SEBI Update: Revised format of security cover certificate, monitoring and revision in timelines

SEBI vide Circular dated May 19, 2022, brought revised format of security cover certificate, monitoring, and revision in timelines with regards to SEBI circular dated November 12, 2020, which specifies the format of security cover certificate, periodical disclosures by Debenture Trustee.

Applicability of this Circular: This circular shall be applicable to issuers who have listed and/ or propose to list Non-Convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities, or Commercial Paper; to all Recognized Stock Exchange and Debenture Trustees registered with SEBI

In terms of regulation 54 read with regulation 56(1)(d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, listed entities are required to disclose security cover to Stock Exchange(s) and Debenture Trustee, in the format as prescribed as per Annexure A of SEBI Circular dated November 12, 2020. Based on the recommendation of the Working Group, the security cover format has been revised and the format prescribed as per Annexure A of SEBI Circular dated November 12, 2020 stands rescinded.

The revised format has been prepared to provide a holistic picture of all the borrowings and the status of encumbrance on the assets of the listed entity. The revised format for security cover is enclosed at Annexure I. Further, the obligations of listed entity and Debenture Trustee with respect to preparation and submission of security cover format are given as under. The provisions mentioned in Part A and B with respect to ‘Revised format of the Security Cover’ and ‘Monitoring of Covenants’ are applicable w.e.f October 1st, 2022. Other provisions of this circular shall come into effect with immediate effect

Circular Link: 

https://www.sebi.gov.in/legal/circulars/may-2022/revised-format-of-security-cover-certificate-monitoring-and-revision-in-timelines_59051.html