TaxTMI 
TaxTMI 
Operational Circular for Debenture Trustees
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....For ease of reference, each chapter of this operational circular contains footnotes corresponding to the respective erstwhile circulars. The terms 'Issuer' and 'listed entity' have been used interchangeably in this operational circular. 4. Debenture Trustees are directed to comply with the conditions laid down in this operational circular and it is reiterated that Debenture Trustees shall have necessary systems and infrastructure in place for implementation of this circular. The Board of Directors of the Debenture Trustee shall be responsible for ensuring compliance with these provisions 5. This Circular is issued in exercise of powers conferred under: 5.1 Section 11(1) of Securities and Exchange Board of India Act, 1992; 5.2 Regulation 2A of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 5.3 Regulation 55 of the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021; ('SEBI NCS Regulations') 5.4 Regulation 29 of Securities and Exchange Board of India (Issue and Listing of Municipal Debt Securities) Regulations 2015; 5.5 Regulation 101 (1) of Sec....
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....nbsp; Department of SEBI Name of Intermediary/ Other Entities Type of Intermediary SEBI Registration Number (if any) PAN Amount (INR) Purpose of Payment (including the period for which payment was made e.g. quarterly, annually) Bank name and Account number from which payment is remitted UTR No 2.3. The above information should be emailed to the respective department(s) as well as to the Treasury & Accounts division at [email protected]. 3. Grant of prior approval to Debenture Trustee for change in control [CIR/MIRSD/14/2011 dated August 02, 2011; ] 3.1. Debenture Trustee is required to obtain prior approval of SEBI in case of change in control. With a view to expedite the process of granting prior approval, SEBI has adopted a 'single window clearance at SEBI', for the Debenture Trustees in case of their having multiple registrations with SEBI. 3.2. Therefore, in case a Debenture Trustee holds multiple registrations with SEBI, it shall make only one application addressed to "Chief General Manager, Department of Debt and Hybrid Securities, SEBI" ....
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.... or any parent, brother, sister or child of the person or of the spouse 4.3. Incoming shareholders in the Debenture Trustee, pursuant to transfer of shares from immediate relative/ transmission of shares (immediate relative or not), need to satisfy the fit and proper person criteria stipulated in Schedule II of SEBI (Intermediaries) Regulations, 2008. 5. Transfer of business by SEBI registered intermediaries to other legal entity [SEBI/HO/MIRSD/DOR/CIR/P/2021/46 dated March 26, 2021] SEBI has been receiving registration applications pursuant to transfer of business (SEBI regulated business activity) from one legal entity which is a SEBI registered Intermediary (transferor) to other legal entity (transferee). In this regard, following is clarified: 5.1. The transferee shall obtain fresh registration from SEBI in the same capacity before the transfer of business if it is not registered with SEBI in the same capacity. SEBI shall issue new registration number to transferee different from transferor's registration number in the following scenario: a) "Business is transferred through regulatory process (pursuant to merger/ amalgamation/ corporate restructuring by way....
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.... Trustee - ABC co. Ltd - communication of designated email-id." c) The file shall contain the following details: Name Address Category Registration No. Designated email id Name of compliance officer Annex-IA Application form for surrender of certificate of registration by Debenture Trustee To Securities and Exchange Board of India Sir/Ma'am, Sub: Surrender of Certificate of Registration as Debenture Trustee, Registration No. __. 1. We hereby surrender our certificate of registration as Debenture Trustee. 2. We enclose the original certificate of registration (or indemnity in case the certificate is lost or stolen) for cancellation. 3. We hereby confirm that: a. no complaint/ disciplinary proceeding is pending against us; b. no investigation/ inquiry by SEBI is pending against us with respect to our activities as a Debenture Trustee; c. as on date of application, we have paid all fees; d. we shall continue to be liable for all liabilities/ obligations (including monetary penalties, if any) for violations, if any, of the provi....
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....opies of the relevant agreements/ Memorandum of Understanding, copy of evidence of registration with Sub-registrar, Registrar of Companies, Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI) etc. b) For unencumbered assets, an undertaking that the assets on which charge is proposed to be created are free from any encumbrances. c) For encumbered assets, on which charge is proposed to be created, the following consents along-with their validity as on date of their submission: i. Details of existing charge over the assets along with details of charge holders, value/ amount, copy of evidence of registration with Sub-registrar, Registrar of Companies, CERSAI, Information Utility (IU) registered with Insolvency and Bankruptcy Board of India (IBBI) etc. as applicable; and ii. Consent/ No-objection certificate (NOC) from existing charge holders for further creation of charge on the assets or relevant transaction documents wherein existing charge holders have given conditional consent/permission to the Issuer to create further charge on the assets, along-with terms of such conditional consent/ permission, if any; and iii. ....
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....d enforceable at all times, as affirmed by the issuer. In all other respects, it shall be dealt with as specified above with respect to guarantees. g) In case securities (equity shares, etc.) are being offered as security then a holding statement from the depository participant along with due pledge of such securities in favour of Debenture Trustee in the depository system shall be ensured. h) Details of any other form of security being offered viz. Debt Service Reserve Account, etc. i) Any other information, documents or records required by the Debenture Trustee with regard to creation of security and perfection of security. 2.2. Due diligence by a Debenture Trustee for creation of security 2.2.1. Regulation 15(6) of DT Regulations inter-alia requires a Debenture Trustee, to exercise independent due diligence to ensure that security is free from encumbrances, adequate consent has been taken from existing charge holders, if any, etc. Regulation 15(1)(i) of DT Regulations places obligations on the Debenture Trustee to ensure that the assets of the Issuer are sufficient to discharge the interest and principal amount with respect to debt securities of the Issuer at all ....
