The Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2020
The amendment strengthens the role of Debenture Trustees (DT(s)) so as to protect the interest of debenture holders. The DT(s) shall exercise independent due diligence of the assets on which charge is being created.
SEBI Board meeting approves to amend major regulations
The Board approved amendments to SEBI (Prohibition of Insider Trading) Regulations, 2015 to provide a time period of up to 3 years for reporting violations under the insider trading laws through the informant mechanism and Informants are required to include specific information (such as details of securities, trades by suspect and unpublished price sensitive information based on which insider trading is alleged) with respect to the alleged violations.
The Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2020
An entity that is established to undertake the activity of clearing and settlement of repo transactions shall now be governed by special provisions applicable to limited purpose clearing corporations. “Repo” refers to an instrument for borrowing by selling debt securities with an agreement to repurchase the debt securities on an agreed future date at an agreed price which includes interest on funds borrowed.
SEBI issues guidelines for inter-scheme transfers of securities.
The use of market borrowing before ISTs will be optional and Fund Manager may at his discretion take a decision on borrowing in the best interest of unitholders.
SEBI extends the facility of conducting unitholders meeting of REIT and InVITs via video conferencing till 31st December.
The facility for conducting extraordinary meetings of unitholders of REITs and InvITs through video conferencing and other audio-visual has been extended till December 31.
SEBI publishes an additional framework for the issuance, listing and trading of PNCPS and IPDIs
This additional framework states that the Perpetual Non- Cumulative Preference Shares (PNCPS) and Innovative Perpetual Debt Instruments (IPDIs) must mandatorily be issued on the Electronic Book Provider (EBP) platform. Furthermore it also specifies the type of permitted investors (only Qualified Institutional Buyers), the allotment size (min. of Rs. crore), trading lot size (min. of Rs.1 crore) and other specified requirements, such as disclosures mentioned in Annex I and provisions of circulars specified in Annex II of the present Circular.
SEBI directs mutual funds to assign risk label to every scheme.
The Risk Level of a scheme will be depicted by “Risk-o-meter” and it shall have six levels of risk for mutual fund schemes.
SEBI directs mutual fund to rename dividend plans.
SEBI has also directed to clearly communicate to the investor that, under dividend option of a Mutual Fund Scheme, certain portion of his capital (Equalization Reserve) can be distributed as dividend.
SEBI comes out with a standardized timeline for listing securities on private placement.
SEBI has been receiving requests from various market participants for clarification on the time period within which securities issued on private placement basis under SEBI ILDS, SEBI NCPRS, SEBI SDI and SEBI ILDM Regulations need to be listed after completion of allotment.
SEBI reviews provisions on valuation of debt and money market instruments due to COVID-19 pandemic
SEBI has now decided to extend discretion to valuation agencies to recognise defaults in cases where the proposal of restructuring of debt is only due to COVID-19 related stress. This discretion is granted to valuation agencies engaged by Asset Management Companies (AMCs) or the Association of Mutual Funds of India (AMFI). The valuation agency may not consider the restructuring or non-receipt of dues as default for the purpose of valuation of money market or debt securities held by mutual funds. This will occur only if upon assessing the proposal, the valuation agency forms the view that the proposed restructuring is solely on account of the fallout of the COVID-19 pandemic. In such a case it will not consider it as a default. Furthermore, any restructuring proposal received by debenture trustees must be immediately communicated to the investors. Any proposal received by mutual funds from lenders or issuers or debenture trustees must be immediately reported to the valuation agencies, credit rating agencies and the AMFI. The AMFI shall then disseminate such information to its members immediately.
