See Yes -> Yes, ACS

Friday, August 1, 2008

[SEBI-ASBA] now Block your Share Application money in your Account itself, till allotment

ASBA - Applications Supported by Blocked Amount

Yes, this is a way to subscribe for Shares through Book Building, which is in addition to the existing way of subscription. It helps to block the application money in your very own Bank Account. Your normal Bank Account itself will serve the purpose. No special request to be given in this regard, provided your bank is an SCSB.

The banks with ASBA facility are called "Self Certified Syndicate Bank" (SCSB), the list of which is maintained by SEBI. Check out whether your bank is there in the list from www.sebi.gov.in

Ask yourself, Are you a Retail Investor who is DIRECTLY bidding @ Cut Off in a Book Built issue and has no plans to change your Bid. In Book Building, three type of Prices to be known,

1. Floor Price - the lowest price fixed in the issue;

2. Cap Price - the highest price fixed in the issue;

3. Cut Off Price - the Final Price, which is determined by the Company & Merchant Banker in consultation with Stock Exchange.

Do read the detailed Guidelines now.

Saturday, July 26, 2008

Wealth Tax planning ideas for CS Final & professionals

Manoj Singh Bisht on Taxing

Taxing, no more TAXING, yes its interesting with us. Lets start with the most interesting Tax, as its on your wealth. Relax, we are giving you the way out, as usual. Enjoy taxin...

These ideas will help for CS Final friends & all other professionals for their preparations & practice.

TAX PLANNING MEASURES IN RELATION TO WEALTH TAX

Tax Planning is a crucial work to be done, in case of Wealth tax u should keep the following points in your mind:

Companies should not invest in unproductive taxable assets like jewellery, motor cars etc. If the assessee has extra funds for investing in assets then use those funds only for investing in non-taxable funds.
Avoid the transactions which attracts the inclusion of deemed assets in the Net Wealth.
An individual and HUF should not keep cash in excess of Rs. 50,000. Any excess should be kept in a Bank.
assesses other than individuals and HUF should not keep cash in excess of what is shown in their books of account , this will help in avoiding the inclusion of cash in assets for computation of Net Wealth.
The exemptions under section 5 should be availed of.
Always use borrowed funds for investing in taxable assets since there is a deduction available for borrowed debts under the Act, and thus use the owned funds for investment in non-taxable assets.

Do comment your views for betterment & to make it more interestin...

Friday, July 25, 2008

FTP Customs Update [Customs Circular No.12 dated 24th July 2008]

Thanks Mr. Anantha Krishna from CS Mysore

FTP Amendment Summary

Changes/amendments in the EOU/EHTP/STP and Gems and Jewellery Export Promotion Schemes-
Net Foreign Exchange Earnings (NFE)
Rationalization of calculation of NFE with rate of depreciation allowed on the capital goods
Clearance or debonding of capital goods in the event of non achievement of positive NFE
Exit from EOU scheme to EPCG scheme
Exit from EOU scheme to Advance Authorization Scheme
Recovery of duty in event of non fulfillment of export obligation in the block period of 5 years
Accountal of inputs in accordance with Standard Inputs-Output Norms (SION)
Flexibility for DTA sale for the units manufacturing and exporting multiple products
Payment of duty on DTA clearances on monthly basis.
Anti dumping duty foregone to be paid by the units on DTA clearances
New optional scheme of payment of excise duty only on DTA clearances for EOUs in textile/granite sector
Supply of goods from DTA under benefit of deemed export are to be treated as imported goods
Supplies of accessories like tags, labels, printed bags, stickers, belts, buttons or hangers to DTA unit for export by EOUs
Goods procured on High Sea Sale basis in Indian rupee to be counted towards NFE obligation
Setting up service unit under EOU/STP/EHTP/BTP scheme
Exemption for the goods required for production of services within the unit
Duty free re-import of goods by EOU/STP/EHTP/BTP unit from exhibition
Limit increased for duty free procurement and export of spares/components
Direct supply of goods to buyer from sub-contractor abroad
Sale and lease back of capital goods by EOU/EHTP/BTP/STP unit scheme
Replacement of imported or indigenously procured goods
Time bound disposal of application for re-export of goods
Change of location of an EOU/STP/EHTP/BTP unit
Parameter for 'unblemished track record' to be observed for EOU/STP/EHTP/BTP unit
GEMS & JEWELLERY EXPORT PROMOTION SCHEME
Replenishment Authorization for import of Consumables.
Re-import of plain/studded precious metal jewellery
Monitoring the foreign exchange realization/remittance in respect of export made out of the duty free gold/silver/platinum
Time Period for re-import of unsold stock of branded jewellery
Export on consignment basis
Export and re-import of cut and polished diamonds for certification and grading
Export by Post