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....issions required for creation of further charge on assets is adequately disclosed in Offer Document ('OD')/ Placement Memorandum ('PM'). (b) All disclosures made in the OD/PM with respect to creation of security are in conformity with the clauses of debenture trustee agreement. (c) All covenants proposed to be included in debenture trust deed (including any side letter, accelerated payment clause etc.) are disclosed in OD/PM. 2.2.5. A Debenture Trustee shall maintain records and documents pertaining to due diligence exercised for a period of five years from redemption of the debt securities unless required by law, or on account of any enquiries or proceedings to retain such records. 2.3. Due Diligence Certificate in case of Shelf Prospectus/ Placement Memorandum: 2.3.1. In case security details have not been finalized at the time of filing of a draft shelf prospectus/ placement memorandum by an issuer, then the Debenture Trustee shall undertake due diligence as under: (a) The Debenture Trustee may furnish a due diligence certificate, confirming that it has carried out due diligence for the clauses other than that related to security creation [clauses are specified....
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....format specified in Annex-IIA and update the same into the Security and Covenant Monitoring System operated by a recognised Depository, which the Debenture Trustee shall validate/ confirm on such system as detailed in Chapter III of this circular. 2.6. Creation and registration of charge of security by the Issuer 2.6.1. Before making the application for listing of debt securities, the Issuer shall create charge as specified in the OD/ PM, in favour of the Debenture Trustee and also execute a debenture trust deed [Form SH 12 of Companies (Share Capital and Debentures) Rules, 2014 ] with the Debenture Trustee. 2.6.2. The Stock Exchange shall list the debt securities only upon receipt of a due diligence certificate as per format specified in Annex-IIB from the Debenture Trustee confirming creation of charge and execution of the debenture trust deed. 2.6.3. The charge created by Issuer shall be registered with Sub-registrar, Registrar of Companies, CERSAI, Depository etc., as applicable, within 30 days of creation of such charge. In case the charge is not registered anywhere or is not independently verifiable, then the same shall be considered a breach of covenants/ t....
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....d thereunder and bye-laws of Stock Exchanges and Depository, as applicable. f) The Depository shall assign a new ISIN to the listed debt securities pursuant to submission of documents mentioned above only and shall share the information with respect to change in ISIN of listed debt securities, with the recognized Stock Exchanges. g) It may be noted that none of the cases mentioned in para 2.7.1 would constitute a change in the structure of the listed debt securities, provided there are no other changes to the terms/ nature of issue of the listed debt securities such as maturity date, coupon rate, face value, redemption schedule, nature of the debt securities (secured/ unsecured), etc. Accordingly, the Depository shall not assign a new ISIN in such cases. However, where there is a change in the underlying security, the Debenture Trustee shall ensure compliance with the provisions of Regulation 15(1)(i) of DT Regulations. 2.8. Engagement of Independent professionals by Debenture Trustee: 2.8.1. For the purpose of availing the services of an independent professional for carrying out due diligence and continuous monitoring under the provisions of this operational circu....
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....ted payment clause etc.), offer document/ placement memorandum. f) Issuer has given an undertaking that charge shall be created in favour of debenture trustee as per terms of issue before filing of listing application. We have satisfied ourselves about the ability of the Issuer to service the debt securities. PLACE: DATE: DEBENTURE TRUSTEE TO THE ISSUE WITH HIS STAMP Annex-IIB FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY THE DEBENTURE TRUSTEE AT THE TIME OF FILING OF LISTING APPLICATION BY ISSUER To, Stock Exchange Dear Sir / Madam, SUB.: ISSUE OF ____________________ BY _______________LTD. We, the debenture trustee(s) to the above mentioned forthcoming issue state as follows: 1) We have examined documents pertaining to the creation of charge over assets of Issuer. 2) On the basis of such examination and of the discussions with the Issuer, its directors and other officers, other agencies and of independent verification of the various relevant documents, WE CONFIRM that: (a) The Issuer has created charge over its assets in favour of debenture trustee as per terms of offer document/ placement memorandum and debenture trustee agreemen....
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.... all the communication/ interaction amongst various stakeholders viz. CRAs, Debenture Trustees, Issuers, Depositories etc. and also in the system on account of recording and/or verification and/or viewing of information by the stakeholders. 3.7. Provide functionality in the system to make changes in already recorded information by stakeholders (in case a change is required to be made for rectifying any discrepancy or recording additional information) and verification of same by responsible stakeholder (as applicable) and due logs/trail and prior versions of such changes. 3.8. Be responsible for the effective and smooth functioning of the system and shall develop a mechanism to establish accountability/ responsibility for the rectification of various issues and glitches that may hamper the effective functioning of the system. 3.9. Have in place operational guidelines for the system after consultation with various stakeholders. 4. In line with current market practices, related to issuance of debt securities, the system, as per the nature of the debt securities, shall enable various stakeholders to record information for the following aspects: 4.1. Security creation, se....
