SEBI Streamlines Disclosure Framework For Issuance Of Bonds, Commercial Papers

Markets regulator SEBI on Wednesday decided to introduce the concept of general information and key information document to do away with multiple filings of placement memoranda by issuers for non-convertible securities and commercial papers and streamline the disclosure framework.

The move will also promote ease of doing business for issuers, the SEBI said in a statement after its board meeting. A General Information Document (GID) will contain the information and disclosures specified in the common schedule and will be filed with the stock exchanges at the time of the first issuance. The GID will have a validity period of one year. 

Thereafter, for subsequent private placements of non-convertible securities and/or commercial paper within the validity period, only a Key Information Document (KID) will be required to be filed with the stock exchanges, containing material changes. The same will facilitate ease of doing business for the issuers. 

To begin with, SEBI said the concept would be made applicable on a 'comply or explain' basis till March 31, 2024, and mandatory thereafter. In order to ensure parity in disclosures required to be made in a prospectus for public issuance of debt securities or non-convertible redeemable preference shares, SEBI cleared a proposal to introduce a common schedule for disclosures. 

In addition, SEBI has decided that the period of compliance for large corporates to meet their financing needs from debt markets through the issuance of debt securities to the extent of 25 per cent of their incremental borrowings in a contiguous block of two financial years will be extended to the contiguous block of three years.

Also, the capital markets regulator has decided to extend the 'comply or explain' period for the high-value listed debt entities (HVDLEs) with an outstanding value of listed non-convertible debt securities of at least Rs 500 crore in respect of corporate governance norms till March 31, 2024.

To enhance ease of doing business for issuers of non-convertible securities, the disclosure requirements pertaining to the payment of interest/coupon and redemption amount are being streamlined and multiple filings are being eliminated, SEBI said, The Board also approved the proposal to consolidate the disclosure requirements under the LODR (Listing Obligations and Disclosure Requirements) Regulations.