Sebi proposes changes in norms pertaining to non-convertible securities

Markets regulator Securities and Exchange Board of India (Sebi) plans to introduce the concept of general information and key information documents as well as other reforms in regulations pertaining to the issuance and listing of non-convertible securities.

Sebi (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (NCS Regulations) were notified in August 2021. The watchdog has issued a consultation paper on the proposal for the introduction of the concept of General Information Document (GID) and Key Information Document (KID), mandatory listing of debt securities of listed issuers, and other reforms under the NCS Regulations.

"... Certain provisions of the NCS Regulations are being reviewed and additional provisions are proposed to be introduced, in order to provide ease of doing business to the issuers, safeguard the interests of the investors and at the same time increase transparency in the market by encouraging issuances of debt securities in the listed space," it said.

Comments have been sought on the consultation paper till February 24. Sebi is looking to ensure parity between initial disclosures required to be made in a prospectus for public issuance of debt securities/ non-convertible redeemable preference shares (NCRPS) and a placement memorandum for private placement of non-convertible securities proposed to be listed.

Besides, the idea is to introduce the concepts of GID and KID for private placement of non-convertible securities and commercial papers that are proposed to be listed. Among others, Sebi has proposed that the GID will be valid for a period of one year. The period will commence from the date of opening of the first offer of non-convertible securities under that GID.