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....OC, CERSAI, Information Utility of IBBI or any other independently verifiable source and shall confirm the same on the system and update any subsequent changes, in case of any discrepancy. c) Pursuant to the issuance of due diligence certificate by the Debenture Trustee to the Stock exchange as per Annex-IIB of this circular, the same shall be uploaded on the system by the Issuer. 5.3. Modification in the information recorded on the system: Any change in already recorded information on the system related to charge creation, registration details etc. due to any discrepancy or any modification in the value or details of the security provided on account of provision of additional security by the Issuer or reduction or substitution of existing security provided by the Issuer, shall be made after verification and validation by Debenture Trustee and information regarding requisite documents and permission/ consent obtained shall also be recorded on the system. 5.4. Recording of covenants in the system: a) The Issuer shall enter the covenants of the issuance in the system and upload the debenture trust deed within five working days of signing of debenture trust deed, includ....
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....ll record information pertaining to payment of interest and repayment of principal on the system at the time of creation of ISIN/ temporary ISIN. The issuer shall also record the status of such payment/ repayment within one working day of payment/ redemption due date after taking requisite details from Registrar and Transfer Agent. The format for the same is as specified in Annex-IIIC. b) Once such information is recorded on the system, the Debenture Trustee shall validate the status of such payment/ repayment in the system after receiving the requisite details from the Registrar and Transfer Agent including file prepared for payment of interest and repayment of principal, Bank confirmation etc. Such status shall be validated within two working days on the basis of the documentary evidence submitted by the Issuer and the Registrar and Transfer Agent. 5.9. Non-receipt of information on the system: a) In case of non-receipt of information in the system viz. the Issuer fails to intimate the status of payment of interest or repayment of principal, the Debenture Trustee shall seek status of such payment/ repayment from the Issuer and/ or conduct independent assessment (from ban....
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....ective asset creation as well as tracking, the system will provide an alert to the Issuer and the Debenture Trustee by having appropriate validation/ duplicate checks in the system for identifying possible duplicate entries for assets of an issuer and this validation/ duplication check shall be based on the parameters as per Annex-IIIE. Issuers shall ensure that the entry of the asset is made only once in the system for generation of the unique Asset ID, which shall be verified by the Debenture Trustee. 7. The following assets shall be tracked at portfolio level and no specific parameters for the underlying assets would be captured: 7.1. movable assets viz furniture, equipment, inventory etc. 7.2. current assets viz portfolio of advances/ receivables, etc. 7.3. any other asset of similar nature. 8. On detection of a duplicate asset, an alert shall be generated and sent to the Issuer and Debenture Trustee to cross check and verify the details entered into the system for recording the details of asset. The Issuer and the Debenture Trustee should verify and address the alert before overriding the same. 9. Monitoring/ Trigger events: 9.1. While the Depository shall....
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....city and value of assets. c. Documents related to existing encumbrance on assets/ security offered: Issuer shall record following details in the system and/or submit documents: i. For unencumbered assets, an undertaking that the assets on which charge is proposed to be created are free from any encumbrances. ii. For encumbered assets, on which charge is proposed to be created, the Issuer shall submit documents in system as per para 2.1. (c) of Chapter II of this operational circular and any other document required to be given by the Issuer to the Debenture Trustee. Annex-IIIB Manner of updation of charge creation details on System: 1. Issuer shall enter the following details related to charge created on system as and when applicable: 1.1. Asset details 1.2. Type of Charge Creation 1.3. Charge holder 1.4. Amount 1.5. Date on which charge is created 1.6. Modification date 1.7. Charge Closure date i.e. redemption date. 2. System shall ensure every charge details recorded in the system shall have a unique number. Therefore, an asset with a unique asset ID shall be mapped against multiple charge IDs. 3. After registering the charge ....
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....ate of last Interest Payment • Reason for non-payment/ delay in payment • Change in Frequency of payment (if any) • Date of Change • Details of such change • Change in Record Date Updation by Issue on continuous basis - Redemption payment • Actual Date for Redemption • Amount Redeemed • Outstanding Amount (Rs.) • Reason for non-payment/ delay in payment • Date of previous redemption (part redemption), if applicable • Change in Record Date Annex-IIID Asset ID = System Code + Asset Type + Asset Sub Type + Unique Number + Check Digit System Code 2 characters ('IN' - for all asset types and sub-types) Asset type 2 character Alphanumeric Asset sub-type 2 character Alphanumeric Unique Number 5 character alphanumeric sequential (start with 00001 to 99999. Post full utilization of numbering then prefix will start from A-Z.) Check Digit 1 digit Annex-IIIE 1. Common parameters across asset types: The following is an indicative list of parameters which shall be captured for all categories of ass....
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....regulator of the host country along with name of the regulator. d. Guarantee Amount Chapter IV: Recovery Expenses Fund [SEBI/HO/MIRSD/CRADT/CIR/P/2020/207 dated October 22, 2020 and SEBI/HO/MIRSD/MIRSD_CRADT/CIR/P/2022/67 dated May 19, 2022] In order to enable the Debenture Trustee to take prompt action for enforcement/legal proceedings in case of 'default' in listed debt securities, a 'Recovery Expense Fund' (REF) shall be created which shall be used in the manner as decided in the meeting of the holders of debt securities. 1. Manner of creation and operation of REF 1.1. The issuer proposing to list debt securities shall deposit an amount equal to 0.01% of the issue size subject to maximum of Rs. 25 lakhs per issuer towards REF with the 'Designated Stock Exchange', as identified and disclosed in its Offer Document. 1.2. The REF shall be created and maintained in the following form: a. The issuer shall deposit cash or cash equivalent(s) including Bank Guarantees towards contribution to this fund at the time of making the application for listing of debt securities. b. The Designated Stock Exchange shall invest such cash in the REF in Government Securities or ....
