In the consultative paper on “Draft Sebi (issue and listing of debt securities) Regulations, 2008” placed on the Sebi website stated that the simplification process to be taken is in addition to the measures the market regulator has already taken till date.

Some of the major features of the draft regulations include rationalisation of disclosure requirements, enhanced responsibilities to merchant bankers for exercising due diligence and issuance of certificates in regard to new issuance and mandatory listing of private placement of debt under Section 67(3) of Companies Act.

Reducing time

“Modifications have been aimed at reducing time and unnecessary burden of issuance of these securities and according flexibility to issuers to structure their instruments, without diluting areas of regulatory concern,” the draft paper said. Sebi has invited public comments on the draft regulations by January 23 through e-mail and by January 17 through post.

The regulations cover issuance and listing of debt securities which are not convertible, either in whole or in part into equity instruments. While due diligence, proper disclosures and credit rating will be key elements of corporate debt issuance, the paper envisages these will be ensured by Sebi, through certifications issued by merchant bankers. Sebi said disclosure requirements would be simplified further.