SEBI vide circular SEBI/IMD/DOF-1/BOND/Cir-1/2010 dated January 07, 2010 has amended the simplified listing agreement for debt securities. SEBI has stated that regulated financial sector entities need not maintain 100% asset cover (sufficient to discharge the principal amount at all times for the debt securities) in case of unsecured debt instruments issued by them. It should be noted that these unsecured debt instruments should be eligible for meeting the capital requirements of the financial sector entities (as specified by their respective regulators).
SEBI had in May, 2009 issued the simplified listing agreement for debt securities as a part of its efforts to rationalize the disclosure norms for listing of debt issuances. Later, it was amended in November, 2009.
A copy of the circular is available here.
Showing posts with label Listing Agreement. Show all posts
Showing posts with label Listing Agreement. Show all posts
Thursday, January 7, 2010
Thursday, November 26, 2009
SEBI amends listing agreement for debt securities
SEBI vide circular SEBI/IMD/DOF-1/BOND/Cir-5/2009 dated November 26, 2009 has amended the debt listing agreement for debt securities. Earlier in May, 2009 SEBI had issued a simplified listing agreement for debt securities (covered in this blog here). The major changes brought out by this circular (in the debt listing agreement) are as follows.
100% asset cover to be maintained for all issued debt securities
As per the amended listing agreement the issuer should maintain 100% asset cover sufficient to discharge the principal amount at all times for the debt securities issued. Earlier, only companies issuing secured debt securities were under an obligation to maintain 100% security cover as prescribed by SEBI. Now the issuer will have to maintain the prescribed asset cover at all times, even if the issued security is an unsecured debt security.
Submission of certificate on maintenance of security
SEBI has also mandated issuers to submit half yearly certificates regarding maintenance of 100% asset cover, and the time limit of submission in respect of the last half year has been aligned with the option provided for submission of annual audited results at a later date.
Statement on deviations in use of issue proceeds
A new clause has been introduced in the listing agreement whereby issuers should furnish a statement of deviations in use of issue proceeds, if any, to the stock exchange on a half yearly basis. This should also be published in the newspapers simultaneously with the half-yearly financial results. This requirement is adopted from the equity listing agreement prescribed by the SEBI. Under the equity listing agreement the issuer has to furnish this information to the stock exchange on a quarterly basis.
Deposit of 1% of issue proceeds with exchange
Another clause has been introduced which requires issuer to deposit an amount with the Exchange calculated at 1% of the amount of debt securities offered for subscription to the public, as a condition precedent for issuance of debt securities. This requirement is also adopted from the equity listing agreement prescribed by the SEBI.
A copy of the circular is available here.
100% asset cover to be maintained for all issued debt securities
As per the amended listing agreement the issuer should maintain 100% asset cover sufficient to discharge the principal amount at all times for the debt securities issued. Earlier, only companies issuing secured debt securities were under an obligation to maintain 100% security cover as prescribed by SEBI. Now the issuer will have to maintain the prescribed asset cover at all times, even if the issued security is an unsecured debt security.
Submission of certificate on maintenance of security
SEBI has also mandated issuers to submit half yearly certificates regarding maintenance of 100% asset cover, and the time limit of submission in respect of the last half year has been aligned with the option provided for submission of annual audited results at a later date.
Statement on deviations in use of issue proceeds
A new clause has been introduced in the listing agreement whereby issuers should furnish a statement of deviations in use of issue proceeds, if any, to the stock exchange on a half yearly basis. This should also be published in the newspapers simultaneously with the half-yearly financial results. This requirement is adopted from the equity listing agreement prescribed by the SEBI. Under the equity listing agreement the issuer has to furnish this information to the stock exchange on a quarterly basis.
Deposit of 1% of issue proceeds with exchange
Another clause has been introduced which requires issuer to deposit an amount with the Exchange calculated at 1% of the amount of debt securities offered for subscription to the public, as a condition precedent for issuance of debt securities. This requirement is also adopted from the equity listing agreement prescribed by the SEBI.
A copy of the circular is available here.
Tuesday, July 21, 2009
SEBI amends listing agreement – Listing companies prohibited from issuing shares with superior rights
SEBI vide its Circular SEBI/CFD/DIL/LA/2/2009/21/7 dated July 21, 2009 has amended the Equity Listing Agreement to prohibit listed companies from issuing shares with superior rights as to voting or dividend vis-à-vis the rights on equity shares that are already listed. This amendment gives effect to an important decision taken by the SEBI Board on June 18, 2009. A new clause 28A has been inserted in the equity listing agreement to this effect.
A copy of the Circular is available here.
A copy of the Circular is available here.
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