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....rder to ensure independent verification by a Debenture Trustee regarding creation of REF by issuer, Debenture Trustee shall take confirmation from Designated Stock Exchange or any other independent source in writing regarding the creation of REF by the issuer and shall not rely solely upon the communication by the issuer. 4.2. The Stock Exchange shall disclose on their websites, the amount of REFs created by the issuers on a half yearly basis. Such disclosure shall also include the details of the Debenture Trustee for the debt securities. Chapter V: Security Cover Certificate [SEBI/HO/MIRSD/MIRSD_CRADT/CIR/P/2022/67 dated May 19, 2022 ] In terms of regulation 54 read with regulation 56(1)(d) of SEBI LODR Regulations, Issuers are required to disclose security cover to Stock Exchange and Debenture Trustee. The obligations of the Issuer and the Debenture Trustee with respect to preparation and submission of security cover certificate are given as under: 1. Manner of preparation of security cover certificate by the Issuer: 1.1 The Issuer shall be required to prepare the security cover certificate on quarterly basis and the statutory auditor of the Issuer shall certi....
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....nderlying security: a) The book value for security cover shall be certified by the statutory auditor of the third party/ subsidiary/ group/ holding company with respect to third party/ subsidiary/ group/ holding company assets being offered as underlying security. b) In case, security cover comprises exclusive charge on third party/ subsidiary/ group/ holding company assets, the security cover certified by the statutory auditor of the concerned third party/ subsidiary/ group/ holding company shall include details of such assets including the book value of such assets. c) In case, security cover comprises pari-passu charge/ second/ third charge on third party/ subsidiary/ group/ holding company assets, the security cover certified by the statutory auditor of the concerned third party entity shall include the detail of all encumbrances on such assets. 1.9 Further, in order to adequately capture details regarding other debt securities, viz. unsecured debentures, subordinated debt, other debt issuances which fall in the lower priority order in the waterfall mechanism for liquidation/ resolution proceeds, an additional column named "Debt not backed by any assets offered as s....
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....benture Trustee shall ensure that the qualifications/ disclaimer (by whatever name called), does not impair the rights of holders of debt securities in terms of security provided. Further, if the Debenture Trustee is of the opinion that such qualifications/ disclaimer are affecting the rights of holders of debt securities, the Debenture Trustee shall take corrective action in this regard. ============= Document 1 é–© à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Format of Security Cover Certificate Annex-VA Column B Column A Colum n Colum n Ci Dii Colum n Column Eiii Column Gv Fiv Colum n Hvi Column Colum Column K Column L Column M Column N Column O Ivii n J Exclusive Charge Exclusive Pari- Pari- Charge Passu Passu Pari-Passu Charge Charge Charge Assets not offered as Elimination (Total Related to only those items covered by this certificate (amount in C to H) negative ....
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....€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Page 42 of 91 Cover on Market Valueix SB à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Exclusive Security Cover Ratio Pari-Passu Security Cover Ratio i. ii. III. IV. V. vi. This column shall include book value of assets having exclusive charge and outstanding book value of debt for which this certificate is issued. This column shall include book value of assets having exclusive charge and outstanding book value of all corresponding debt other than column C. This column shall include debt for which this certificate is issued having any pari-passu charge - Mention Yes, else No. This column shall include a) book value of assets having pari-passu charge b) outstanding book value of debt for which this certificate is issued and c). other debt sharing pari-....
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....ificate Periodicity Security cover Certificate (in the format as Quarterly basis within 75 days specified in Annex-IIIA to this operational from end of each quarter except circular) A statement of value of pledged securities A statement of value for Debt Service Reserve Account or any other form of security offered Net worth certificate of guarantor in case debt securities are secured by way of personal guarantee) Financials/value of guarantor prepared on basis of audited financial statement etc. of the guarantor(secured by way of corporate guarantee) last quarter when submission is to be made within 90 days. Half yearly basis within 75 days from end of each half-year. Annual basis within 75 days from end of each financial year. Valuation report and title search report for the once in three years within 75 days immovable/movable assets, as applicable. from the end of the financial year. 14 SEBI/HO/MIRSD/CRADT/CIR/P/2020/230 dated November 12, 2020 15 For existing debt securities as on November 12, 2020 vide circular SEBI/HO/MIRSD/CRADT/CIR/P/2020/230, listed entities and debenture trustee(s) were given 120 d....
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....t/ Debenture Trust Deed. d) Independently monitor any breach of covenants from continuous monitoring of any public disclosure on Stock Exchange, company filings, news articles in electronic/ print media or any information available in public domain apart from periodical information/ documents submitted by the issuer. 16 SEBI/HO/MIRSD/MIRSD_CRADT/CIR/P/2022/67 dated May 19, 2022 Page 45 of 91 இ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India e) Furnish a status report on its website and to the Stock Exchange for further dissemination on a quarterly basis. Such status report shall contain the covenants breached in the preceding quarter and the actions taken by the Debenture Trustee for the same as per the format prescribed under Chapter VI of this operational circular. 3. Disclosures by Debenture Trustee 17: 3.1. In order to enhance transparency with respect to the no-objection certificate (NOC)/no-dues certificate/ consent/ permission (by whatever name called....
