Capital market regulator Securities & Exchange Board of India (Sebi) has pitched for simplifying the process of issuing debt in the primary market. The watchdog, with a view to resuscitating the corporate debt market, has proposed that companies which are listed in the equity market need to make only minimal incremental disclosures when they want to issue debt instruments?either public offer or private placement.
Dossiers of detailed information about these companies are available in the public domain and material developments, under the equity listing agreement, are available on a continuous basis, a consultative paper on draft Sebi (Issue & Listing of Debt Securities) Regulations, 2008, stated.
In an eight-page proposal, Sebi said that the draft paper reflected Sebi?s approach towards rationalised and stand-alone regulations for providing an enabling regulatory framework to develop the corporate debt market.
?Modifications have been aimed at reducing time and unnecessary burden of issuance of these securities and according flexibility to issuers to structure their instruments without diluting areas of regulatory concern,? the draft proposal states.
Sebi has invited public comment on its draft proposals until January 23, which will then be taken to the Sebi board before a final decision.
The Sebi note further states, ?Where the equity of the issuer is not listed and such a company raises debt capital?whether public offering or private placement?detailed disclosures are required. Due diligence, proper disclosures and credit rating will be key elements of corporate debt issuance.?
The draft proposal said that issuances to 50 or more persons will require mandatory listing and specific disclosures in terms of the proposed regulations and the corresponding listing agreement.
?It is proposed to create an enabling mechanism for e-issuances of debt securities to the public, the details for which are being worked out and will be notified by means of a circular,? Sebi added.