On October 5, 2020, the Securities and Exchange Board of India (“SEBI”) issued a circular with a view to standardize the timelines for listing of securities issued on a private placement basis under the following regulations issued by SEBI (“Circular”):
The following timelines have been stipulated in the Circular:
S. N. |
Details of Activities |
Due Date |
1. |
Closure of issue |
‘T’ |
2. |
Receipt of funds |
To be completed by T + 2 trading day |
3. |
Allotment of securities |
|
4. |
Issuer to make listing application to stock exchange(s) |
To be completed by T + 4 trading day |
5. |
Listing permission from stock exchange(s) |
Further, as per the Circular, depositories are required to activate the ISINs of debt securities issued on private placement basis only after the stock exchange(s) have accorded their approval for listing of such securities.
In order to facilitate re-issuances of new debt securities in an existing ISIN, depositories have been advised to allot such new debt securities under a new temporary ISIN which shall be kept frozen. Upon receipt of listing approval from stock exchange(s) for such new debt securities, the debt securities in the new temporary ISIN shall be debited and the same shall be credited in the pre-existing ISIN of the existing debt securities, before they become available for trading.
Stock exchange(s) have also been advised to inform the details of the listing approval to the depositories whenever listing permission is given.
In case of delay in listing of securities beyond the timelines stipulated above, the issuer shall be required to pay penal interest of 1% (one percent) per annum over the coupon rate for the period of delay to the investor. Further, the issuer shall be permitted to utilize the issue proceeds of its subsequent 2 (two) private placed issuances of securities only after receiving final listing approval from stock exchange(s).
The Circular shall come into force with effect from December 1, 2020.
Please find a copy of the Circular here.
This update has been contributed by Aastha (Partner) and Radhika Kothari (Associate).
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