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....ovenant as to maintenance as a ratio or percentage of .... (state), Not less than/ Not exceeding x, Time Bucket etc. Page 47 of 91 3. Affirmative 4. Affirmative or restrictive 5. Negative 6. Default இ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Security Cover as per terms of Issue Title of Security/asset Credit rating Credit downgrade Purpose/end-use Change in nature and conduct of business Change in management Fund raising/ borrowing/ encumbrance Default of principal or interest or both Security creation default • Covenant as to Ratio or percentage, not less than, third party interest/title, rentals, negative lien, insurance, ROC and CERSAI filing etc. Covenant as to minimum rating (Rating symbol), Standalone basis, consolidated, CE/SO rating, notch downgrade, etc. Change in Key Managerial Personnel (KMP), Auditor, Board of Directors, shareholding, restriction with amount, ....
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....¤¨à¤¿à¤®à¤¯ बोरà¥à¤¡ Securities and Exchange Board of India 2. Disclosure of compensation arrangement with clients by Debenture Trustee on its websites 19 A Debenture Trustee shall disclose the nature of compensation arrangement with its clients on its website, including the minimum fee to be charged (in absolute terms or as a percentage of the issue size) and factors determining the same. 3. Calendar of interest/ redemptions, due and paid, to be displayed on the website of Debenture Trustee for the financial year 3.1. A Debenture Trustee shall display on its website the ISIN wise details of interest/ redemption due to the holders of listed debt securities in respect of all issues during a financial year within five working days of start of financial year. 3.2.A Debenture Trustee shall also update such details for any new issue of debt securities handled during the financial year within five days of closure of the Issue. 3.3. A Debenture Trustee shall also update the status of payment ISIN-wise against such issuers not later than one day from the due date. In case the payment is made with a delay by t....
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....बोरà¥à¤¡ Securities and Exchange Board of India Details of Debenture issues handled by debenture trustee and their status 4. Type Debenture issues at end of last half year ended March / Sep 20.. Secured Unsecured Total Debenture issues accepted during half year ended March / Sep 20... Secured Unsecured Total Debenture issues fully redeemed during half year ended March / Sep 20... Secured Unsecured Total Debenture issues outstanding as Cumulating on last day of half year ended March / Sep 20... Secured Unsecured Total No. Amt. Public No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. No. Amt. issues handled up to the half year ended March/ Sep 20... No. Amt. Rights Privately Placed Listed Total 5. Status of information regarding breach of covenants/terms of the issue, if any action taken by debenture trustee S. No. the breach by the Name of the Listed Entity (ISIN) Covenants / terms of issue (if any ) breached Security to be enforced due to Date of Date of actual....
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....¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India c. Accounts/funds to be maintained in case of Municipal Debt Securities S.No. Name of the Listed Entity Type of Issue (Public/ Privately Placed) Issue Size (in crores) Size/ Value of Fund/account maintained No lien escrow Interest payment account account Sinking fund account Action by taken debenture trustee, if any (in case of shortfall etc.) 8. Status of information regarding any default by listed entity and action taken by Debenture Trustee Issue Secured size Name of Issue the listed Type entity (Public/ (in Unsecured (including Privately crores) ISIN) placed listed) along with 3rd/ ..) debenture enforcement Default of Year Date of interest/ of intimating/ redemption default sending amount (1st/ notice to (Yes/No) 2nd/ the Result of the voting (receipt of consents), if applicable Date of Date of convening enforcement the of security Negative Positive Other meeting (F....
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....rest/ repayment of principal, seek ISIN-wise information from Issuers regarding the status of payment of interest/ repayment of principal on or before the due date. While seeking such information, the Debenture Trustee shall also intimate to CRAS. 3.1.2. If the Issuer confirms the status of such payment/ repayment or where no information is received from the Issuer on or before the due date, the 20 Circular No. CIR/MIRSD/25/2011 dated December 19, 2011; 21 Circular CIR/MIRSD/3/2013 dated March 15, 2013; 22 SEBI/HO/MIRSD/MIRSD3/CIR/P/2017/72 dated June 30, 2017 Page 55 of 91 இ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Debenture Trustee shall accordingly provide ISIN-wise information to the CRAS latest by one day after such due date which shall state the following: a) Information about payment made on or before the due date or; b) Information about delay/ default in payment or; c) No information forthcoming from the Issuer on the payment status. 3.1.3....
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..../CIR/P/2017/72 dated June 30, 2017 Page 56 of 91 இ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India securities. Further, such information shall also be placed on the website of the Debenture Trustee, the issuer and the stock exchanges. It is clarified that such actions shall be taken by the Debenture Trustee promptly and in any case not later than next day of the occurrence of such events. Page 57 of 91 B à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Annex-VIIIA Sharing of information between Debenture Trustees and Credit Rating Agencies 1. Information from Credit Rating Agencies to Debenture Trustees a) Rating assigned/revised for debt securities along with the rationale for the same. b) Press release, outstanding ratings etc. in respect of debt securities. c) Non-cooperation by the issuers ....
