Capital markets regulator Sebi has amended norms related to security cover, disclosure of credit ratings and due diligence certificate for unsecured debt securities.

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Sebi has revised rules pertaining to debenture trustee norms, apart from issue and listing of non-convertible securities norms and LODR (Listing Obligations and Disclosure Requirements) rules, according to three separate notifications issued on Monday.

Sebi board had already approved proposals in this regard in February.

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The regulator has altered rules to align the framework and terminology with respect to 'security cover' wherein the term 'asset cover' has been substituted with term 'security cover' in debenture trustee rules and LODR norms.

In addition, the regulator has redrafted rules prescribing the maintenance of security cover sufficient to discharge both principal and interest thereon.

Further, the regulator has rationalised the disclosure requirement with regard to credit ratings and put in place the requirement of a due diligence certificate for unsecured debt securities in the (Issue and Listing of Non-Convertible Securities) rules.

Rationalising the requirement, Sebi said disclosure pertaining to details of credit rating along with the latest press release of the credit rating agency in relation to the issue and declaration that the rating is valid as on the date of issuance and listing need to be made in the prospectus.

It further said that such press releases should not be older than one year from the date of opening of the issue.

Earlier, disclosures were required with regard to details of credit rating along with reference to the rating letter issued (not older than one month on the date of opening of the issue) by the rating agencies in relation to the issue.

Under the new rules related to non-convertible securities, Sebi said the issuer will have to ensure that the debt securities are secured by 100 per cent security cover or higher security cover as per the terms of the offer document and/or debenture trust deed sufficient to discharge the principal amount and the interest thereon at all times for the issued debt securities.