Find details in Customs Circular No.12 dated 24th July 2008

PUBLIC NOTICE No.53 /(RE-2008) 2004-09

Dated: 23rd July 2008

In exercise of powers conferred under paragraph 2.4 of the Foreign Trade Policy 2004-09, Director General of Foreign Trade hereby makes the following amendments in the Handbook of Procedures (Vol. I):

1. Second sentence of paragraph 6.10.1 shall be substituted as under:-

"NFE earnings shall be calculated cumulatively in the block period as per para 6.5 of FTP, according to the formula given below."

2. In Appendix 14-I-A, entry against column XVI may be substituted as under: .

"Net Foreign Exchange Earning

Average NFE on FOB value of exports

in block period, as per para 6.5 of FTP"

3 In Appendix 14-I-E para (ii) shall be amended to read as under:

"The unit would be required to achieve positive NFE as prescribed in the EOU scheme for the block period as per para 6.5 of FTP, failing which it would be liable for penal action."

4. In Appendix 14-I-F, clause 1 of the agreement shall be amended to read as:-

"The unit shall achieve positive NFE as per para 6.5 of FTP."

5. In Appendix 14-I-G-

(a) Para 3(ii) and (iii) shall be substituted as under :

"(ii) For failure to achieve positive NFE, after completion of one year from the date of commencement of production, a cautionary letter may be issued; at the end of 3rd or subsequent year, Show cause notice will be issued if positive NFE is not achieved; after completion of block period as per para 6.5 of FTP, Development Commissioner would initiate penal action under the FT(D&R)Act, 1992. Final decision may be taken as far as possible within six months and positively within one year."

(b) para 3(iv) shall be renumbered as 3(iii).

6. In Appendix 14-I-H,-

a) in para I (h), in the second sentence, the words "within a block of 5 years"shall be substituted by the words "within the block period as per para 6.5 of FTP"

b) In Annexure A, and the Calculation Chart to be certified by Chartered Accountant, the words "last five years " wherever they appear, shall be substituted by the words " block period as per para 6.5 of FTP"

This issues in Public interest.

Sd/-
(R.S. GUJRAL)
DIRECTOR GENERAL OF FOREIGN TRADE
EX-OFFICIO ADDITIONAL SECRETARY TO THE GOVT OF INDIA

(Issued from file No F. No. 01/92/180/ 45 /AM09/PC-VI )

With Regards,
Anantha Krishna T.

Wipro Technologies
D Block, III Floor, 'A' Wing, Doddakannelli, Sarjapur Road, Bangalore 560 035
Ph: 91-80-39877000 ; Dir 25056758; Ext. 6758,
Email: anantha.krishna@wipro.com Website: www.wipro.com

Mobile : +919980557170

Wednesday, July 23, 2008

CS Exam Results Company Secretary (ICSI)

Yes,

Even CS results started coming earlier as LEARN LABZ has arrived. Yes, still remember the days when time starts ticking but refuses to surpass the 5 PM on either 25th August or 25th February.

Now, you are relaxed by 5 hours (just think, its 5 hours), really a very big reason to cherish, nourish or whatsoever. I know friends, how much turmoil inside you BUT once you cross the Well, you will also start giving lectures like me. Best thing is, you have to wait 5 hours lesser now.