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....us Debenture Trustee services provided, Rights and Obligations of Investors and Grievance Redress Mechanism. 1.2. In this regard, all the registered Debenture Trustees shall take necessary steps to bring the Investor Charter, as provided at 'Annex-IXA' to the notice of investors by way of: a) disseminating the Investor Charter on their websites/through e-mail; b) displaying the Investor charter at prominent places in offices etc. 1.3. Trustee Association of India (TAI) shall also disseminate the Investor Charter on its website. 1.4. Additionally, in order to bring about transparency in the Investor Grievance Redress Mechanism, it has been decided that all the registered Debenture Trustees shall disclose on their respective websites, the data on complaints received against them or in respect of debt securities issues dealt by them and redress thereof, latest by seventh of the succeeding month, as per the format enclosed at Annex-IXB to this operational circular. 2. Exclusive e-mail ID to redress of Investor Complaints 25 In order to address the issue of having a direct and quicker forum for enabling investors to register their co....
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.... shall update the ATR along with supporting documents, if any, electronically in SCORES. ATR in physical form need not be sent to SEBI. The proof of dispatch of the reply of the SEBI registered Debenture Trustee to the concerned investor should also be uploaded in SCORES and preserved by the SEBI registered Debenture Trustee, for future reference. 3.5. Action taken by a Debenture Trustee will not be considered as complete if the relevant details/ supporting documents are not uploaded in SCORES and consequently, the complaints will be treated as pending. 3.6. A complaint shall be treated as resolved/ disposed/ closed only when SEBI disposes/ closes the complaint in SCORES. Hence, mere filing of ATR by a Debenture Trustee with respect to a complaint will not mean that the complaint is not pending against them. 26 Circular No. CIR/OIAE/1/2014 dated Dec 18, 2014 Page 60 of 91 Bi à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India 3.7. Failure by a Debenture Trustee to file A....
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....¢ • • Dissemination of rating revision/ payment of interest/ redemption information by disclosing on Trustee's website/ with Credit Rating Agencies/ Stock Exchanges Timely and Effective resolution of investor complaints. Ascertain that the debentures have been converted or redeemed in accordance with the conditions under which they were offered to the investors. Enforcement of security as per terms of issue/ regulatory guidelines. • Appoint a nominee director on the Board of the Issuer in case of event of default. Exercise due diligence to ensure compliance with the provisions of the Companies Act, 2013, the SEBI Regulations and the debenture trust deed by the Issuer. • Page 62 of 91 SBâ‚ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India 3. Guidance pertaining to timelines for various services provided S Type of Activity/ Service No. 1. Timeline (within no. of ....
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....enants or terms of issue and/or event of default: a) send a notice to the investors within 3 days of breach of covenants or terms of issue and/or event of default. b) convene the meeting of investors within 30 days of breach of covenants or terms of issue and/or event of default. c) to enforce security or enter into the Inter Creditor Agreement or as decided in the meeting of investors. 5. Rights and Obligations of Investors Investor Right - Right to a) To inspect debenture trust deed, to obtain copy of debenture trust deed and related documents as per prevailing state stamp laws. b) Receive notice of any change in terms of debt securities including rollover, redemption etc. or of breach of covenants and/or event of default from debenture trustees. c) of compromise or arrangement, to sanction any variation in the rights of the investors and to sanction any compromise or arrangement proposed to be made between the Issuer and investor(s) d) Call for a meeting to be convened by the debenture trustee on requisition in writing signed by investors holding at least 1/10th in value of the debentures for the time being outstanding.....
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....hall be escalated within seven days of receipt of complaint. 6.6. If the investor is not satisfied with the redress/resolution of the complaint by the debenture trustee, or the issuer, investor can lodge the complaint on the SEBI Complaints Redress System - SCORES (https://scores.gov.in/) or harness the dispute resolution mechanism specified by SEBI from time to time with respect to the Issuer. Page 65 of 91 SBâ‚ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Annex-IXB Data of complaints against Debenture Trustee to be displayed on its website- Format for disclosing of data of complaints on its website: 1. Data for the month ending S. Received from Carried forward Received during Total Pending ved* Resol Pending at the end of the Average Resoluti No. from the # month** on time^ previous month (in days) month 1 2 Directly from Invest....
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....v.in followed by hard copy to the concerned Department/Division of Securities and Exchange Board of India, Plot No. C4-A, 'G' Block, Bandra Kurla Complex, Mumbai -400 051 Important: Please note that SCORES has the provision for updating SEBI registered Debenture Trustee's details by the intermediary itself. Any field (except the e-mail id which is permanent) such as registered office address, name/details of the compliance officer, telephone numbers, etc. should be changed by the SEBI registered Debenture Trustee immediately when warranted. Page 68 of 91 B à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय ats Securities and Exchange Board of India Chapter X: Breach of Covenants, Default and Remedies 28 1. Event of default 1.1. Regulation 51 read with the Explanation to Clause A (11) in Part B of Schedule III of SEBI LODR Regulations defines 'default' as non-payment of interest or principal amount in full on the pre-agreed date which shall be recognized at the first instance of delay in the servicing of any interest or principal on debt. ....
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.... विनिमय बोरà¥à¤¡ Securities and Exchange Board of India 2.3.1. The Debenture Trustee shall send a notice to the investors within three days of the event of default by registered post/ acknowledgement due or speed post/ acknowledgement due or courier or hand delivery with proof of delivery as also through email as a text or as an attachment to email with a notification including a read receipt, and proof of dispatch of such notice or email, shall be maintained. 2.3.2. The notice shall contain the following: a) A provision for negative consent for proceeding with the enforcement of security; and b) A provision for positive consent for signing the ICA (in case the Debenture Trustee is approached by other lenders for signing/ joining the ICA); and c) the time period within which the consent needs to be provided, viz. consent to be given within 15 days from the date of notice; and d) the date of meeting to be convened. e) A disclosure to the effect that in case requisite consents are not received either for enforcement of security or for signing ICA, then the Debenture Trustee s....
