Additional requirements for the issuers of transition bonds
Summary
This circular prescribes additional disclosure requirements for issuers of transition bonds, a sub-category of green debt securities. It mandates specific denotations, detailed transition plans with interim targets, and ongoing monitoring of plan revisions. These provisions aim to ensure transparency and prevent the misallocation of funds raised through such instruments.
Text
Transition bonds comprise of “funds raised for transitioning to a more sustainable form of operations, in line with India’s Intended Nationally Determined Contributions.”
Issuer of transition bonds shall use a denotation ‘GB-T’ disclosed in the offer documents on the cover page and in type of instrument field in the term sheet.
Transition Plan must contain details of interim targets/milestones along with an indicative timeline, reflecting indicative figures regarding emissions reduction envisaged.
Transition Plan must include a brief of the project implementation strategy and details regarding the usage of technology for the project implementation.
Details regarding the mechanism to oversee the utilization of funds and implementation of the transition plan, including forming a committee if applicable.
An issuer shall disclose the denotation GB-T in the Centralized Database for corporate bonds/ debentures under point 10 of Annex-XIV-A.
The Depositories shall update the denotation i.e. GB-T as prefix in “instrument details” field in Centralized Database for corporate bonds/ debentures.
An Issuer shall disclose the revised transition plan along with an explanation for any revision to the already disclosed plan during the year.
The Issuer shall disclose the transition plan along with a brief on the progress of the implementation of the transition plan in the Annual report.
Stock Exchanges shall monitor the continuous disclosures made by issuers of transition bonds as specified at para 3.3 and 3.4 above.
This provisions of this circular shall come into force with immediate effect and be appended as new Chapter IX-B of the Operational Circular.
This Circular is issued in exercise of the powers conferred under Section 11(1) of the SEBI Act, 1992 read with Regulation 55 (1) of the SEBI ILSR 2021.
Source: SecMarx — Additional requirements for the issuers of transition bonds. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.