SEBI (Issue and Listing of Debt Securities) (Amendment) Regulations, 2017 amends provisions relating to consolidation and re-issuance of debt securities, etc.

SEBI (Issue and Listing of Debt Securities) (Amendment) Regulations, 2017 amends provisions relating to consolidation and re-issuance of debt securities, etc.

July 18, 2017 Corporate 0

The Securities and Exchange Board of India (“SEBI”) has recently notified the Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2017 (“Amendment Regulations”) to amend the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (“Principal Regulations”).

The Amendment Regulations are effective 13th June, 2017.

Key Highlights of the Amendment Regulation:

Principal RegulationsAmendment RegulationsImplications
Regulation 20A

Consolidation and re-issuance

 

An issuer may carry out consolidation and re-issuance of its debt securities, subject to the fulfilment of the following conditions:

 

  1. there is such an enabling provision in its articles under which it has been incorporated;
Regulation 20A

Consolidation and re-issuance

 

An issuer may carry out consolidation and re-issuance of its debt securities, in the manner as may be specified by the Board from time to time subject to the fulfilment of the following conditions:

 

  1. the articles of association of the issuer shall not have any provision, whether express or   implied, contrary to such    consolidation and re-issuance
The Amendment Regulations has amended the conditions to be fulfilled for carrying out consolidation and re-issuance of debt securities.

 

Therefore, for consolidation and re-issuance of debt securities, the issuer must ensure that articles of association of the issuer company does not contain any express/implied provisions contrary to such consolidation and re-issuance.

 

Prior to this, under Principal Regulations, an issuer could carry out consolidation and re-issuance of its debt securities subject to the condition that there is an enabling provision in the articles of the company under which it has been incorporated.

 

 

Did not existInsertion of new Provision:

 

Regulation 20B

 

Any issuer issuing debt securities on private placement basis, shall comply with  the  conditions    relating  to  the  issue  of  International  Securities Identification Number, as may be specified by the Board from time to time

The Amendment Regulations has inserted a new provision Regulation 20B relating to of International Securities Identification Number (“ISIN”).

 

As per the new provision any issuer who is issuing debt securities on private placement basis has to adhere to the conditions    relating to the issue of International Securities Identification Number, as may be specified by the Board from time to time.

 

[Note: The latest circular issued by the SEBI in regard to ISIN number that can be allocated to the issuers of debt securities on private placement basis was on 30th June, 2017.]

 

Previously, the law was silent on this aspect.

Source: Securities and Exchange Board of India

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