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....ICA by Debenture Trustee on behalf of holders of listed debt securities 3.1. The Debenture Trustee(s) may sign the ICA and consider the resolution plan on behalf of the holders of listed debt securities upon compliance with the following conditions: a) The signing of the ICA and agreeing to the resolution plan is in the interest of holders of listed debt securities and in compliance with the Companies Act, 2013 and the rules made thereunder, the Securities Contracts (Regulations) Act, 1956 and the Securities and Exchange Board of India Act, 1992 and the rules, regulations and circulars issued thereunder from time to time. b) If the resolution plan imposes conditions on the Debenture Trustee that are not in accordance with the provisions of Companies Act, 2013 and the rules made thereunder, the Securities Contracts (Regulations) Act, 1956 and the Securities and Exchange Board of India Act, 1992 and the rules, regulations and circulars issued thereunder from time to time, then the Debenture Trustee shall be free to exit the ICA altogether with the same rights as if it had never signed the ICA. Under these circumstances, the resolution p....
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....he NCS operational circular. The obligations of Debenture Trustee arising out of the same has been outlined below: 1. Role of Debenture Trustee: 1.1. In case the Issuer fails to intimate the status of payment of the debt securities within stipulated timelines, then Debenture Trustee shall seek status of payment from the issuer and/ or conduct independent assessment (from banks, investors, rating agencies, etc.) to determine the same. Based on such assessment, Debenture Trustee shall intimate Stock Exchange and Depositories the status of payment of debt securities within nine working days of the maturity/ redemption date. 1.2. In case intimation of the status of payment of debt securities is not received by Stock Exchanges and Depositories within stipulated timeline, transactions in such debt securities shall continue to be restricted and such restrictions shall continue until any further intimation is received from Issuer/ Debenture Trustee regarding the status of payment of such debt securities. 2. Continuous assessment of default status: 2.1. In case the Issuer fails to intimate the updated status of payment of the concerned debt....
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....ee(s) including type of activity, description of activity etc. Risk-Based Supervision report Periodicity Format Annex-XIIIA basis Half-yearly within 75 days of the end of each half-year 2. The half-yearly compliance report shall be reviewed by the Board of Directors of the Debenture Trustee prior to the submission to SEBI. 31 SEBI/HO/MIRSD/MIRSD_CRADT/CIR/P/2022/67 dated May 19, 2022 and CIR/MIRSD/10/2011 dated June 20, 2011; Page 75 of 91 & à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Annex-XIIIA COMPLIANCE CERTIFICATE FOR THE HALF YEAR ENDED SEPTEMBER / MARCH 20.. a) No conflict of interests with other activities The activities other than debenture trusteeship performed by Debenture Trustee are not in conflict with Debenture Trustee activities and appropriate systems and policies have been put in place to protect the interests of debenture holders. b) Change in status or constitution Reporting of changes in status or constitution' of D....
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....ations, 2021, Circulars issued by SEBI and any other laws applicable from time to time, other than the deficiencies and non-compliances reported by us at Section(e) above. Name of Compliance Officer Email ID Page 77 of 91 & à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Chapter XIV: Guidelines on Outsourcing of Activities by Debenture Trustee³2 1. DT Regulations requires Debenture Trustees to render high standards of service and exercise due diligence and ensure proper care in its operations. It has been observed that often intermediaries resort to outsourcing with a view to reduce costs, and at times, for strategic reasons. 2. Outsourcing may be defined as the use of one or more than one third party – either within or outside the group - by a registered intermediary to perform the activities associated with services which the intermediary offers. 3. The principles for outsourcing to be followed by Debenture Trustee are specified at Annex-XIVA. 4.....
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....rehensive outsourcing risk management programme to address the outsourced activities and the relationship with the third party. 2.1 A Debenture Trustee shall make an assessment of outsourcing risk which depends on several factors, including the scope and materiality of the outsourced activity, etc. The factors that could help in considering materiality in a risk management programme include- a) The impact of failure of a third party to adequately perform the activity on the financial, reputational and operational performance of the Debenture Trustee and on the investors / clients; b) Ability of the Debenture Trustee to cope up with the work, in case of non- performance or failure by a third party by having suitable back-up arrangements; c) Regulatory status of the third party, including its fitness and probity status; Page 79 of 91 3. இ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India d) Situations involving conflict of interest between the Debenture Trust....
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.... 3.3 The facilities / premises / data that are involved in carrying out the outsourced activity by the service provider shall be deemed to be those of the registered Page 80 of 91 4. 5. SBâ‚ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Debenture Trustee. The Debenture Trustee itself and Regulator or the persons authorized by it shall have the right to access the same at any point of time. 3.4 Outsourcing arrangements shall not impair the ability of SEBI/ SRO or auditors to exercise its regulatory responsibilities such as supervision/inspection of the Debenture Trustee. The Debenture Trustee shall conduct appropriate due diligence in selecting the third party and in monitoring of its performance. 4.1 It is important that the Debenture Trustee exercises due care, skill, and diligence in the selection of the third party to ensure that the third party has the ability and capacity to undertake the provision of the service effectively. 4.2 The due diligence unde....
