Amidst the situation arising out of COVID-19 pandemic, capital market regulator SEBI on Thursday extended the implementation date for framework for creation of security for listed debt securities and due diligence that needs to be carried out by debenture trustees to April 1, 2021. The SEBI had come out with the framework in November and it was to become effective from January 1, 2021
However, after taking into consideration the representation received from debenture trustees (DT) and the challenges arising out of the prevailing business and market conditions due to COVID-19 pandemic, the market regulator extended the implementation date of the circular to April 1, 2021.
As per the circular issued in November, among other requirements, the issuer will have to create charge as specified in the offer document in favour of the DT before making the application for listing of debt securities and also execute debenture trust deed (DTD) with the DT.
Stock exchanges had been directed to list debt securities only upon receipt of a due diligence certificate from DT confirming creation of charge and execution of the DTD. The charge created by issuer will be registered with the sub-registrar, registrar of companies, depository, among others, as applicable, within 30 days of creation of such charge.
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