SEBI looks to ease regulatory compliance burden with debt securities merger

The Securities and Exchange Board of India (SEBI) has merged its rules for debt securities into a single regulation to ease the regulatory compliance burden on organisations.

According to Regulation Asia, the new operational guidelines will cover non-convertible securities, security receipts, securitised debt instruments, commercial papers and municipal debt securities.

The two regulations that were merged to create the new sole regulation were the Issue and Listing of Debt Securities rules and the Non-Convertible Redeemable Preference Shares rules. The new regulation will be called the Issue and Listing of Non-Convertible Securities regulations.

Under the new regulations, issuers that have existed for less than a three-year period can tap the bond market in specific conditions. These conditions include the issuance of debt securities on a private placement basis, on the electronic book mechanism platform and for subscription-only to qualified institutional buyers.

Furthermore, limitations for the identification of risk factors have been unveiled to assist issuers with their disclosures.

If an issuer wants to roll over the debt securities, SEBI has introduced e-voting to facilitate issuers to more easily pass such resolutions. These roll-overs can be approved by shareholders who hold at least three-fourths of the value of the debt.

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