First-time issuers of NCDs may alter AoA to appoint a nominee of Debenture Trustee: SEBI
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- Last Updated on 13 February, 2023
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Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/CIR/P/2023/028, Dated 09.02.2023
SEBI recently mandated the issuer companies to include provisions in their Articles of Association (AoA), with respect to the requirement for the board to appoint a person nominated by the debenture trustee. The regulations also provide a time period till 30.09.2023 for existing debt-listed issuers to amend their AoA.
Consequently, after receiving representations from certain first-time issuers who are in the process of preparing for their first listed privately placed Non-Convertible Debentures or public issue of NCDs, the SEBI advised exchanges to take an undertaking from first-time issuers that they will ensure that their AoA is amended within a period of 6 months from the date of the listing of the debt securities.
This undertaking may be obtained at the time of granting the in-principle approval. The issuer shall, within such time, comply and report compliance to Stock Exchanges, which shall periodically monitor/ remind such issuers on doing the needful. The circular shall come into force w.e.f 09.02.2023.
Click Here To Read The Full Circular
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