SEBI

On 8-2-2023, the Securities and Exchange Board of India (‘SEBI’) clarified on the 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 (‘NCS’). This circular came into effect on 8-2-2023.

Key Points:

1. The securities, having the following characteristics, are required to comply with the provisions for issuance and listing as specified under Chapter V of the NCS Regulations:

• the issuer is permitted by RBI to issue instruments

• the instruments form a part of non-equity regulatory capital

• the instruments are perpetual debt instruments, perpetual non-cumulative preference shares or instruments of similar nature

• instruments contain a discretion with the issuer/ RBI for events including but not restricted to all or any of the following events:

i) conversion into equity

ii) write off of interest/ principal

iii) skipping/ delaying payment of interest/principal

iv) making an early recall

v) changing any terms of issue of the instrument

2. The NCS Regulations provide the framework for issuance of non-convertible securities and Chapter V of these regulations prescribes the conditions for issuance and listing of perpetual debt instruments, perpetual non-cumulative preference shares and similar instruments.


*Kriti Kumar, Editorial Assistant has reported this brief.

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