Guidance note for filing intimations w.r.t. Insolvency and Bankruptcy Code (IBC) / Inter-Creditors Agreement (ICA)
| Notice No. | 20220607-10 | Notice Date | 07 Jun 2022 |
| Category | Circulars Listed Companies | Segment | Equity |
| Subject | Guidance note for filing intimations w.r.t. Insolvency and Bankruptcy Code (IBC) / Inter-Creditors Agreement (ICA) | ||
Content
The Company Secretary
All Listed Companies / Interim Resolution Professionals (IRP)/ Resolution Professionals (RP)
Subject: Guidance note for filing intimations w.r.t. Insolvency and Bankruptcy Code (IBC) / Inter-Creditors Agreement (ICA)
Dear Sir/ Madam,
This is in furtherance to the below mentioned circulars issued by the Exchange:
1. Exchange Circular No. LIST/COMP/29/2019-20 dated September 24, 2019, issued in relation to Disclosure of Default / Inter Creditor Agreement (ICA),
2. Exchange Notice No. 20210709-9 dated July 09, 2021, issued in relation to Guidance note for companies undergoing Corporate Insolvency Resolution Process
3. Exchange Notice No. 20220520-52 dated May 20, 2022, issued in reference to Surveillance Measures for Securities under IBC/ICA.
All listed entities/Resolution Professionals are required to strictly adhere to filing the disclosures at various stages of Corporate Insolvency Resolution Process (CIRP) in the designated subject through BSE listing centre. Below mentioned shall be the path for submission of intimations w.r.t Admission of CIRP, Approval of Resolution Plan by NCLT and Withdrawal of CIRP by Hon’ble NCLT.
- Commencement of CIRP– Intimation shall be submitted as corporate announcement through BSE listing centre under following path:
Category / Sub-Category: Corporate Insolvency Resolution Process (CIRP) >Description: Admission of application by Tribunal / Appointment of Interim Resolution Professional (IRP)
- Approval of Resolution Plan– Intimation shall be submitted as corporate announcement through BSE listing centre under following path:
Category / Sub-Category: Corporate Insolvency Resolution Process (CIRP) > Description: Approval of Resolution plan by Tribunal
- Withdrawal of CIRP– Intimation shall be submitted as corporate announcement through BSE listing centre under following path:
Category / Sub-Category: Corporate Insolvency Resolution Process (CIRP) > Description: Updates – Corporate Insolvency Resolution Process (CIRP)
Apart for the above all other intimations w.r.t CIRP (as per the provisions of schedule III Part A of SEBI (LODR) Regulations, 2015) shall also be submitted under the respective tab under “Corporate Insolvency Resolution Process“through BSE Listing centre only.
It shall be pertinent to note that the circular is in furtherance to the guidance note & circulars already issued by the Exchange as mentioned above.
Further, all listed entities shall promptly intimate the Exchange in case of any Resolution plan/ Restructuring in relation to loans/borrowings from banks/financial institutions including signing of Inter-Creditors Agreement (ICA) by lenders along with the broad details in accordance with Para A of Schedule III of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. Below mentioned shall be the path for submission of intimations w.r.t Resolution plan/ Restructuring in relation to loans/borrowings from banks/financial institutions.
- Resolution plan/ Restructuring in relation to loans/borrowings from banks/financial institutions including Signing of Inter Creditors Agreement (ICA) by lenders–
Intimation shall be submitted as corporate announcement through BSE listing centre under following path:
Category / Sub-Category: Announcement under Regulation 30 (LODR) >
Description: General
Announcement Type: General Announcements
Subject: “Announcement related to ICA”
Please find annexed the above referred circulars for companies undergoing Corporate Insolvency Resolution Process.
All listed entities are requested to kindly take note of the contents of the circular and ensure compliance of the same.