Trying my level best to make you enter your next level in CS exams, the most exciting and very interesting way. Do have a look @ our New Idea of viewing Law in http://csexecutiveprogram.blogspot.com/

Yes, we have ventured into CS and for sure, we will win!!!

Come on, its everything within us, Pass / Fail is what ICSI declares, but ultimately the Real Understanding is one & only ourselves.

Wait for excitements, as its LIFE. Life is a "XXX"; yesterday is an Xperience, Today is Xperiment and tomorrow is Xpectation. But in RESULTS, you have a very limited scope, is that by which you can only EXPECT it on 25th August 2008 by 12 noon @ http://www.icsi.edu/ (that too @ site's intention).

Again, just remember, RESULTS are PAST TENSE though its Expected in FUTURE.

Keep Experimenting...

Monday, July 14, 2008

[FEMA-ECB] No Objection (NoC) from Category I Authorised Dealer for Creation of Charge or Issue of Guarantee, though Borrower has the Choice of Security to be issued

Amendments to the ECB guidelines VIDE RBI/2008-09/92 A. P. (DIR Series) Circular No. 01 dated 11^th July 2008, which shall come into force with immediate effect, subject to review from time to time.

Under the extant ECB guidelines, the choice of security to be provided to the overseas lender / supplier for securing ECB is left to the borrower. However, creation of charge over immoveable assets and financial securities, such as shares, in favour of the overseas lender is subject to Regulation 8 of Notification No. FEMA 21/RB-2000 dated May 3, 2000 and Regulation 3 of Notification No. FEMA 20/RB-2000 dated May 3, 2000, respectively, as amended from time to time.

Now, it is resolved to get "No Objection Certificate" [NoC] from Category - I Authorised Dealer for

(a) (a) Creation of Charge on Immovable Assets

(b) Creation of Charge over Financial Securities

(c) Issue of Corporate or Personal Guarantee

AD Category – I banks may invariably specify that the 'no objection' is issued from the foreign exchange angle under the provisions of FEMA, 1999 and should not be construed as an approval by any other statutory authority or Government under any other laws / regulations. If further approval or permission is required from any other regulatory / statutory authority or Government under the relevant laws / regulations, the applicant should take the approval of the authority concerned before undertaking the transaction. Further, the 'no objection' should not be construed as regularizing or validating any irregularities, contravention or other lapses, if any, under the provisions of FEMA or any other laws or regulations.

Hence, following steps to be considered:

Step 1: AD Category - I banks may ensure and satisfy themselves that

(i) the underlying ECB is strictly in COMPLIANCE with the extant ECB guidelines;

(ii) there exists a security clause in the Loan Agreement REQUIRING the borrower to create charge on immovable assets / financial securities / furnish corporate or personal guarantee;

(iii) the loan agreement has been SIGNED by both the lender and the borrower, and

(iv) the borrower has obtained Loan Registration Number (LRN) from the Reserve Bank.

Step 2: In case of, Creation of Charge on Immovable Assets

(i) 'No objection' shall be granted only to a RESIDENT ECB borrower.

(ii) The period of such charge on immovable assets has to be CO-TERMINUS with the maturity of the underlying ECB. [Period of Charge = Maturity of such ECB]

(iii) Such 'no objection' should NOT be construed as a PERMISSION to acquire immovable asset (property) in India, by the overseas lender / security trustee.

(iv) In the event of enforcement / invocation of the charge, the immovable asset (property) will have to be SOLD only to a person resident in India [PRII] and the sale proceeds shall be REPATRIATED to liquidate the outstanding ECB.

Step 3: In case of, Creation of Charge over Financial Securities [Pledge of Shares, etc…]

(i) The period of such pledge shall be CO-TERMINUS with the maturity of the underlying ECB. [Period of Charge = Maturity of such ECB]

(ii) In case of INVOCATION of pledge, transfer shall be in accordance with the extant FDI policy.

