SEBI Streamlines Process of Public Issue of Debt Securities, Non-convertible Redeemable Preference Shares and Securitized Debt Instruments

On August 16, 2018, SEBI issued a circular to make the existing process of the issuance of debt securities, non-convertible redeemable preference shares (‘NCRPS’) and securitised debt instruments (‘SDI’) easier, simpler and cost effective for both issuers and investors under the SEBI (Issue and Listing of Debt Securities) Regulations, 2008, SEBI (Issue and Listing of Debt Securities by Municipalities) Regulations, 2015, SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 and SEBI (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008. The circular has sought to reduce the time taken for listing after the closure of the issue to six working days (instead of the earlier requirement of twelve working days). Some of the other key features of the circular are:

i.  Submission of application form: For subscription to a public issue, all investors have to use an application supported by blocked amount facility for making payment, and submit a completed bid-cum-application form to Self-Certified Syndicate Banks (‘SCSBs’) (with whom the bank account to be blocked is maintained) or certain specified intermediaries.

ii.  Role of SCSBs and intermediaries: The circular provides for the process of acknowledgement of applications by investors, uploading details in the electronic bidding system and blocking of funds in specified bank accounts to the extent of application money.

iv.  Role of stock exchanges: Stock exchanges are required to validate electronic bid details with depository’s records for the DP ID, client ID and Permanent Account Number, by the end of each bidding day and notify the inconsistencies to SCSBs or intermediaries concerned, for rectification and re-submission. Stock exchanges are also required to develop systems to facilitate investors to view the status of their applications.

This circular is applicable for all public issues of debt securities, NCRPS and SDI opening on or after October 1, 2018.

Published In:Inter Alia - Quarterly Edition - September 2018 [ English Chinese japanese ]
Date: September 1, 2018