SEBI Introduces New Disclosure Rules For Listing Commercial Paper

The market regulator introduced new disclosure requirements for listing commercial paper citing rising interest.

The issuers of commercial paper—unsecured money-market instruments to raise short-term funds—have been showing interest in listing such debt securities on the exchanges, Securities and Exchange Board of India said in a circular.

The new framework requires issuers to make disclosures at the time of listing and later regarding material information. It also directed stock exchanges to monitor disclosures and compliance.

According to the circular, here are the key disclosure and compliance requirements:

At The Time Of Listing

• An issuer must provide details of the issuing entity along with the name of its top shareholders, directors, details of auditors and their appointments in the last three years along with the list of top 10 holders of debt securities and commercial paper.
• Disclosures of all delays and defaults in payment of principal amount or interest by the issuer.
• The issuer must ensure disclosure of all material events and regulatory proceedings that may affect it.
• For a better assessment of the issuer’s financial position, the circular mandates disclosure of financials, net worth and the details of guarantor.

Continuous Disclosures

An issuer is required comply with applicable provisions of SEBI’s Listing Obligation and Disclosure Requirement Regulations. The circular mandates disclosure of material information by the issuer within 10 hours from occurrence.

Material events include:

• Details of any default, delay or any expected default in fulfilment of any obligation related to any of the debt instrument issued by the Issuer.
• Revision in credit rating.
• Details of any action that can adversely impact the payment obligations for commercial papers.
• Certificate of completion of the payment obligations within two days of becoming due.