(iii) A CERTIFICATE from the Statutory Auditor of the company that the ECB proceeds have been / will be utilized for the permitted end-use/s.

Step 4: In case of, Issue of Corporate or Personal Guarantee

i) BOARD RESOLUTION for issue of corporate guarantee from the company issuing such guarantees, specifying names of the officials authorised to execute such guarantees on behalf of the company or in individual capacity.

ii) Specific REQUESTS from individuals to issue personal guarantee indicating DETAILS of the ECB.

iii) Ensuring that the period of such corporate or personal guarantee is CO-TERMINUS with the maturity of the underlying ECB. [Period of Guarantee = Maturity of such ECB]

Step 5: AD Category - I banks to give 'NoC', on completing the above formalities

AD Category - I banks to CONVEY 'no objection' under the Foreign Exchange Management Act (FEMA), 1999 for creation of charge on immovable assets, financial securities and issue of corporate or personal guarantees in favour of overseas lender / security trustee, to secure the ECB to be raised by the borrower.

Friday, July 11, 2008

[Learn Labz] Company Secretary Executive Program Full Day session [27.7.2008] on Securities Law @ Chennai

Yes, ------------------INVITING you ALL------------------

The Research has begun.....to increase the SUPPLY of Company Secretaries from Chennai.

Learn Labz has Arrived ! Forget your Study ISSUES, we are here to experiment & find SOLUTIONS for you. Now, the first Introductory Brainstorming Labz on Module II of CS Executive Program, Paper 6: "Securities Law & Compliances". Yes, in the Labz way of learning. Enjoy & relish with us for the Whole Day.

Check out the Knowledge Revolution from Chennai with Eminent Specialists & Technicians on every topic of Securities Law. Feel the pulse.

The Learning sessions are divided as follows: [on 27.7.2008]

Learn Labz Session	Timing	Topic of Research
Registration	0800 AM to 0830 AM	Registration & Interaction
Issue of the Day	0830 AM to 0930 AM	Discussion on "Securities Law"as a part of CS Executive Program
Labz I	0930 AM to 1130 AM	SEBI, SCRA, Stock Exchanges, Credit Rating & Depositories
Labz II	1130 AM to 0130 PM	DIP Guidelines, including ESOP, Bonus, ADR, IDR & Others
Labz III	0215 PM to 0415 PM	Intermediaries, Instruments, Mutual Fund, CIS, VCF, Money & Debt Market
Labz IV	0415 PM to 0615 PM	Listing Agreement, Buy Back & Investor Protection

You can submit your Registration Form now.

Details in http://csexecutiveprogram.blogspot.com/

Mail in csexecutiveprogram@gmail.com

For Learn Labz....experimenting with learning

Wednesday, July 2, 2008

RBI Master Circulars List 2008

[FEMA] Manufacturing / Educational - Registered Trust / Society - ODI in same sector in a JV / WoS with PRBI approval

Criteria for Overseas Investment by Registered Trust / Society

Registered Trusts and Societies engaged in manufacturing / educational sector & satisfying the below mentioned Eligibility Criteria, to make investment in the SAME sector(s) in a Joint Venture or Wholly Owned Subsidiary [JV / WoS] OUTSIDE India, with the PRIOR approval of the Reserve Bank (RBI), by submitting the application/s in Form ODI-Part I, through their AD Category - I bank/s.

Eligibility Criteria - Trust / Society

i) The Trust / Society should be REGISTERED under the Indian Trust Act, 1882 / Societies Registration Act, 1860.
ii) The TRUST DEED permits the proposed investment overseas. In case of Society, the Memorandum of Association and rules and regulations PERMIT the Society to make the proposed investment which should also be APPROVED by the governing body / council or a managing / executive committee.
iii) The proposed investment should be APPROVED by the TRUSTEE/s.
iii) The Authorised Dealer bank is satisfied that the Trust is KYC (Know Your Customer) COMPLIANT and is engaged in a bonafide activity.
iv) The Trust / Society has been in EXISTENCE at least for a period of THREE years.
v) The Trust / Society has NOT come under the adverse notice of any Regulatory / Enforcement agency like the Directorate of Enforcement, CBI etc.

