Securities Exchange Board of India (SEBI) vide Circular no. SEBI/HO/DDHS/CIR/P/103/2020 dated 23rd June, 2020 has came out with Operational framework for transactions in defaulted debt securities post maturity date/ redemption date under provisions of SEBI (Issue and Listing of Debt Securities) Regulations, 2008.
The Circular was issued to:
- All Issuers who have listed their debt securities
- All Recognized Stock Exchanges
- All Depositories
- All Debenture Trustee(s)
SEBI has received various Representations from market participants and investors to allow transactions in debt securities where redemption amount has not been paid on maturity/redemption date (referred as defaulted debt securities) and has decidedĀ to introduce an operational framework for transactions in defaulted debt securities Accordingly.
Applicability: The provisions of this circular shall come into force from July 01, 2020.
Outline of the operational framework presented in a tabular form along-with timelines:
| Event | Activity to be undertaken | Timeline (Working Days) | By | To | |
| 1. | Execution of Debenture trust deed | Pre-authorization to seek debt redemption payment-related information from issuerās bank | At the time of execution of the deed | Issuer | Debenture Trustee(s) |
| 2. | Any change in bank details of issuer for making debt redemption payment | Information regarding updated bank details | Within 1 working day of event | Issuer | Debenture Trustee(s) |
| 3. | Creation of ISIN / Listing of Debt Securities | Intimation of Redemption date | – | Issuer | Depositories
Stock Exchange(s) |
| 4. |
Redemption/ Maturity date (T day) |
Non acceptance of
trades for reporting/settlement |
T-2 | Stock Exchange | – |
| 5. | Temporary restriction
on transaction in ISIN |
T | Depository | – | |
| 6. | Intimate Status of payment of debt securities | T+1 | Issuer | Stock Exchange(s)
Depositories Debenture Trustee(s) |
|
| 7. | Non receipt of status of payment from Issuer | Independent Assessment of
Payment Status |
T+2 to T+9 | Debenture Trustee(s) | – |
| 8. | Intimate Status of
payment of debt securities |
By T+9 | Stock Exchange(s)
Depositories |
||
| 9. | Receipt of information regarding full
payment |
Obligations as per para 9 of Annexure A | T+3/T+11/
event basis, as applicable |
Depositories
Stock Exchanges |
|
| 10. | Receipt of information regarding non payment | Obligations as per para 4-8 of Annexure A | Depositories
Stock Exchanges |
||
| Continuous assessment of payment | |||||
| 11. | Any development that impacts the status of default of the concerned debt securities (including restructuring of debt securities, IBC proceedings,
its repayment, etc.) |
Intimate updated Status of payment of debt securities | Within 1 working day of event | Issuer or Debenture Trustee(s) | 1. Stock Exchange(s)
2. Depositories |
| 12. | Continuous assessment of Payment | Intimate Status of payment of debt securities | 2nd working day of April every
financial |
Issuer | 1. Stock Exchange(s)
2. Depositories |
| year | 3. Debenture | ||||
| Trustee(s) | |||||
| 13. | Non receipt of
status of payment from Issuer |
Independent
AssessmentĀ of Payment Status |
3rd
working day of April ā 7th working day of April of every financial year |
Debenture Trustee(s) | |
| 14. | Intimate Status of payment of debt
securities |
Within 7 working days of April of
Every financial year |
1. Stock
Exchange(s) 2. Depositories |
||
Disclaimer:
IN NO EVENT THE AUTHOR SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM OR ARISING OUT OF OR IN CONNECTION WITH THE USE OF THIS INFORMATION.
Ā
Ā
