Clarification w.r.t. issuance and listing of perpetual debt instruments, perpetual non-cumulative preference shares and similar instruments under Chapter V of the SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021
Summary
This circular clarifies that Chapter V of the NCS Regulations applies only to specific perpetual instruments permitted by the RBI for non-equity regulatory capital. It mandates that such instruments must contain issuer or RBI discretion regarding conversion, write-off, payment delays, recall, or term changes. The directive requires stock exchanges and depositories to amend bye-laws, disseminate information, and monitor compliance with these provisions.
Text
Perpetual debt instrument is defined under Regulation 2(1)(y) of the NCS Regulations as issued in accordance with RBI guidelines. Perpetual non-cumulative preference share is defined under Regulation 2(1)(z) similarly.
Only securities meeting all criteria: RBI permission, part of non-equity regulatory capital, perpetual nature, and containing issuer/RBI discretion for events like conversion, write-off, skipping payments, early recall, or changing terms.
Stock Exchanges and Depositories are advised to make amendments to relevant bye-laws, rules and regulations for implementation of this circular.
Stock Exchanges and Depositories must disseminate the provisions of this circular on their website.
Stock Exchanges and Depositories must communicate and create awareness amongst stakeholders regarding the circular's provisions.
Stock Exchanges and Depositories must monitor the compliance of such issuances in terms of relevant provisions of the NCS Regulations including circulars.
This circular shall come into force with immediate effect.
The Circular is issued in exercise of powers conferred under Section 11(1) of the SEBI Act, 1992 read with Regulation 55 of the NCS Regulations, 2021.
Source: SecMarx — Clarification w.r.t. issuance and listing of perpetual debt instruments, perpetual non-cumulative preference shares and similar instruments under Chapter V of the SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.