COMPLIANCE RELAXATIONS UNDER LODR PURSUANT TO CHANGES IN THE DEBT LISTING REGIME IN INDIA – Eshwars
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COMPLIANCE RELAXATIONS UNDER LODR PURSUANT TO CHANGES IN THE DEBT LISTING REGIME IN INDIA

Authored by Aishwarya Lakshmi VM

Pursuant to the decision taken by SEBI in its Board Meeting held on 29th June 2021, SEBI has merged the following Regulations into a single new Regulation –

1. SEBI (Issue and Listing of Debt Securities) Regulations, 2008.

2. SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013.

The new SEBI (Issue and Listing of Non-Convertible Securities) Regulations 2021 (hereinafter “NCS Regulations”) has been introduced with effect from 09th August 2021. Pursuant to the introduction of the NCS Regulations, the provisions of SEBI (LODR) Regulations 2015 has undergone a change and the same was introduced through SEBI (LODR) 4th Amendment Regulations, 2021 dated 13th August 2021.

Disclosures in Financial Results:

As per Regulation 52 of LODR, any entity that has listed debt securities or Non-Convertible Redeemable Preference Shares (NCRPS) was earlier required to disclose certain line items along with the half-yearly/annual financial results. Pursuant to the Amendment, the following details need NOT be disclosed hereafter.

(a) credit rating and change in credit rating (if any);

(b) asset cover available, in case of non-convertible debt securities;

(c) previous due date for the payment of interest/ dividend for non-convertible redeemable preference shares/ repayment of principal of non-convertible preference shares /non-convertible debt securities and whether the same has been paid or not; and,

(d) next due date for the payment of interest/ dividend of non-convertible preference shares /principal along with the amount of interest/ dividend of non-convertible preference shares payable and the redemption amount;

Annual Undertaking on providing documents to Debenture Trustees:

As per Regulation 57(2), earlier the debt-listed entity was required to provide an annual undertaking to the Stock Exchange that it has provided all the requisite documents to the Debenture Trustees as per the Trust Deed and SEBI (ILDS) Regulations, 2008. The same has been done away with pursuant to the Amendment.

Financial Results to Security-holders:

Earlier as per Regulation 58(1)(d), half-yearly communications of Financial Results under Regulation 52(4) and Certificate of taking note of the contents a per Regulation 52(5) were required to be sent to the security-holders. Now, this requirement has been done away with.

Apart from the abovementioned relaxations, Regulations 58 and 61 have also undergone changes to harmonize the usage of the terminologies in consonance with the NCS Regulations.

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