Market regulator amends listing agreement for gilts

Accordingly, the amendments briefly summarised under 100 per cent asset cover are to align the Listing Agreement with the provisions of Companies Act, 1956, which requires issuers to maintain 100 per cent asset cover sufficient to discharge the principal amount at all times for the debt securities issued.  

Also, to provide more information to investors, the periodic disclosures to the stock exchange shall now require disclosure of the extent and nature of security created and maintained.

As against half-yearly certifications on security cover in respect of listed secured debt securities, the amended Listing Agreement provides for submission of such certificates regarding maintenance of 100 per cent asset cover, and the time limit of submission in respect of the last half year has been aligned with the option provided for submission of annual audited results at a later date.

In addition to banks and NBFCs being exempt from submitting such certificates, issuers of government guaranteed bonds shall also be exempt.

In order to enhance the quality of disclosures made to investors, issuers shall be required to furnish a statement of deviations in use of issue proceeds, if any, to the stock exchange on a half yearly basis. Also, the same is required to be published in the newspapers simultaneously with the half-yearly financial results.

On Deposit of 1 per cent of issue proceeds, bourses are to ensure that the interest of investors investing in public issues of debt securities is protected, the issuer shall be required to deposit an amount calculated at 1 per cent of the amount of debt securities offered for subscription to the public. It is refundable or forfeitable in the manner stated in the Rules, Bye-laws and Regulations of the Exchange.

The time-lines for disclosure of financial statements have been aligned with the proposed changes to the Equity Listing Agreement. Accordingly, issuers would now have to publish/ furnish to the Exchange, either audited half yearly financial statements or unaudited half yearly financial statements subject to a limited review within 45 days from the end of the half year.  In case of the last half year, issuers may opt to submit their annual audited results in lieu of the unaudited financial results for the period, within 60 days from the end of the financial year.