In ADDITION to the registration, the activities which require SPECIAL LICENSE / PERMISSION either from the Ministry of Home Affairs, Government of India or from the relevant local authority, as the case may be, the Authorised Dealer Category – I bank should ensure that such special license / permission has been obtained by the applicant.

Details in http://rbidocs.rbi.org.in/rdocs/notification/PDFs/85248.pdf

[Companies Act]e-Form 8 WITHIN 30 days of Creation / Modification of Charge; on Sufficient cause & Additional fee WITHIN 60 days; Beyond 60 days, apply to Company Law Board (CLB)

The procedure for seeking condonation of delay in terms of Section 141 of the Companies Act, 1956 as it stood prior to 27-10-2007 would come into force from 6th July 2008.

The government has withdrawn earlier circular allowing companies to file Form 8 within 300 days without filing petition with CLB by a General Circular dt. 1st July 2008.

Now, earlier limit of 30 days (and 60 days with late fee) will apply to all form 8 to be uploaded from 6.7.2008 onwards.

Section 134 / 135 of the Companies Act, 1956, deals with the Creation / Modification of Charge. The provisions for Creation / Modification of Charge is SAME. In both the cases, e-Form 8 to be filed WITHIN 30 days of such Creation / Modification. Such period of 30 days can be EXTENDED to another 30 days, on showing SUFFICIENT CAUSE & paying ADDITIONAL FEES to RoC (Registrar of Companies). Any further delay, i.e, delay beyond a period of 30+30 = 60 days, can be CONDONED by CLB (Company Law Board) only as per Section 141 of the Act. Further, such Condonation of Delay SHALL NOT PREJUDICE any rights acquired in respect of the property concerned, BEFORE the Charge is ACTUALLY REGISTERED. Hence,
1. Creation / Modification of Charge = File e-Form 8 WITHIN 30 days of Creation / Modification with Normal Filing Fees;
2. Creation / Modification of Charge = 31 to 60 days of Creation / Modification, show Sufficient Cause + File e-Form 8 WITHIN 60 days of Creation / Modification WITH Additional Filing Fees;
3. Creation / Modification of Charge [>] 60 days of Creation / Modification, apply to Company Law Board (CLB) to CONDONE the delay.

This is the situation which WAS prevailing till 27.10.2007 & WILL prevail from 6.7.2008. The situation during the intervening period was, Amendment - Companies Act - Extention of 300 Days for registeration of Creation / Statisfaction of Charge U/s 125/138

Forget all those, as of now, just remember 30 days + 30 days + CLB & have a look @ http://www.mca.gov.in/MinistryWebsite/dca/latestnews/General_Circular_1st_Jul_2008.pdf

Friday, June 20, 2008

as amended SCRA enables, SEBI (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 from 26 may 2008

The amendment to Securities Contracts (Regulation) Act, 1956 (SCRA) enabled SEBI to provide for disclosure based regulation for public issue of or listing of securitized debt instruments on the recognized stock exchanges with a view to develop market for securitized debt instruments. Accordingly, SEBI has notified SEBI (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 on May 26, 2008 taking into account the market needs, cost of the transactions, competition policy, the professional expertise of credit rating agencies, disclosures and obligations of the parties involved in the transaction and the interest of investors in such instruments. Salient features of the regulations are as follows : -

(a)The special purpose distinct entity i.e. issuer shall be in the form of a trust, the trustees thereof will require registration from SEBI. The registration granted to a trustee shall be permanent subject to compliance with the provisions with the SCRR and the regulations and payment of appropriate fees.

(b) If a debenture trustee registered with SEBI or a securitization company or a asset reconstruction company registered with Reserve Bank of India or National Housing Bank or the NABARD is the trustee of the issuer no registration from SEBI to act as such shall be required.

