SEBI Consultation Paper: Enhancing Ease of Doing Business for Non-Convertible Securities

SEBI has recently issued a Consultation Paper on measures towards Ease of Doing Business for Non-Convertible securities. The same is in furtherance of the objectives outlined by the Honorable Finance Minister Smt. Nirmala Sitharaman in the budget for FY 2023-24, which include simplifying, easing, and reducing compliance costs for participants in the financial sector.

Significant changes suggested include:

1. 𝐏𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧 𝐨𝐟 𝐃𝐚𝐭𝐚 𝐏𝐫𝐢𝐯𝐚𝐜𝐲: Inorder to protect data privacy and to prevent misuse of personal and sensitive data of individuals of the promoters of the issuers, it is proposed that the requirement of disclosing PAN and personal address to be deleted.

2. 𝐀𝐥𝐢𝐠𝐧𝐢𝐧𝐠 𝐃𝐢𝐬𝐜𝐥𝐨𝐬𝐮𝐫𝐞 𝐑𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭𝐬: The current regulations mandate disclosure of project cost and means of financing for new projects. It is proposed to broaden this to include the proposed use of proceeds, aligning it with the SEBI (Issue of Capital and Disclosure Requirements) Regulations.

3. 𝐃𝐞𝐥𝐞𝐠𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐀𝐭𝐭𝐞𝐬𝐭𝐚𝐭𝐢𝐨𝐧 𝐏𝐨𝐰𝐞𝐫𝐬: The current regulations require directors and authorized persons to provide attestations regarding compliance with the provisions of SCRR, SEBI Act, Companies Act, etc. Due to the high frequency of private placement of debt securities, it is proposed delegating attestation powers to committees or key managerial personnel. Further, it is also proposed to extend this to both public and private issuances to ease operations for issuers. Further that the attestation, subject to delegation by the board, can be provided by specified personnel i.e. the executive Chairperson and compliance officer, or MD & CEO and compliance officer etc.

4. 𝐎𝐭𝐡𝐞𝐫 𝐜𝐡𝐚𝐧𝐠𝐞𝐬 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐞𝐝 𝐢𝐧𝐜𝐥𝐮𝐝𝐞: (a) Disclosure in the offer document regarding time period for key operational and financial parameters; (b) Relaxation in the requirement of providing certain business and commercial details in case of purchase or acquisition of immoveable property in the offer document and (c) Modification in the timeline for submission of status regarding payment obligations to the stock exchanges by entities that have listed commercial paper.

A copy of the SEBI Consultation paper is enclosed herewith.

Readers are welcome to send their views to Regstreet Law Advisors at info@regstreetlaw.com.