Brief Overview:
The Securities and Exchange Board of India (“SEBI”) amends the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (“NCS Regulations”) in line with government’s initiative in green financing, protecting investor interest’s, effective debenture trustee representation, and others.
Technical Details:
The key changes introduced by way of the amendment are:
1) SEBI widens the definition of “green debt securities” to include blue bonds, yellow bonds, transition bonds etc.
2) It specifies that notice of recall or redemption of the security before it’s maturity to be issued by the issuer to eligible debenture holders will now be sent by way of email to the holders whose email addresses are available and by way of physical copy in case no email address is available for such holders.
3) The obligation of the issuer to advertise the notice in relation to recall / redemption of the security prior to its maturity in the newspapers is no longer required.
4) SEBI requires that the provisions relating to the appointment of nominee director as per the stipulated conditions must be set out in the debenture trust deed and accordingly all debenture trust deeds for new issuances of listed debt securities must have these provisions under the debenture trust deed.
For the debt securities already issued and listed, the issuers shall have time till 30th September 2023 to amend their debenture trust deed to provide for norms in relation to the appointment of nominee director and make changes to their charter documents (if required) to provide for powers in relation appointment of nominee director.
5) In case a company has currently defaulted in repayment of principal or payment of interest in relation to its listed debt securities, the issuer shall have to appoint a nominee director within 1 month of this amendment or 1 month of receipt of a notice from the debenture trustee to this effect.
6) With respect to public issue of debt securities and non-convertible redeemable preference shares, SEBI specifies the timelines for the offer period viz. the offer should be open for a minimum of 3 working days and maximum of 10 working days along with certain criteria in relation to the offer period.
7) SEBI stipulates the issuer of listed perpetual debt instrument and perpetual non-cumulative preference shares to pay regulatory fee to the designated stock exchange as specified.
The above changes are introduced by SEBI vide an amendment to the NCS Regulation issued on 2nd February 2023 and are effective immediately.
For further details, please see:
SEBI | NCS Regulations Amendment
For any queries / clarifications, please feel free to ping us and we will be happy to chat:
Ms. Apurva Kanvinde(apurva.kanvinde@jclex.com)
Mr. Smit Parekh (smit.parekh@jclex.com)
