SEBI TIGHTENS DISCLOSURE NORMS FOR LISTED DEBT SECURITIES
28, May 2019
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Why in News:
- To further safeguard the interest of investors in listed debt securities, the Securities and Exchange Board of India (SEBI) has tightened the disclosure norms for entities that have issued such securities.
- The capital market watchdog made it mandatory for such companies to disclose on their websites the schedule of interest and redemption obligations for the complete financial year.
Within a day of due date
- Further, the status of payments has to be updated within one day of the due date, which effectively means that any default or delay will be disclosed within a day of the due date.
- The enhanced disclosure norms have been issued to “further secure the interests of investors in listed debt securities, enhance transparency and to enable Debenture Trustees (DTs) to perform their duties effectively and promptly.” DTs shall display on their website details of interest/ redemption due to the debenture holders in respect of all issues during a financial year within 5 working days of start of financial year. For privately-placed debt securities, SEBI has made it mandatory for the inclusion of a clause stating that at least 2% per annum interest would be paid over the coupon rate in case of a default in meeting the payment obligations.
- SEBI is the statutory regulator for the securities market in India.
- It was established in 1988 and given statutory powers through the SEBI Act, 1992.
- HQ: Mumbai
- Purpose: Protect the interests of investors in securities, promote the development of securities market and to regulate the securities market.
- SEBI is responsive to needs of three groups, which constitute the market i.e.
- Issuers of securities, Investors and
- Market intermediaries.