SEBI

Platform for Security & Covenant Monitoring using Distributed Ledger Technology – SEBI

Platform for Security & Covenant Monitoring using Distributed Ledger Technology – SEBI

SEBI announces platform for Security and Covenant Monitoring using Distributed Ledger Technology hosted by Depositories shall be developed.

SEBI has outlined the process of independent ‘due diligence’ by debenture trustee(s) on assets of an Issuer company for the purpose of creation of security and ‘periodical monitoring’ of security created and enhanced disclosures on the website by debenture trustee(s) on continuous basis.

SEBI, on the recommendations of the working group, has announced that a platform for ‘Security and Covenant Monitoring System’ (‘system’) hosted by Depositories shall be developed.

The system shall be used for recording and monitoring of the security created and monitoring of covenants of non-convertible securities. The system shall inter alia capture the process of creation of security(viz. due diligence, charge creation etc.), continuous monitoring of covenants by Debenture Trustees (as applicable), credit rating of the non-convertible securities by the Credit Rating Agencies (CRAs) etc.

Depositories shall create, host, maintain and disseminate the system for security and covenant monitoring using distributed ledger technology.

The said system, shall enable various stakeholders to record information for security creation, asset cover and covenants, periodical monitoring of security cover, asset cover and covenants , interest and redemption payment (part and full) of non-convertible securities and credit Rating information.

Accordingly, the SEBI has also prescribed the role and responsibilities of various stakeholders in the said system.

Download SEBI Circular SEBI/HO/MIRSD/MIRSD_CRADT/CIR/P/2021/618 Click Here >>

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