New Delhi, March 22, 2017

Market regulator Sebi today said municipalities planning to issue bonds on private placement basis next fiscal will have to submit audited accounts for past three financial years starting 2013-14 to bourses.

The decision has been taken after receiving feedback from municipal corporations. In view of the operational procedures followed by them, it would be difficult for them to submit the audited accounts for the immediately preceding financial year, it said.

This would come into force from April 1, 2017, the Securities and Exchange Board of India (Sebi) said in a circular.

Any issuer proposing to issue debt securities on private placement basis in 2017-18 would have to submit "audited accounts for the financial years 2013-14, 2014-15 and 2015-16 in the information memorandum to the stock exchanges".

For the immediately preceding year (2016-17), the issuers will submit the half-yearly financial statements (audited or unaudited) as on September 2016.

However, the audited accounts for 2016-17 would have to be submitted within one year from the end of March 31, 2018 to stock exchanges where the debt securities have been listed.

Such audited accounts would have to be displayed on the website of the recognised stock exchanges and the issuer.

Besides, the issuers would be required to provide, on request, a copy (physical or electronic) of such audited accounts to its investors.

As per the processes followed by municipal corporations, the audited accounts for a financial year would be available by the end of the next financial year due to late approval of accounts, Sebi said.

The accounts of a financial year, along with the budget for the next fiscal, gets approved by the standing committee and governing body only in the next financial year.

This leads to time lag of over one financial year, it added.

[The Business Standard]