SEBI vide its Circular dated 9th February, 2023 issued a clarification in respect of the compliance by the first time issuers of debt securities under SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 with Regulation 23(6).
This Circular aims to protect investors interest in securities and promote the development and regulate the securities market.
The Regulation 23(6) of the said Act requires the AOA of an issuer that is a company to include provisions with respect to the requirement for the e board of directors to appoint such person nominated by the debenture trustee in terms of clause(e) of sub-regulation(1) of regulation 15 of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993. The regulation also provides a time period up to September 30, 2023 for existing debt listed issuers to amend their AoA.
It states that in the view of the difficulties posed to first time issuers, the Stock Exchanges are advised to take an undertaking from such first-time issuers that they will ensure that their AoA is amended within a period of six months from the date of the listing of the debt securities. This undertaking may be obtained at the time of granting the in-principle approval. The issuer shall, within such time, comply and report compliance to Stock Exchanges, which shall periodically monitor/ remind such issuers on doing the needful.
This Circular is applicable to all the issuers who propose to list Non-Convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities or Commercial Paper; All Recognized Stock Exchanges; All Debenture Trustees registered with SEBI and shall come into force with immediate effect.
About the Author
