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In its Notification dated 8th July 2024, the Securities and Exchange Board of India (SEBI) has enacted the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2024. These amendments, effective upon publication in the Official Gazette, introduce several changes to the existing regulations. Notably, they mandate issuers to fix a record date for payments related to non-convertible securities, stipulating it must be set fifteen days prior to the due date. Additionally, the regulations now require debenture trustees to provide due diligence certificates in specified formats at various stages of the issuance process, ensuring compliance and transparency. Moreover, listed issuers are permitted to include a QR code and web link to their audited financial statements in offer documents or placement memoranda, subject to certain conditions including certification by statutory auditors.

SECURITIES AND EXCHANGE BOARD OF INDIA

NOTIFICATION

Mumbai, the 8th July, 2024

SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF NON-CONVERTIBLE SECURITIES) (AMENDMENT) REGULATIONS, 2024

No. SEBI/LAD-NRO/GN/2024/190— In exercise of the powers conferred under section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021, namely: –

1. These regulations may be called the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2024.

2. They shall come into force on the date of their publication in the Official Gazette.

3. In the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021,

I. in regulation 23, after sub-regulation (6), the following shall be inserted, namely,-

“(7) (a) The issuer shall fix a record date for the purposes of payment of interest, dividend and payment of redemption or repayment amount or for such other purposes as specified by the Board.

(b) Such record date shall be fixed at fifteen days prior to the due date of payment interest or dividend, repayment of principal or any other corporate actions.”

II. regulation 40 shall be substituted with the following namely,-

“Due Diligence by Debenture trustee

40. (1) The debenture trustee shall, at the time of filing the draft offer document with the stock exchange(s) and prior to the opening of the public issue of debt securities, furnish to the Board and to the stock exchange(s), a due diligence certificate:

(a) in case of secured debt securities, in the format as specified in Part A of Schedule IV of these regulations; and

(b) in case of unsecured debt securities, in the format as specified in Part A of Schedule IVA of these regulations.

(2) The debenture trustee shall at the time of filing of the listing application by the issuer, furnish to the Board and to the stock exchange(s), a due diligence certificate:

(a) in case of secured debt securities, in the format as specified in Part B of Schedule IV of these regulations; and

(b) in case of unsecured debt securities, in the format as specified in Part B of Schedule IVA of these regulations.

(3) The stock exchange shall disclose the offer document and due diligence certificates provided by the debenture trustee on its website.”

III. in regulation 44, sub-regulation (3) shall be substituted with the following, namely,-

“(3) The debenture trustee shall submit a due diligence certificate to the stock exchange:

(a) in case of secured debt securities, in the format as specified in Part B of Schedule IV of these regulations; and

(b) in case of unsecured debt securities, in the format as specified in Part B of Schedule IVA of these regulations.

(3A) The stock exchange shall disclose the placement memorandum and the due diligence certificates provided by the debenture trustee on its website.”

IV. in Schedule I, clause 3.3.10, after sub-clause (a) and before sub-clause (b), the following shall be inserted, namely,-

“Provided that, issuers whose non-convertible securities are listed as on the date of filing of the offer document or placement memorandum, may provide only a web-link and a static quick response code of the audited financial statements in the offer document or placement memorandum subject to the following conditions:

(i) Such listed issuers shall disclose a comparative key operational and financial parameter on a standalone and consolidated basis, certified by the statutory auditor(s) who holds a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India, for the last three completed years in the offer document.

(ii) The scanning of such static quick response code or clicking on the web-link, shall display the audited financial statements for last three financial years of such issuer on the website of the stock exchange where such data is hosted.”

V. Schedule IV and IV-A shall be substituted with the following, namely,-

“SCHEDULE IV

FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE DEBENTURE TRUSTEE

Part A

[See Regulation 40(1)(a)]

FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE DEBENTURE TRUSTEE AT THE TIME OF FILING OF DRAFT OFFER DOCUMENT AND BEFORE OPENING OF THE ISSUE

To,

Stock Exchange

Dear Sir / Madam,

SUB.: ISSUE OF____________________ BY______________ LTD.

We, the Debenture Trustee (s) to the above mentioned forthcoming issue state as follows:

(1) We have examined documents pertaining to the said issue and other such relevant documents, reports and certifications.

(2) On the basis of such examination and of the discussions with the issuer, its directors and other officers, other agencies and of independent verification of the various relevant documents, reports and certifications, WE CONFIRM that:

(a) The issuer has made adequate provisions for and/or has taken steps to provide for adequate security for the debt securities to be issued.

(b) The issuer has obtained the permissions / consents necessary for creating security on the said property (ies).

(c) The issuer has made all the relevant disclosures about the security and also its continued obligations towards the holders of debt securities.

(d) Issuer has adequately disclosed all consents/ permissions required for creation of further charge on assets in offer document/ placement memorandum and all disclosures made in the offer document/ placement memorandum with respect to creation of security are in confirmation with the clauses of debenture trustee agreement.

