The Securities and Exchange Board of India (“SEBI”) has recently amended the (i) Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (“NCS Regulations”), and (ii) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”).

NCS Regulations

In the NCS Regulations, SEBI through the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2024, inter alia, amended the following regulations:

1. Regulation 23 has been amended to insert sub-regulation (7), which requires the issuer of listed non-convertible securities to fix a record date for the purposes of payment of interest or dividend, repayment of principal or any other corporate actions. Such record date should be fixed at 15 (fifteen) days prior to the relevant due date.
2. Regulation 40 has been amended to insert sub-regulation (2), which requires the debenture trustee (in case of a public issue) to furnish to SEBI and the stock exchange(s), a due diligence certificate at the time of filing of the listing application by the issuer. Prior to the amendment, the requirement to submit the due diligence certificate was only at the time of filing the draft offer document with the stock exchange(s) and prior to opening of the public issue of debt securities. Further, sub-regulation (3) has been inserted in Regulation 40, which requires the stock exchange to disclose the offer document and due diligence certificates provided by the debenture trustee on its website.
3. Regulation 44 has been amended to insert sub-regulation (3A), which requires the stock exchange to disclose the placement memorandum and due diligence certificates provided by the debenture trustee (in case of a private placement) on its website.
4. In Schedule I, which sets out the disclosures required to be made in the offer document, a proviso has been added which enables issuers (whose non-convertible securities are already listed as on the date of filing of the offer document or placement memorandum) to provide only a web-link and a static quick response code (“QR Code”) of the audited financial statements in the offer document or placement memorandum, subject to (a) such listed issuers disclosing a comparative key operational and financial parameter on a standalone and consolidated basis, certified by the statutory auditor(s), for the last 3 (three) completed years, in the offer document, and (ii) by scanning the static QR Code or clicking the web-link, will display the audited financial statements for last 3 (three) financial years of such issuer on the website of the stock exchange, where such data is hosted.
5. Schedule IV and Schedule IVA have been amended to provide new formats for the due diligence certificate to be provided by the debenture trustee both for secured and unsecured non-convertible securities.

LODR Regulations

In the LODR Regulations, SEBI through the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2024, has amended regulation 52(8), which requires listed entities to publish their financial results in at least one English national daily newspaper circulating in the whole or substantially the whole of India. Pursuant to the amendment, listed entities may now publish only a window advertisement in the newspapers that refers to a QR Code and the link of the website of the listed entity and stock exchange(s), where such financial results are available, subject to the following conditions:

1. For non-convertible securities outstanding as on the date of notification of this amendment, the listed entity has obtained prior approval from the debenture trustee in question; and
2. In case of any issuances after the date of notification of this amendment, the listed entity can either make a disclosure in the offer document regarding the window advertisement in the newspapers or obtain prior approval from the debenture trustee in question.

These amendments to the NCS Regulations and the LODR Regulations came into force on July 10, 2024.

Please find the copies of the NCS Regulations (amended till July 6, 2023) and the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2024, here and here.

Please also find the copies of the LODR Regulations (amended till May 17, 2024) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2024, here and here.

This update has been contributed by Nidhi Arya (Partner) and Avin Sarkar (Senior Associate).

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