Business Daily from THE HINDU group of publications
Friday, Jan 04, 2008
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Friday, Jan 04, 2008 ePaper | Mobile/PDA Version |
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Markets
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Regulatory Bodies & Rulings Corporate - Corporate Bonds Web Extras - Private Placement Our Bureau Mumbai, Jan. 3 SEBI has proposed fast tracking of debt issuance for listed companies as well as mandatory listing of private placement of debt, in its new draft regulations for simplifying the primary issuance process for corporate bonds. The objective is to create a more vibrant, dynamic and transparent corporate debt market in the country, said SEBI. This requirement is the key to raising resources required for meeting the infrastructure development requirements of the country, it said. Since a large amount of company related information is already in the public domain the case of listed companies, minimal incremental disclosures are sufficient for issue of debt instruments, said SEBI. This is regardless of whether the debt is by way of a public offering or private placement. For an unlisted company, detailed (though less detailed than for equity securities) disclosures are required. Public issuers of debt securities will continue to file draft offer documents through a SEBI registered merchant banker who will exercise the due diligence process for the issue. These draft documents will be put up on the SEBI and stock exchange Web sites for a period of seven days; due diligence, disclosures and credit rating — key elements of corporate debt issuances — will be ensured by SEBI mainly through certifications issued by the merchant bankers. Current listing agreements will be bifurcated into a more detailed one and a simplified one depending on whether the issuers are already listed or not, said SEBI. Currently, public financial institutions and non banking financial institutions are exempted from the limit of 49 offerees in their private placements which can be made to 50 or more persons without substantial disclosures. In order to develop the corporate debt market it is envisaged that issuances to 50 or more persons shall require mandatory listing and specific disclosures. SEBI has also proposed an enabling mechanism for e-issuance of debt securities to the public, the details of which are being worked out and will be notified later. The proposed regulations will impose a lower regulatory burden on issuing companies without compromising on the rights of investors, said SEBI. More Stories on : Regulatory Bodies & Rulings | Corporate Bonds | Private Placement
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