Ashok kumar Singh
AGM-Listing Compliance
Shyam Bhagirath
Manager-Listing Compliance
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Guidance note for companies undergoing Corporate Insolvency Resolution Process
| Notice No. | 20210709-9 | Notice Date | 09 Jun 2021 |
| Category | Circulars Listed Companies | Segment | Equity |
| Subject | Guidance note for companies undergoing Corporate Insolvency Resolution Process | ||
Circular No. IP/002/2018 January 3, 2018, issued by Insolvency and Bankruptcy Board of India, provides as under:
“It is hereby directed that while acting as an Interim Resolution Professional, a Resolution Professional, or a Liquidator for a corporate person under the Code, an insolvency professional shall exercise reasonable care and diligence and take all necessary steps to ensure that the corporate person undergoing any process under the Code complies with the applicable laws.
It is clarified that if a corporate person during any of the aforesaid processes under the Code suffers any loss, including penalty, if any, on account of non-compliance of any provision of the applicable laws, such loss shall not form part of insolvency resolution process cost or liquidation process cost under the Code. It is also clarified that the insolvency professional will be responsible for the non-compliance of the provisions of the applicable laws if it is on account of his conduct.”
Accordingly, the insolvency professional is required to ensure that the company complies with the applicable laws, including SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2018.
SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 (“LODR Regulations”) was amended in the year 2018 vide SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2018 and point 16 was inserted in Para A of Part A of Schedule III of LODR Regulations w.e.f. May 31, 2018 which mandated disclosures at various stages by companies undergoing Corporate Insolvency Resolution Process (“CIRP”). This was further amended by SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2021 which enhanced the disclosure requirement w.e.f. January 08, 2021.
LODR Regulations contain the list of events that are required to be disclosed in relation to CIRP. Further in consultation with SEBI, the following disclosures shall also be submitted to the Exchange in addition to those already prescribed under the LODR Regulations:
- Prior intimation of at least two working days intimating about the date of hearing where NCLT would be considering the Resolution
- Disclosure of the approval of resolution plan to be made to the Exchange on oral pronouncement or otherwise of the Order on immediate basis and not later than 30
- The Resolution Professional shall inform through the Exchange platform any impact on the existing holders / investors of listed securities on areas such as status of listing, the value of holding of existing holders, write off/ cancellation/ extinguishment of existing equity shares/ preference shares/ debentures, without any payment to such holders, where applicable.
- Companies/Resolution Professionals are advised to be guided by the provisions of the LODR Regulations and advised to maintain the confidentiality of the resolution plan until details are not submitted on the Exchange Platform
Abhijit Pai
Dy. General Manager Listing Compliance
Shyam Bhagirath Manager
Listing Compliance
July 9, 2021
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| Notice No. | 20220520-52 | Notice Date | 20 May 2022 |
| Category | Trading | Segment | Equity |
| Subject | Surveillance Measure for securities under IBC/ICA – Update | ||
This is in partial modification of the Exchange notice no. 20180608-34 dated June 08, 2018 and 20190924-33 dated September 24, 2019 regarding securities under IBC/ICA.
As per the joint Surveillance meeting of Exchanges and SEBI held on May 20, 2022, the following revised criteria shall be applicable for the above frameworks:
1. Surveillance framework for companies under ICA
| Revised framework | ||
| ICA Stage I | Shortlisting Criteria
1. Close-to-Close Price Variation greater than 25% in 5 Trading days OR 2. Close-to-Close Price Variation greater than 50% in 15 Trading days OR 3. Close-to-Close Price Variation greater than 100% in 30 Trading days OR 4. Close-to-Close Price Variation greater than 200% in 3 Months Review of the securities for inclusion under ICA Stage I shall be on Daily basis. |
Surveillance Action
Scrips to be reviewed for exit from stage I or movement to Stage II on last trading day of the month post elapsing of minimum 1 month in ICA Stage I. |
| ICA Stage II | Scrips to be reviewed for inclusion under ICA Stage II on last trading day of the month post elapsing of minimum 1 month in ICA Stage I
Shortlisting Criteria 1. Close-to-Close Price Variation greater than 25% in 5 Trading days OR 2. Close-to-Close Price Variation OR 3. Close-to-Close Price Variation greater than 100% in 30 Trading days OR 4. Close-to-Close Price Variation |
Surveillance Actions
Scrips to be reviewed for movement to Stage I on last trading day of the month post elapsing of minimum 1 month in ICA Stage II |
2. Surveillance framework for companies under IBC
| Revised framework | ||
| Shortlisting Criteria | Surveillance Action | |
| Receipt of corporate announcement / disclosure from the company |
|
|
| IBC Stage I |
OR
OR
|
Scrips to be reviewed for exit from stage I |
| IBC Stage II |
OR
OR
OR
Review of the securities for inclusion under IBC Stage II shall be on Monthly basis. |
Scrips to be reviewed for movement to Stage I on last trading day of the month post elapsing of minimum 1 month in IBC Stage II. |
All other extant conditions and requirements under IBC/ICA frameworks shall continue to apply.
