New SEBI Guidelines and Government’s Guarantee Scheme for Corporate Debt Market Development Fund
- Blog|News|Company Law|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 29 July, 2023
Latest from Taxmann
Introduction
Earlier, the SEBI vide. Notification No [Notification No. SEBI/LAD-NRO/GN/2023/132; Dated: 15.06.2023]. Dated June 15, 2023, notified a new category of the Alternative Investment Fund (AIF) named Corporate Debt Market Development Fund (CDMDF).
Later, SEBI vide. Circular No. Dated July 27, 2023 had prescribed a detailed framework for the CDMDF. This framework aims to establish a backstop facility[ “Backstop Facility” refers to the institutional framework being created to enable purchase of investment grade debt securities, particularly during market dislocation.] for the purchase of investment-grade corporate debt securities during times of financial stress.
The framework would help in instilling confidence among the participants in the corporate debt market and enhance secondary market liquidity by creating a permanent institutional framework for activation in times of market stress.
Now, the Government vide Notification No. G.S.R 559(E); Dated: 26.07.2023 has approved the ‘Guarantee Scheme for Corporate Debt’ (GSCD) with the purpose of providing a guarantee cover against debt raised or to be raised by the ‘Corporate Debt Market Development Fund’ (CDMDF).
Further, the CDMDF is required to comply with the ‘Guarantee Scheme for Corporate Debt’ (GSCD) as notified by the Ministry of Finance. The Guarantee Scheme for Corporate Debt aims to provide guarantee cover against the debt raised or to be raised by CDMDF. The trust/fund to manage the scheme shall be named as ‘Guarantee Fund for Corporate Debt’ (GFCD). The Scheme is effective from 26.07.2023.
The key highlights of the Guarantee Scheme for Corporate Debt are as follows:
1. Guarantee Scheme to provide 100% guarantee cover against debt raised/to be raised
The purpose of the Scheme is to provide 100% guarantee cover against debt raised/to be raised by CDMDF, an AIF created/to be created under relevant SEBI Regulations, for the purpose of investing in corporate debt securities at times of market dislocation with a view to stabilize the markets.
The guarantee shall cover debt raised, along with interest accrued and other bank charges thereon, and shall not exceed Rs.30,000 crore.
Click Here To Read The Full Article
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
