TMI BlogSecondary Market for Corporate Debt Securities - ClarificationsX X X X Extracts X X X X X X X X Extracts X X X X ..... ting and trading of privately placed debt securities. 2. The said circular was issued by SEBI after a consultative paper on the subject was placed on the web site of SEBI for public comments. Subsequent to the issuance of the circular, market participants have made representations and suggestions and sought clarifications on the various provisions of the circular from SEBI. A series of meetings were also held with them. Meanwhile, SEBI has vide press release dated November 25, 2003 granted a transition period up to March 31, 2004 to those issuer companies who had issued privately placed debt securities but did not list those securities prior to September 30, 2003 (the date of the circular) to enable them to comply with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. Prospective and existing issues a) The SEBI circular is applicable to all debt securities that have been and would be issued on a private placement basis on or after the date of the circular, i.e., September 30, 2003. b) The circular would also apply to those issuer companies whose outstanding debt securities were issued prior to September 30, 2003. However, such issuer companies are required to comply with the provisions of the circular before March 31, 2004 for which transition time was provided vide press release dated November 25, 2003. c) If, however, the issuer companies do not comply with the aforesaid conditions for listing of such securities before March 31, 2004, then such securities would remain unlisted and, would, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w by a practicing Chartered Accountant. e) It is also being clarified that the provisions other than Chapter VI of SEBI (DIP) Guidelines, 2000 will not be applicable for privately placed debt securities. 4.3 Association of SEBI registered intermediaries, including merchant bankers a) The appointment of intermediaries (other than debenture trustee) for private placement of debt securities is not mandatory. b) Since engaging the services of an intermediary (other than debenture trustee) is not mandatory, the appointment of such an intermediary would be left to the discretion of the issuer company, as it deems fit. c) There is no prohibition on SEBI registered intermediaries to be associated with the privately placed unlisted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) However, if an investor is allotted securities of ₹ 1 lakh or less, such securities may be issued in physical form at the option of the investor. It shall be disclosed by the issuer companies that such investors would not be able to trade in such securities through the stock exchange mechanism. 4.10 Trading of securities on the stock exchanges a) The trading in the privately placed debt securities would be permitted in standard denomination of ₹ 10 lakhs in the anonymous, order driven system of the stock exchanges in a separate trading segment. The marketable lot would be ₹ 10 lakhs. b) All class of investors would be permitted to trade subject to the said standard denomination/marketable lot. c) The trade ..... X X X X Extracts X X X X X X X X Extracts X X X X
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