SEBI Proposes to Introduce a ‘Liquidity Window Facility’ for Investors in Debt Securities via a Stock Exchange Mechanism

Consultation Paper; Dated: 16.08.2024

SEBI has proposed introducing a ‘liquidity window facility’ for investors in debt securities via the stock exchange mechanism. This facility can be provided only for prospective issuances of debt securities via the public issue process or on a private placement basis. The issuer must provide this facility only after the expiry of 1 year from the date of issuance of debt securities.

Further, the issuer must specify the eligibility of investors who can avail of the liquidity window facility, i.e. whether the facility must be available to all investors in the debt securities or only to retail investors in the debt securities. Eligible investors desirous of availing of the liquidity window must be required to hold the debt securities in demat form.

Also, the liquidity window facility must be kept open for 3 working days on a monthly/quarterly basis at the discretion of the issuer. The schedule of the liquidity window must be disclosed upfront in the offer document. The issuer may designate any of the stock exchanges as the ‘designated stock exchange’ for the purpose of liquidity window. Comments on the proposals may be submitted by September 6, 2024.

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