The Securities and Exchange Board of India (Sebi) on Monday came out with a uniform time period for listing securities, including municipal bonds, issued on a private placement basis.
The timeline will be applicable for non-convertible redeemable preference shares, debt securities, securitised debt instruments, security receipts, and municipal bonds, said Sebi in a circular. The move comes after Sebi received several requests from market participants for clarification on the time period within which such securities need to be listed following completion of the allotment.
After taking feedback from market participants, Sebi decided that allotment of securities would be completed by T+2 trading days after receipt of the funds.
‘T day’ refers to closure of the issue. It added that the issuer needs to make a listing application to bourses and obtain approval from them by the T+4 trading day.
In case of a delay in listing of securities issued on private placement basis after the timeline, the issuer will pay penal interest of 1 per cent per annum over the coupon rate for the period of delay to the investor (from date of allotment to the date of listing), Sebi said.
In addition, the issuer will be permitted to utilise the issue proceeds of its two subsequent privately placed issuances of securities, only after receiving the final listing approval from stock exchanges, it added.