Specifications related to International Securities Identification Number (ISINs) for debt securities issued under the SEBI (Issue and Listing of Debt Securities) Regulations, 2008.
Summary
This circular specifies the ISIN limits and bifurcation rules for private placement debt securities to enhance market liquidity. It grants exemptions from these ISIN requirements for specific regulatory capital instruments issued by banks, NBFCs, HFCs, and insurance companies. The document outlines reporting obligations for issuers and monitoring duties for stock exchanges and depositories.
Text
A maximum number of 17 International Securities Identification Numbers (ISINs) maturing in any financial year shall be allowed. Additionally 12 ISINs shall also be available for the issuance of the capital gains tax debt securities by the authorized issuers under section 54EC of the Income Tax Act 1961 on private placement basis.
A maximum of 12 ISINs maturing per financial year shall be allowed only for plain vanilla debt securities. Further, within these 12 ISINs, the issuer can issue both secured and unsecured debt securities
A maximum of 5 ISINs (i.e. for structured debt securities such as debt securities with call and/or put option, etc.) maturing per financial year shall be allowed only for structured products/market linked debt securities issued under the SEBI circular Cir/IMD/DF/17/2011 dated September 28, 2011, relating to issue and listing of structured/market linked debt securities.
An issuer issuing only structured/market linked debt securities, may utilise the entire bucket of 12 ISINs in a financial year only for structured/market linked debt securities. However, in such a scenario, the additional 5 ISINs as mentioned in paragraph 2.1.2.2 above shall not be available to an issuer for utilization, either for structured debt securities or for plain vanilla debt securities.
In case of structured /market linked debt securities which have embedded options viz. call and/or put option, the maturity of ISINs shall be reckoned on basis of original maturity date of debt securities.
The provisions of this circular shall be applicable for debt securities issued in the financial year (FY) 2017-18 i.e. after the date of this circular and shall not be applicable to the ISINs maturing in respect of the debt securities issued prior to the FY 2017-18. However, post FY 2017-18, whatever issuances are made by the issuer, the issues shall be grouped and consolidated under the ISIN maturing in the same FY.
The following classes of debt securities issued for raising regulatory capital are exempted from the applicability of provisions of this circular:
Tier II bonds issued by Housing Finance Companies (HFCs), the maturity period of which is not less than five years issued as per “Master Circular-The Housing Finance Companies (NHB) Directions, 2010” dated July 01, 2016;
Tier II bonds issued by the standalone Primary dealers, with minimum maturity of five years issued as per “Standalone primary Dealers (Reserve Bank) Directions, 2016” dated August 25, 2016;
Subordinated debt issued by insurance companies, which is either perpetual or the maturity period of which is not less than ten years for life, general and reinsurance companies and seven years for health insurance companies issued as per the “IRDAI (Other forms of Capital) Regulations, 2015” dated November 13, 2015;
Additional Tier 1 bonds, which are perpetual, issued by banks under Basel III norms and Tier II bonds, having minimum maturity period of five years, issued by banks under the Basel III norms as per the “Master Circular- Basel III Capital Regulations” dated July 01, 2015.
Bonds issued by banks to raise resources for lending to long term infrastructure sub-sectors and affordable housing, which have a minimum maturity of seven years issued as per RBI circular dated July 15, 2014 on “Issue of Long Term bonds by banks- Financing of infrastructure and affordable housing”.
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Source: SecMarx — Specifications related to International Securities Identification Number (ISINs) for debt securities issued under the SEBI (Issue and Listing of Debt Securities) Regulations, 2008.. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.