SEBI

SEBI-Circular for electronic book mechanism for issuance of debt securities on private placement basis

SEBI-Circular for electronic book mechanism for issuance of debt securities on private placement basis

1. SEBI Board in its meeting held on January 11, 2016, approved the concept of providing for a electronic book mechanism for issuance of debt securities on private placement basis.

2. Hon’ble Finance Minister in the Budget speech of 2016-17 has announced that

“For developing an enabling eco system for the private placement market in corporate bonds, an electronic auction platform will be introduced by SEBI for primary debt offer”

3.    To give effect to Budget announcement and the proposal as approved by the SEBI Board, a circular has been issued, whereby a framework has been provided for private placement of debt securities through electronic book mechanism. Salient features of the framework are as under:

a. electronic book mechanism shall be provided by recognized stock exchange(s) only after obtaining prior approval from SEBI

b. electronic book mechanism would be mandatory for all private placements of debt securities in primary market with an issue size of Rs.500 crores and above, inclusive of green shoe option, if any

c. electronic book mechanism will be optional for the issues below Rs.500 crore, however the issuer shall disclose the coupon, yield, amount raised, number of investors and category of investors to the Electronic Book Provider and/ or to the information repository for corporate debt market, in the format as specified by the Board

d. all investors including institutional investors, HNI’s, arrangers etc. are allowed to bid through this platform (arrangers includes Merchant Bankers, RBI registered Primary Dealers or any other registered intermediaries as notified by SEBI from time to time)

4. The platform will help in streamlining the procedures for issuance of debt securities on private placement basis, enhance transparency, improve price discovery and will help in improving liquidity in secondary market.

5. The provisions of the : circular shall come in effect from July 01, 2016

Mumbai
April 21, 2016

CIRCULAR

 

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