Securities Exchange Board of India (SEBI) vide Circular no. SEBI/HO/DDHS/CIR/P/103/2020 dated 23rd June, 2020 has came out with Operational framework for transactions in defaulted debt securities post maturity date/redemption date under provisions of SEBI (Issue and Listing of Debt Securities) Regulations, 2008.

SEBI has received various Representations from market participants and investors to allow transactions in debt securities where redemption amount has not been paid on maturity/redemption date (referred as defaulted debt securities) and has decided  to introduce an operational framework for transactions in defaulted debt securities Accordingly.

Applicability: The provisions of this circular shall come into force from July 01, 2020.

Outline of the operational framework presented in a tabular form along-with timelines:

Event Activity to be undertaken Timeline (Working Days) By To
1. Execution of Debenture trust deed Pre authorization to seek debt redemption payment related information from issuer’s bank At the time of execution of the deed Issuer Debenture Trustee(s)
2. Any change in bank details of issuer for making debt redemption payment Information regarding updated bank details Within 1 working day of event Issuer Debenture Trustee(s)
3. Creation of ISIN / Listing of Debt Securities Intimation of Redemption date Issuer Depositories Stock Exchange(s)
4. Redemption/ Maturity date (T day) Non acceptance of trades for reporting/ settlement T-2 Stock Exchange
5. Temporary restriction on transaction in ISIN T Depository
6. Intimate Status of payment of debt securities T+1 Issuer Stock Exchange(s) Depositories Debenture Trustee(s)
7. Non receipt of status of payment from Issuer Independent Assessment of Payment Status T+2 to T+9 Debenture Trustee(s)
8. Intimate Status of payment of debt securities By T+9 Stock Exchange(s) Depositories
9. Receipt of information regarding full payment Obligations as per para 9 of Annexure A T+3/T+11/event basis, as applicable Depositories Stock Exchanges
10. Receipt of information regarding non payment Obligations as per para 4-8 of Annexure A Depositories Stock Exchanges
Continuous assessment of payment
11. Any development that impacts the status of default of the concerned debt securities (including restructuring of debt securities, IBC proceedings, its repayment, etc.) Intimate updated Status of payment of debt securities Within 1 working day of event Issuer or Debenture Trustee(s) 1. Stock Exchange(s)

2. Depositories

12. Continuous assessment of Payment Intimate Status of payment of debt securities 2nd working day of April every financial year Issuer 1. Stock Exchange(s)

2. Depositories

3. Debenture Trustee(s)

Non receipt of status of payment from Issuer Independent Assessment  of Payment Status 3rd working day of April 7th working day of April of every financial year Debenture Trustee(s)
14. Intimate Status of payment of debt securities Within 7 working days of April of Every financial year 1. Stock Exchange(s)

2. Depositories

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