As
per the recently issued SEBI circular, privately
placed corporate bond issuers will now have to make
disclosures similar to public issues, appoint a
debenture trustee and follow a separate listing
agreement that will be introduced. In the case of
unlisted placements, SEBI-regulated entities subscribing
to such papers will have to furnish the investment
details to SEBI. The issuer however, will not have
to take prior approval of SEBI. Instead, it could
make the disclosures on the website of stock exchange
where the security would be listed. Besides, all
securities will have to be in the dematerialised
form. |
Our Say |
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| The
large investors in this segment are
banks, bond houses and mutual funds.
The move could be a setback to the market
where millions of negotiated deals between
corporates, banks, institutions and
primary dealers have remained out of
the public domain. The new norms could
increase the time taken to complete
a bond issue, which could currently
be done even in a day. The move assumes
significance given the growing importance
of the debt market. The reported volumes
in the debt market on several days this
year has been more than the combined
equity trades on BSE and NSE.
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Significantly,
SEBI has further said that all listed companies
coming with a bond issue will have to compulsorily
list it, thereby precluding unlisted private placements
by listed companies. In addition, SEBI is expected
to come out with separate listing agreements for
debt securities, which exchanges will have to follow.
Now all such issuances must have a debenture redemption
trustee and a reserve that may be governed by SEBI’s
debenture trust rule. |
