SEBI issues framework for Security and Covenant Monitoring using DLT of security creation
- Blog|News|Company Law|
- 2 Min Read
- By Taxmann
- |
- Last Updated on 20 April, 2022
Latest from Taxmann
PR No. 13/2022, Dated: 18.04.2022
In order to strengthen the process of security creation and monitoring of security created, asset cover and covenants of the non-convertible securities, The SEBI vide. circular dated August 13, 2021, had specified the manner of recording of charges by Issuers and manner of monitoring by Debenture Trustees (DTs), Credit Rating Agencies, etc., and responsibilities thereof.
Accordingly, SEBI specified that, w.e.f. April 01, 2022, the recording of asset details (and their verification), allotment, listing, and payment of interest or redemption shall be available in the DLT system. Operational guidelines in this regard have been issued vide SEBI circular dated March 29, 2022
Now, in order to ensure the uniqueness of assets of the issuer offered as security, SEBI has required DTs to reconcile and eliminate duplicate entries for an asset in the system on yearly basis. SEBI has also standardized the format for unique Asset ID to a 12-digit alphanumeric string.
SEBI further clarified that the said system is applicable to all the issuers proposing to issue non-convertible securities on or after April 01, 2022, and they shall record the details in the system before activation of ISIN. Depositories shall allot or unfreeze an existing ISIN (in case of re-issuance), as applicable only after confirming the recording of the above-mentioned information by issuers.
However, a relaxation till July 01, 2022, has been provided to issuers who are unable to record details in the system after explaining Depositories, post which ISIN shall not be allotted to an issuer for non-compliance. Further, for existing outstanding non-convertible securities, issuers shall enter the details into the DLT system on or before September 30, 2022.
Click Here To Read The Full Notification
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
