New Delhi : Markets regulator Sebi on Thursday drastically cut the timeline for listing of debt securities to six days from 12 days at present, in order to make the existing process of issuance of such securities simpler and cost effective.

Besides, the Securities and Exchange Board of India (Sebi) has made ASBA (Application Supported by Blocked Amount) mandatory for all the investors for making payment while applying in a public issue of debt securities. The mandatory ASBA facility would reduce the time taken for collecting banks to commence clearing of payment instruments, forwarding application forms along with bank schedules to registrar and undertaking of technical rejection test.

The new rule would be applicable for all public issues of debt securities from October 1, 2018, the Securities and Exchange Board of India (Sebi) said in a circular.

“In order to make the existing process of issuance of debt securities, NCRPS (non-convertible redeemable preference shares) and SDI (securitised debt instruments) easier, simpler and cost effective for both issuers and investors…it has been decided to reduce the time taken for listing after the closure of issue to 6 working days as against the present requirement of 12 working days,” it noted.

An investor, intending to subscribe to a public issue, will have to submit a completed bid-cum application form to self-certified syndicate banks (SCSBs), with whom the bank account to be blocked is maintained.

Apart from self-certified syndicate banks, investors will have the option to submit the application with market intermediaries like registered stock broker; depository participant and registrar to an issue and share transfer agent.

The SCSBs or the market intermediaries will at the time of receipt of application, give an acknowledgement to investor, by specifying the application number to the investor, as a proof of having accepted the application form.

After accepting the form, SCSB will have to capture and upload details in the electronic bidding system as specified by the stock exchange and may begin blocking of funds available in the bank account specified in the form.

In case of market intermediaries, such intermediaries will have to capture and upload details in the electronic bidding system as specified by the stock exchange.

The SCSBs or intermediaries will have to provide guidance to their investors on making applications in public issues.

The stock exchanges will have to validate the electronic bid details with depository’s records by the end of each bidding day and bring the inconsistencies to the notice of SCSBs or intermediaries concerned, for rectification and re-submission within the time specified by bourses.

Issuance of securities on e-book platform gets easier

NEW DELHI: To ease the process of issuance of securities on electronic book platform, markets regulator Sebi on Thursday allowed investors to place multiple bids in a private placement issue on debt basis and permitted depositories to act as facilitators. In addition to the current system of open bidding, Sebi has allowed closed bidding on electronic book platform (EBP). This is subject to the issuer disclosing the mode of bidding. Under closed bidding, there will be no real-time dissemination of bids on the EBP platform. The decision has been taken in consultation with market participants. The move is aimed at rationalising and easing the process of issuance of securities on such platform. Sebi, in January this year, had made electronic platform mandatory for all private placement issues on debt basis that have a threshold of Rs 200 crore.

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Free Press Journal