Review of provisions pertaining to specifications related to International Securities Identification Number (ISIN) for debt securities issued on private placement basis
Summary
This circular amends Chapter VIII of the Operational Circular to cap the number of ISINs for private placement debt securities maturing in a financial year. It establishes a maximum limit of fourteen ISINs per issuer, with specific bifurcations for plain vanilla and structured securities. The provisions apply to ISINs utilized for issuing debt securities from April 1, 2023, onwards.
Text
Paragraphs (1), (2) and (3) of Chapter VIII of the Operational circular shall be replaced with the following: “With respect to private placement of debt securities, the following shall be complied with regard to ISINs: 1. A maximum number of fourteen ISINs maturing in any financial year shall be allowed for an issuer of debt securities. In addition, a further six 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. 2. Out of the fourteen ISINs maturing in a financial year, the bifurcation of ISINs shall be as under: 2.1 A maximum of nine ISINs maturing per financial year shall be allowed for plain vanilla debt securities... Provided where the total outstanding amount across the nine ISINs, maturing in a given financial year, reaches Rs. 15,000 crore, then three additional ISINs would be permitted... 2.2 A maximum of five ISINs maturing per financial year shall be allowed for structured debt securities and market linked debt securities. 3. Where an issuer issues only structured/ market linked debt securities, the maximum number of ISINs allowed to mature in a financial year shall be nine.”
Other provisions of Chapter VIII (Specifications related to ISIN for debt securities) of the aforementioned Operational Circular shall remain unchanged. The above threshold may be reviewed periodically to further reduce fragmentation in the corporate bond market.
The provisions of this circular shall be applicable to ISINs utilised to issue debt securities from April 1, 2023. The newly capped limits shall not be applicable to ISINs utilised for issuance of debt securities upto March 31, 2023 and maturing in later years.
Further, with respect to the debt securities issued on or after April 01, 2023, all the ISINs corresponding to these issues (including ISINs issued prior to April 01, 2023), maturing in any financial year, shall adhere to the limit specified in this circular.
The Stock Exchanges and Depositories are advised to: (i) Make amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision, as may be applicable/necessary; (ii) Carry out system changes, if any, to implement the above; (iii) Disseminate the provisions of this circular on their website; (iv) Communicate to SEBI, the status of implementation of the provisions of this circular. (v) Monitor the compliance of this circular by issuer companies.
The Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 55 (1) of the SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021, to protect the interest of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Review of provisions pertaining to specifications related to International Securities Identification Number (ISIN) for debt securities issued on private placement basis. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.