The Securities and Exchange Board of India (SEBI) on April 11, 2022 has issued the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2022 to further amend the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021. This has come into force on April 11, 2022.
The following has been stated namely: -
• In Regulation 23 which specify “Obligations of the Issue” sub-regulation (5) has been amended namely: -
“The issuer shall ensure that the secured debt securities are secured by hundred percent security cover or higher security cover as per the terms of the offer document and/or Debenture Trust Deed, sufficient to discharge the principal amount and the interest thereon at all times for the issued debt securities”
• In Regulation 38 which specify “Other Obligations of the Lead Manager” sub-regulation (2) has been substituted namely: -
“The lead manager shall ensure that the secured debt securities are secured by hundred percent security cover or higher security cover as per the terms of the offer document and/or Debenture Trust Deed, sufficient to discharge the principal amount and the interest thereon at all times for the issued debt securities.”
• Regulation 40 which specify “Due Diligence by Debenture trustee” has been substituted namely: -
“Due Diligence by Debenture trustee - The debenture trustee shall, at the time of filing the draft offer document with the stock exchange(s) and prior to opening of the public issue of debt securities, furnish to the Board and stock exchange(s), a due diligence certificate”
• In Regulation 48 which specify “Creation of security” sub-regulation (2) has been substituted namely: -
“The charge created in respect of secured debt securities shall be disclosed in the offer document and the Debenture Trust Deed along with an undertaking that the assets on which the charge or security has been created to meet the hundred percent security cover or higher security cover is free from any encumbrances and in case the assets are encumbered, the permissions or consent to create any further charge on the assets have been obtained from the existing creditors to whom the assets are charged, prior to creation of the charge”
[Notification No. SEBI/LAD-NRO/GN/2022/77]
