Operational guidelines for ‘Security and Covenant Monitoring’ using Distributed Ledger Technology (DLT)

DLT-based asset identification requires unique Asset IDs and duplicate checks; issuers and trustees must record and monitor security data.

The circular mandates use of a DLT platform to record and monitor assets securing non-convertible securities, requiring a system-generated unique Asset ID in a prescribed 12-character format, with issuers entering asset details once and depositories performing duplicate/near-duplicate checks based on common and asset-specific parameters. Issuers and debenture trustees must verify alerts, trustees must annually reconcile assets and remove duplicates, issuers must report events reducing security cover as trigger events immediately, and required credit rating information must be uploaded and validated on the platform.