(c) The securitized debt instruments issued to public or listed on recognized stock exchange shall acknowledge the beneficial interest of the investors in underlying debt or receivables assigned to the issuer. The regulations provide flexibility in terms of pay through / pass through structures and do not restrict any particular mode.

(d) The assignment of assets to the issuer shall be a true sale. The debt or receivables assigned to the issuer should be expected to generate identifiable cash flows for the purpose of servicing the instrument and the originator should have valid enforceable interests in the assets and in cash flow of assets prior to securitization.

(e) The issuer shall be a bankruptcy remote from the originator. Originator shall be an independent entity from the issuer and its trustees and the originator and its associates shall not exercise any control over the issuer. However, the originator may be appointed as a servicer. The issuer may appoint any other person as servicer in respect of any its schemes to co-ordinate with the obligors, manage the said pool and collection therefrom, administer the cash flows of asset pool, distribution to investors and reinvestments. The issuer shall not acquire any debt or receivables from any originator who is part of the same group or which is under the same management as the trustee. Regulations require strict segregation of assets of each scheme.

(f). The issuer may offer securitised debt instruments to public for subscription through an offer document containing disclosures of all relevant material facts including financials of the issuer, originator, quality of the asset pool, disclosure of various kinds of risks, credit ratings including unaccepted ratings, arrangements made for credit enhancement, liquidity facilities availed, underwriting of the issue etc. apart from the routine disclosures relating to issue, offer period, application, etc.

(g)Rating from atleast two credit rating agencies is mandatory and all ratings including unaccepted ratings shall be disclosed in the offer documents. The rating rationale should include reference to the quality of the said pool and strengthen of cash flows, originator profile, payment structure, risks and concerns for investors, etc.

(h) The instrument shall be in dematerialized form.

(i)The draft offer document shall be filed with SEBI atleast 15 days before opening of the issue.

(j) In case of public issuances listing will be mandatory. The instruments issued on private placement basis may also be listed subject to the compliance of simplified provisions of the regulations. The securitised debt instruments issued to the public or listed on a recognized stock exchange in accordance with these regulations shall be freely transferable.

(k). It has been proposed to introduce simplified and relaxed listing agreement. Listing of private placement is also permitted subject to the compliance of simplified provisions of the listing agreement and the regulations. The simplified listing agreement is under preparation.

Please find attached the full text of the SEBI (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 <http://www.sebi.gov.in/acts/sdireg.pdf> .

Source: PR No.124/2008 dated 19th June 2008

Thanks & Regards

Alagar
Investment Banking
Karvy Investor Services Limited
Chennai
Moble: 919884731993/ 919790906827

SEBI (Intermediaries) Regulations, 2008 from 26th May 2008 & repealed SEBI (Criteria for Fit and Proper Persons) Regulations, 2004 and SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002

SEBI has undertaken redrafting project to consolidate the common requirements which apply to all intermediaries in so far as the common requirements are concerned. Given the fact that many requirements and obligations of most intermediaries are common, SEBI has notified SEBI (Intermediaries) Regulations, 2008 on May 26, 2008. The salient features of the Regulations are as under : -

(a) The Regulations put in place a comprehensive regulation which will apply to all intermediaries. The common requirements such as grant of registration, general obligations, common code of conduct, common procedure for action in case of default and miscellaneous provisions have been provided in the approved Intermediaries Regulations.

(b) The registration process has been simplified. An applicant may file application in the prescribed format alongwith additional information as required under the relevant regulations along with the requisite fees. The existing intermediaries may, within the prescribed time, file the disclosure in the specified Form. The disclosures shall be made public by uploading the information on the website specified by SEBI. The information of commercial confidence and private information furnished to SEBI shall be treated confidential. In the event intermediary wishes to operate in a capacity as an intermediary in a new category, such person may only file the additional shortened forms disclosing the specific requirements of the new category as per the relevant regulations.

