SEBI simplifies guidelines on corporate bonds

In order to facilitate development of a vibrant primary market for corporate bonds in India, Securities and Exchange Board of India (SEBI) has amended the provisions pertaining to issuances of Corporate Bonds under the SEBI (Disclosure and Investor Protection) (DIP) Guidelines, 2000 vide circular dated December 03, 2007. The highlights of the amendments are:

1. For public/ rights issues of debt instruments, issuers will now need to obtain rating from only one credit rating agency instead of from two as required at present. This is with a view to reduce the cost of issuances.

2. In order to facilitate issuance of below investment grade bonds to suit the risk/ return appetite of investors, the stipulation that debt instruments issued through public/ rights issues shall be of at least investment grade has been removed.

3. Further, in order to afford issuers with desired flexibility in structuring of debt instruments, it has been decided that structural restrictions such as those on maturity, put/call option, on conversion, etc currently in place have been done away with.

Amendments in Disclosure and Investor Protection (DIP) guidelines ...click here

Guidelines on Offshore Derivative Instruments (Participatory Notes) ...click here

SEBI Board approves New Derivative Products ...click here

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