Market participants may note that the above framework shall be in conjunction with all other prevailing surveillance measures being imposed by the Exchanges from time to time.
Further, it may also be noted that the shortlisting of securities under aforesaid framework is purely on account of market surveillance and it should not be construed as an adverse action against the concerned company / entity.
The aforesaid revised framework shall be effective from May 23, 2022.
In case of any clarifications, members may contact on following numbers 022 2272 5001/ 1717/5158.
May 20, 2022
LIST/COMP/29/2019-20 | September 24, 2019
Dear Sir/Madam,
Subject: Disclosure of Default / Inter Creditor Agreement (ICA) by listed companies
With a view to provide for early recognition, reporting and time bound resolution of stressed assets, RBI vide circular dated June 07, 2019 had issued certain directions to Scheduled Commercial Banks, All India Term Financial Institutions (such as NABARD, NHB, EXIM Bank, SIDBI), Small Finance Banks, Systematically Important Non-Deposit taking Non-Banking Financial Companies and Deposit taking Non-Banking Financial Companies as part of RBI (Prudential Framework for Resolution of Stressed Assets) Directions 2019.
The aforementioned framework inter alia provides for lenders to take a prima facie review of defaulting borrowers within 30 days of default. During this review period, the lenders may decide on a resolution strategy which may include putting in place a Resolution Plan or alternatively initiate legal proceedings under the Insolvency and Bankruptcy Code.
In cases where Resolution Plan is to be implemented, all lenders shall enter into an Inter-Creditor Agreement (ICA), during the above-said review period, to provide for ground rules for finalisation and implementation of the Resolution Plan in respect of borrowers with credit facilities from more than one lender.
It has been observed that the developments related to the Inter-Creditor Agreement (ICA) are likely to have significant impact on the prices of the securities of the listed entities whose assets have been deemed to be ‘stressed’ on account of default or delay of interest / principal payments. Hence, as per the provisions of SEBI (LODR) Regulations, 2015, the developments such as signing of Inter Creditor Agreement (ICA) by the lenders of the listed company, is deemed to be ‘material’ as it is likely to have significant impact on the ownership and governance of the Company.
Hence the following directions are being issued in consultation with SEBI:
1.Listed entities shall promptly disclose to the Exchange regarding the material developments pertaining to default and/or Inter Creditor Agreement (ICA), in terms of Regulation 30(1) and 30(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and all amendments and circulars issued thereunder.
2. All participants, who have acquired confidential information in the course of developments pertaining to default and/or ICA, shall maintain the confidentiality of such information, until the same is disclosed to the Exchanges for public dissemination. Such participants shall include the companies, lenders and any other entities who may have access to unpublished price sensitive information (UPSI) as defined in SEBI (PIT) Regulations, 2015.
3. Such participants shall continue to ensure that a strong and robust framework to maintain confidentiality of the unpublished price sensitive information and ensure that persons (including the lenders and any other entities who may have access to UPSI as defined in SEBI (PIT) Regulations, 2015) are put through necessary restrictions as required under the provisions of the SEBI (Prohibition of Insider Trading) Regulations 2015.
4. Companies shall on their own promptly confirm or deny (as the case may be) and clarify to stock exchanges regarding any rumours or news on developments pertaining to default and/or Inter Creditor Agreement (ICA).
Listed Companies are required to take note of the same and comply accordingly.
Abhijit Pai
Deputy General Manager
Listing Compliance
Shyam Bhagirath
Associate Manager
Listing Compliance
