote ease of doing business for issuers.

A General Information Document (GID) will contain the information and disclosures specified in the common schedule and will be filed with the stock exchanges at the time of the first issuance.

The GID will have a validity period of one year, Sebi said in a notification.

Thereafter, for subsequent private placements of non-convertible securities or commercial papers within the validity period, only a Key Information Document (KID) will be required to be filed with the stock exchanges, containing material changes.

KID includes financial information, if such information provided in the general information document is more than six months old.

To begin with, Sebi said the concept would be made applicable on a 'comply or explain' basis till March 31, 2024, and mandatory thereafter, according to a notification issued on Thursday.

The new rules are aimed at ensuring parity between initial disclosures required to be made in a prospectus for public issuance of debt securities/ non-convertible redeemable preference shares and a placement memorandum for a private placement of non-convertible securities proposed to be listed.

In a bid to ensure parity in disclosures required to be made in a prospectus for public issuance of debt securities or non-convertible redeemable preference shares, Sebi cleared a proposal to introduce a common schedule for disclosures.

To this effect, the Securities and Exchange Board of India (Sebi) has amended NCS (Issue and Listing of Non-Convertible Securities) rules, which have become effective from Thursday.