To further safeguard the interest of investors in listed debt securities, the Securities and Exchange Board of India (SEBI) has tightened the disclosure norms for entities that have issued such securities.
In a circular issued on Monday, the capital market watchdog made it mandatory for such companies to disclose on their websites the schedule of interest and redemption obligations for the complete financial year.
Within a day of due date
Further, the status of payments has to be updated within one day of the due date, which effectively means that any default or delay will be disclosed within a day of the due date.
According to the SEBI, the enhanced disclosure norms have been issued to “further secure the interests of investors in listed debt securities, enhance transparency and to enable Debenture Trustees (DTs) to perform their duties effectively and promptly.”
“DTs shall display on their website... details of interest/ redemption due to the debenture holders in respect of all issues during a financial year within 5 working days of start of financial year,” stated the SEBI circular, while adding that the debenture trustees will also have to update such details for any new issues handled during the financial year within five days of closure of the issue.
“DTs shall also update the status of payment... against such issuers not later than 1 day from the due date. In case the payment is made with a delay by the issuer, DTs shall update the calendar specifying the date of such payment, with a remark ‘delayed payment’,” said the circular.
For privately-placed debt securities, SEBI has made it mandatory for the inclusion of a clause stating that at least 2% per annum interest would be paid over the coupon rate in case of a default in meeting the payment obligations. The additional interest would be payable by the company for the tenure of the defaulting period.
