SEBI vide its Circular dated 8th February, 2023 issued a notification regarding Clarification w.r.t issuance and listing of perpetual debt instruments, perpetual non-cumulative preference shares and similar instruments under Chapter V OF THE SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021.
The following has been stated:
It is clarified that only securities which have characteristics as stated below shall necessarily be required to comply with the provisions for issuance and listing as specified under Chapter V of the NCS Regulations and circulars issued thereunder:
- The issuer is permitted by RBI to issue such instruments,
- The instruments form part of non-equity regulatory capital,
- The instruments are perpetual debt instruments, perpetual non-cumulative preference shares or instruments of similar nature and
- The instruments contain a discretion with the issuer/ RBI for events including but not restricted to all or any of the below events:
- conversion into equity;
- write off of interest/ principal;
- skipping/ delaying payment of interest/principal;
- making an early recall;
- changing any terms of issue of the instrument.
Further, the Stock Exchanges and Depositories are advised to:
- make amendments to the relevant bye-laws, rules and regulations;
- disseminate the provisions of this circular on their website;
- communicate and create awareness amongst stakeholders; and
- monitor the compliance of such issuances.
This Circular is applicable to Issuers who have listed and/ or propose to list Non-convertible Securities; Recognized Stock Exchanges; Registered Depositories; Registered Credit Rating Agencies, Debenture Trustees and Merchant Bankers and shall come into force with immediate effect.
About the Author
