Sebi mandates greater disclosure for listed corporate bonds

Credit: REUTERS/SHAILESH ANDRADE

India's market regulator has tightened disclosure rules for listed corporate bonds to increase transparency and ensure debenture trustees perform their duties on time.

SINGAPORE, May 28 (IFR) - India's market regulator has tightened disclosure rules for listed corporate bonds to increase transparency and ensure debenture trustees perform their duties on time.

The Securities and Exchange Board of India said in a circular published yesterday that debenture trustees will have to display on their website the calendar of interest/redemptions, due and paid, for all outstanding bond issues. For new issues, such details must be uploaded within five days of closure of the issue.

DTs will also have to update on their website the status of payment no later than one day from the due date. In case the payment is delayed, DTs will have to update the calendar, specifying "delayed payment".

Issuers have to forward the details of bondholders to DTs at the time of allotment and every month thereafter so that DTs can communicate any default to bondholders on time.

DTs will also have to disclose compensation agreements with their clients.

For privately placed issues, issuers must include covenants providing for penalties in case of default on interest payment/principal redemption (2% per annum over the coupon rate for the default period) and delay in listing of over 20 days post-allotment (1% per annum over the coupon rate from the expiry of 30 days from the deemed date of allotment until listing).

(Reporting by Krishna Merchant; Editing by Vincent Baby)

((Krishna.Merchant@thomsonreuters.com; +65 64174544;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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