(c) The Fit and Proper criteria have been modified to make it principle based. The common code of conduct has been specified at one place.

(d).The registration granted to intermediaries has been made permanent subject to the compliance of the SEBI Act, regulations, updation of relevant disclosures and payment of fees.

(e).Procedure for action in case of default and manner of suspension or cancellation of certificate has been simplified to shorten the time usually faced by the parties without compromising with the right of reasonable opportunity to be heard. Surrender of certificate has been enabled without going through lengthy procedures.

(f). While common requirements will be governed by the new Regulations, the intermediaries specific requirements will continue to be as per the relevant regulations applicable to individual intermediaries. The relevant regulations will be amended to provide for the specific requirements. The SEBI (Intermediaries) Regulations, 2008 shall come into force in relation to different classes of intermediaries on the date notified by SEBI.

(g).SEBI (Criteria for Fit and Proper Persons) Regulations, 2004 and SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 have been repealed with effect from May 26, 2008. The Fit and Proper Person criteria and the procedure as specified in the new Regulations for action in case of default shall apply with effect from May 26, 2008.

The full text of the SEBI (Intermediaries) Regulations, 2008 is available on the SEBI website: www.sebi.gov.in

Source: PR No.125/2008 dated 19th June 2008

--
Thanks & Regards

Alagar
Investment Banking
Karvy Investor Services Limited
Chennai
Moble: 919884731993/ 919790906827

SEBI simplifies (Issuance and Listing of Debt Securities) Regulations, 2008

SEBI (Issue & Listing of Debt Securities) Regulations, 2008

In order to facilitate development of a vibrant primary market for corporate bonds in India, Securities and Exchange Board of India (SEBI) has notified Regulations for Issue and Listing of Debt Securities to provide for simplified regulatory framework for issuance and listing of non-convertible debt securities (excluding bonds issued by Governments) issued by any company, public sector undertaking or statutory corporations. The Regulations will not apply to issue and listing of, securitized debt instruments and security receipts for which separate regulatory regime is in place.

The Regulations provide for rationalized disclosure requirements for public issues and flexibility to issuers to structure their instruments and decide on the mode of offering, without diluting the areas of regulatory concern. In case of public issues, while the disclosures specified under Schedule II of the Companies Act, 1956 shall be made, the Regulations require additional disclosures about the issuer and the instrument such as nature of instruments, rating rationale, face value, issue size, etc.

While the requirement of filing of draft offer documents with SEBI for observations has been done away with, emphasis has been placed on due diligence, adequate disclosures, and credit rating as the cornerstones of transparency. Regulations prescribe certifications to be filed by merchant bankers in this regard. The Regulations emphasize on the role and obligations of the debenture trustees, execution of trust deed, creation of security and creation of debenture redemption reserve in terms of the Companies Act.

The Regulations enable electronic disclosures. The draft offer document needs to be filed with the designated stock exchange through a SEBI registered merchant banker who shall be responsible for due diligence exercise in the issue process and the draft offer document shall be placed on the websites of the stock exchanges for a period of seven working days inviting comments. The documents shall be downloadable in PDF or HTML formats. The requirements for advertisements have also been simplified.

While listing of securities issued to the public is mandatory, the issuers may also list their debt securities issued on private placement basis subject to compliance of simplified regulatory requirements as provided in the Regulations. The Regulations provide an enabling framework for listing of debt securities issued on a private placement basis, even in cases where the equity of the issuer is not listed. NBFCs and PFIs are exempted from mandatory listing. However, they may list their privately placed debt securities subject to compliance with the simplified requirements and Listing Agreement. A rationalized listing agreement for debt securities is under preparation.

Please find attached the full text of the SEBI (Issue and Listing of Debt Securities) Regulations <http://www.sebi.gov.in/acts/debtregu.pdf> .

Source: PR No.123/2008 dated 19th June 2008

Thanks & Regards

Alagar
Investment Banking
Karvy Investor Services Limited
Chennai
Moble: 919884731993/ 919790906827

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