Additional Disclosure Requirements Prescribed for Listing of Debt Securities
SEBI vide circular dated May 27, 2019 enhanced the disclosure requirements for listed debt securities, which are required to be made by the Debenture Trustees (“DT”) on its web site, such as:
- Disclose the nature of compensation arrangement with the clients including minimum fee to be charged and factors determining the same;
- ISIN-wise details of interest/redemption(s), paid and due to the debenture holders in respect of all issues made by the Issuer during any financial year within five (5) working days of start of such financial year;
- details for any new issues handled by the Issuer(s) during the financial year within five (5) days of closure of the Issue; and
- status of payment, ISIN-wise for all issuances not later than one (1) day from the due date. In case the Issuer delays any payment, they shall further update the details specifying the date of such payment, with a remark ‘delayed payment’.
Further, the Share Transfer Agent/Issuer are required to furnish the list of debenture holders to the DT (a) at the time of allotment of debentures; and (b) update the same, on or before the seventh working day of each succeeding month thereafter.
In the case of privately placed issues, the following additional covenants shall be included as part of the ‘Issue Details’ in the summary term sheet:
- Default in Payment: In case of any default in payment of interest and/or principal redemption on any due date, the issuer shall be liable to pay additional interest of at least @ two (2)% per annum over the coupon rate to the debenture holders for the period of default.
- Delay in Listing:In case the issuer delays the listing of debt securities beyond twenty (20) days from the deemed date of allotment, the issuer shall pay penal interest of at least @ one (1) % per annum over the coupon rate. Such penal interest shall be calculated from the expiry of thirty (30) days from the deemed date of allotment till the listing of such debt securities.