SEBI on April 13, 2023 has issued clarification regarding Contribution by eligible Issuers of debt securities to the Settlement Guarantee Fund of the Limited Purpose Clearing Corporation for repo transactions in debt securities.
It has been decided to put in place, the following framework for upfront collection of amounts as charges from eligible issuers at the time of allotment of debt securities:
- The eligible issuers shall be notified by the LPCC as per its risk management policy.
- An amount of 0.5 basis points of the issuance value of debt securities per annum based on the maturity of debt securities shall be collected by the Stock Exchanges and placed in an escrow account prior to the allotment of the debt securities. This amount is applicable on a public issue or private placement of debt securities under the SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021.
- Stock Exchanges shall transfer the amounts so collected to the bank account of the LPCC within one working day of the receipt of the amount and inform the details of the same to the LPCC.
- The details of the amounts so collected shall also be disclosed by the Stock Exchanges on their websites.
- The abovementioned charges shall be collected on the basis of Actual/Actual. The LPCC shall provide an illustration of the calculation of the amounts to be contributed by the eligible issuers.