What SEBI paper proposes to ease compliance for entities with listed NCDs

In a move to ease the compliance requirements for organisations with listed non-convertible debentures (NCDs), the Securities and Exchange Board of India (SEBI) proposed amendments on Friday.

This revision will ease the cost of compliance for the financial sector entities.

This move is in line with the announcement by the government in the FY 2023-24 Budget: “To simplify, ease and reduce the cost of compliance, financial sector regulators will be requested to carry out a comprehensive review of existing regulations. For this, they will consider suggestions from public and regulated entities...”

Further, SEBI suggested placing in order, the approval and authentication process for financial results of institutions with listed non-convertible securities to that of equity-listed organisations, the capital markets regulator said in the consultation paper.

Streamlining procedures

This will streamline the procedures, ensuring that financial results are approved by the board of directors and signed by a designated official, similar to the requirements for equity-listed entities.

The regulator also proposed to align the provisions of disclosure rules for fraud and default by key managerial personnel in entities with listed non-convertible securities with those applicable to equity-listed entities.

As per the consultation paper, SEBI said it will also streamline the timeline for notifying the stock exchanges of record dates by entities with listed non-convertible securities, which may be reduced from 7 to 3 working days. This proposal will provide ample time for market participants to respond.

The regulator's Corporate Bonds and Securitisation Advisory Committee also proposed mandating that all disclosures by listed entities with non-convertible securities be filed in the XBRL (eXtensible Business Reporting Language) format.

The change will streamline the filing process and reduce duplication.

Currently, the entities are required to submit filings in both XBRL and PDF formats.

Relaxing restrictions on ISINs

Additionally, it also proposed relaxing the restrictions on International Securities Identification Numbers (ISINs) for unlisted securities that were outstanding as of December 31, 2023, if those ISINs are subsequently listed.

This measure will reduce the regulatory burden on entities with multiple ISINs and facilitate their transition to a listed status.

The SEBI has invited public comments and suggestions on the consultation paper by September 6.