1. Representations have been received 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).
2. After detailed consultation with various stakeholders including market participants, investors, Debentures Trustee(s), Stock Exchange(s), Depositories etc., it has been decided to introduce an operational framework for transactions in defaulted debt securities Accordingly, this circular outlines the operational framework for transactions in defaulted debt securities and also prescribes the obligations of Issuers, Debenture Trustee(s), Depositories and Stock Exchange(s) while permitting such transactions.
3. The operational framework has been outlined in Annexure A and the same is also presented in a tabular form along-with timelines in Annexure B, for ease of reference. (Please find the attached)
4. Issuers, Debenture Trustee(s), Stock Exchanges and Depositories are advised to: 4.1. comply with the obligations laid down in this circular including mechanism for inter-depository and exchange coordination, wherever required; 4.2. put in place necessary systems and infrastructure for implementation of this circular and complete the same by June 29, 2020.
5. The provisions shall come into force from July 01, 2020.
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