(e) Issuer has disclosed all covenants proposed to be included in debenture trust deed (including any side letter, accelerated payment clause etc.), in the offer document/ placement memorandum.

(f) Issuer has given an undertaking that charge shall be created in favour of debenture trustee as per terms of issue before filing of listing application.

PLACE:

DATE:

DEBENTURE TRUSTEE TO THE ISSUE WITH HIS RUBBER STAMP

Part B

[See Regulation 40(2)(a) and Regulation 44(3)(a)]

FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE DEBENTURE TRUSTEE AT THE TIME OF FILING OF LISTING APPLICATION BY ISSUER

To,

Stock Exchange

Dear Sir / Madam,

SUB.: ISSUE OF___________________BY________________LTD.

We, the Debenture Trustee (s) to the above mentioned forthcoming issue state as follows:

(1) We have examined documents pertaining to creation of charge over assets of Issuer.

(2) On the basis of such examination and of the discussions with the issuer, its directors and other officers, other agencies and of independent verification of the various relevant documents, reports and certifications, WE CONFIRM that:

(a) The Issuer has created charge over its assets in favour of debenture trustee as per terms of offer document/ placement memorandum and debenture trustee agreement.

(b) Issuer has executed the debenture trust deed as per the terms of offer document/ placement memorandum and debenture trustee agreement.

(c) The Issuer has given an undertaking that charge shall be registered with Sub-registrar, Registrar of Companies, Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI), Depository etc., as applicable, within 30 days of creation of charge. The issuer has made all the relevant disclosures, which are true, fair and adequate, including that about the security and also its continued obligations towards the holders of debt securities.

PLACE:
DATE:

DEBENTURE TRUSTEE TO THE ISSUE WITH HIS RUBBER STAMP

SCHEDULE IV-A
FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE DEBENTURE TRUSTEE
Part A
[See Regulation 40(1)(b)]

FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE DEBENTURE TRUSTEE AT THE TIME OF FILING OF DRAFT OFFER DOCUMENT AND BEFORE OPENING OF THE ISSUE

To,

Stock Exchange

Dear Sir / Madam,

SUB.: ISSUE OF____________________ BY______________ LTD.

We, the Debenture Trustee (s) to the above mentioned forthcoming issue state as follows:

(1) We have examined documents pertaining to the said issue and other such relevant documents, reports and certifications.

(2) On the basis of such examination and of the discussions with the issuer, its directors and other officers, other agencies and of independent verification of the various relevant documents, reports and certifications, WE CONFIRM that:

(a) All disclosures made in the offer document with respect to the debt securities are true, fair and adequate to enable the investors to make a well informed decision as to the investment in the proposed issue.

(b) Issuer has disclosed all covenants proposed to be included in debenture trust deed (including any side letter, accelerated payment clause etc.), in the offer document.

(c) Issuer has given an undertaking that the debenture trust deed shall be executed before the filing of listing application.

PLACE:

DATE:

DEBENTURE TRUSTEE TO THE ISSUE WITH HIS RUBBER STAMP

Part B

[See Regulation 40(2)(b) and Regulation 44(3)(b)]

FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE DEBENTURE TRUSTEE AT THE TIME OF FILING OF LISTING APPLICATION BY ISSUER

To,

Stock Exchange

Dear Sir / Madam,

SUB.: ISSUE OF___________________ BY______________ LTD.

We, the Debenture Trustee (s) to the above mentioned forthcoming issue state as follows:

(1) On the basis of examination of documents pertaining to the issue and of the discussions with the issuer, its directors and other officers, other agencies and of independent verification of the various relevant documents, reports and certifications, WE CONFIRM that:

(a) Issuer has executed the debenture trust deed as per the terms of offer document/ placement memorandum and debenture trustee agreement.

(b) The issuer has made all the relevant disclosures, which are true, fair and adequate and also its continued obligations towards the holders of debt securities.

PLACE:

DATE:

DEBENTURE TRUSTEE TO THE ISSUE WITH HIS RUBBER STAMP”

BABITHA RAYUDU, Executive Director

[ADVT.-III/4/Exty./275/2024-25]

Footnotes:

1. The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 were published in the Gazette of India on August 9, 2021 vide No. SEBI/LAD-NRO/GN/2021/39.

2. The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021, were subsequently amended on:

(i) April 11, 2022 by the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2022 vide notification no. SEBI/LAD-NRO/GN/2022/77..

(ii) November 9, 2022 by the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Second) (Amendment) Regulations, 2022 vide notification no. SEBI/LAD-NRO/GN/2022/102.

(iii) February 2, 2023 by the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2023 vide notification no. SEBI/LAD-NRO/GN/2023/119.

(iv) February 7, 2023 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2023 vide notification no. SEBI/LAD-NRO/GN/2023/121.

(v) July 6, 2023 by the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Second Amendment) Regulations, 2023 vide notification no. SEBI/LAD-NRO/GN/2023/135.

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