Listing pact for debt securities soon

The Securities and Exchange Board of India has decided to have two sets of disclosure norms in the listing agreement of debt securities.

The regulations, to be announced shortly, will stipulate minimal incremental disclosure requirements for listed companies. For all others, the disclosures will have to be detailed.

The argument is that listed companies are already complying with the stringent disclosure requirements. If these issuer are making detailed disclosures, they should be only relevant to debt. Even for first-time issuers trying to list debt securities, the disclosures will not be as detailed as an equity listing agreement.

 

Sources familiar with the developments said the differential disclosure norms under the listing agreement for the bond market will not only ease the process, but will also save time and cost for companies.As such, market experts opine that rating is a sufficient discipline.

Supposing a issuer de-lists its equity from the exchange and plans to list its debt, then it will have to automatically comply with more stringent disclosure norms.

Also if a company first enters the debt market to list and eventually lists its equity then it need not repeat the disclosures and also need not enter into separate agreement.

Meanwhile, the capital market regulator has set up an advisory committee named "Corporate Bonds and Securitization Advisory Committee" on developing the market for corporate bonds and securitized debt instruments.

The committee to be chaired by R.H Patil will also have Nimesh Kampani, Rajiv Lall, Ishaat Husain and Nilesh Shah as members.

According to Sebi data, over 1,400 trades worth Rs 4,352 crore took place this month in corporate bonds.