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....over the outsourcing and the right to intervene with appropriate measures to meet legal and regulatory obligations; e) includes, where necessary, conditions of sub-contracting by the third-party, i.e. the contract shall enable Debenture Trustee to maintain a similar control over the risks when a third party outsources to further third parties as in the original direct outsourcing; f) has unambiguous confidentiality clauses to ensure protection of proprietary and customer data during the tenure of the contract and also after the expiry of the contract; g) specifies the responsibilities of the third party with respect to the IT security and contingency plans, insurance cover, business continuity and disaster recovery plans, force majeure clause, etc.; h) provides for preservation of the documents and data by third party; i) provides for the mechanisms to resolve disputes arising from implementation of the outsourcing contract; j) provides for termination of the contract, termination rights, transfer of information and exit strategies; k) addresses additional issues arising from country risks and potential obstacles in exerci....
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....f the critical security procedures and systems and review of the backup facilities shall be undertaken by the Debenture Trustee to confirm the adequacy of the third party's systems. The Debenture Trustee shall take appropriate steps to require that third parties protect confidential information of both the Debenture Trustee and its customers from intentional or inadvertent disclosure to unauthorized persons. 7.1 A Debenture Trustee that engages in outsourcing is expected to take appropriate steps to protect its proprietary and confidential customer information and ensure that it is not misused or misappropriated. 7.2 The Debenture Trustee shall prevail upon the third party to ensure that the employees of the third party have limited access to the data handled and only on a "need to know" basis and the third party shall have adequate checks and balances to ensure the same. 7.3 In cases where the third party is providing similar services to multiple entities, the Debenture Trustee shall ensure that adequate care is taken by the third party to build safeguards for data security and confidentiality. Potential risks posed where the outs....
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....be restricted under supervision or access should not be allowed. 3.4. Logs for any usage of such Blogs/ Chat forums/ Messenger sites (called by any nomenclature) shall be treated as records and the same should be maintained as specified by the respective Regulations which govern the concerned Debenture Trustee. 3.5. Employees should be directed that any market related news received by them either in their official mail/ personal mail/ blog or in any other manner, should be forwarded only after the same has been seen and approved by the concerned SEBI registered Debenture Trustee's Compliance Officer. If an employee fails to do so, he/she shall be deemed to have violated the various provisions contained in SEBI Act/ Rules/Regulations etc. and shall be liable for action. The Compliance Officer shall also be held liable for breach of duty in this regard. 33 CIR/ISD/1/2011 dated March 23, 2011 and CIR/ISD/2/2011 dated March 24, 2011 Page 85 of 91 GBâ‚ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Se....
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....ased services; 4.6. endeavour to reduce opportunities for conflict through prescriptive measures such as through information barriers to block or hinder the flow of information from one department/ unit to another, etc.; 34 SEBI Circular No. CIR/MIRSD/5/2013 dated August 27, 2013; Page 86 of 91 இ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India 4.7. place appropriate restrictions on transactions in securities while handling a mandate of issuer or client in respect of such security so as to avoid any conflict; 4.8. not deal in securities while in possession of material non - published information 4.9. not to communicate the material non-published information while dealing in securities on behalf of others 4.10. not in any way contribute to manipulate the demand for or supply of securities in the market or to influence prices of securities; 4.11. not have an incentive structure that encourages sale of products not suiting the risk profile of their clients; 4.12....
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.... NEFT NOC OD PAN PM PPM RBI REF ROC RTGS SCORES National Electronic Funds Transfer No Objection Certificate Offer Document Permanent Account Number Placement Memorandum Preliminary Placement Memorandum Reserve Bank of India Recovery Expenses Fund Registrar of Companies Real-Time Gross Settlement SEBI Complaints Redress System Page 88 of 91 SCRA SEBI SRO ΤΑΙ UDIN UTR GBâ‚ à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Securities Contracts (Regulation) Act, 1956 Securities and Exchange Board Self-Regulatory Organisation Trustee Association of India Unique Document Identification Number Unique Transaction Reference of India Page 89 of 91 SI. No. & à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Part A - ....
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....urity creation and initial due diligence Investor Charter Clarification to SEBI circular dated August 04, 2022 on enhanced guidelines for debenture trustees and listed issuer companies on security creation and initial due diligence Page 90 of 91 & à¤à¤¾à¤°à¤¤à¥€à¤¯ पà¥à¤°à¤¤à¤¿à¤à¥‚ति और विनिमय बोरà¥à¤¡ Securities and Exchange Board of India Part B - List of circulars wherein applicability to Debenture Trustees only have been rescinded Exclusive e-mail ID for redress of Investor Complaints Designated e-mail ID for regulatory communication with SEBI SI. Reference Number of Date Name of the Circular No. Circular SEBI/MIRSD/DR- 1. 2/SRP/Cir - 2/2005 January 04, 2005 Renewal of Certificate of Registration 2. MIRSD/DPS III//Cir-01/07 January 22, 2007 3. MIRSD/ DPSIII/ Cir-21/08 July 07, 2008 4. Cir/ ISD/1/2011 March 23, 2011 5. Cir/ISD/2/2011 6. CIR/MIRSD/14/2011 7. CIR/MIRSD/13/2011 March 24, 2011 August 02, 2011 August 02, 20....