With an aim to protect the interest of investors, capital markets regulator Securities and Exchange Board of India (Sebi) has strengthened the role of debenture trustees, asking them to independently evaluate and monitor the asset cover.
The decision comes as several defaults were seen in the debt markets. To give this effect, Sebi has amended debenture trustee norms and Issue and Listing of Debt Securities Regulations, the regulator said in two separate notifications on Thursday. Under the new norms, debenture trustees (DTs) would exercise independent due diligence of the assets on which charge is being created.
Before creating a charge on the security for the debentures, DTs will exercise independent due diligence to ensure that such security is free from any encumbrance or that it has obtained the necessary consent from other charge-holders if the security has an existing charge, Sebi said.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.