New Delhi, April 20, 2018

In a bid to make the bonds market more efficient, Sebi today proposed to drastically cut the timeline for listing of debt securities to six days from 12 days at present.

Besides, the Securities and Exchange Board of India (Sebi) has proposed to make ASBA (Application Supported by Blocked Amount) mandatory for all the investors applying in a public issue of debt securities.

The mandatory ASBA facility would reduce the time taken for collecting banks to commence clearing of payment instruments, forwarding application forms along with bank schedules to registrar and undertaking of technical rejection test.

In addition submission of clearance status of payment instrument should done in 4-5 days as against the present time of 7 days, it added.

The proposals are aimed at ensuring uniformity, standardisation and streamlining of issuance of debt securities with that of equity shares and convertibles

The regulator has sought public comments on the proposal till May 14 and final regulations will be put in place after taking into consideration views of all the stakeholders.

Sebi noted that over the last few years, the corporate bonds market has emerged as one of the major sources of funding. Concurrently, various regulatory initiatives such as implementation of centralised database for corporate bonds, introduction of electronic book platform among others have been taken towards developing such market.

In this direction, it is felt that existing issuance processes may be rationalised further to make it easier and friendly for both the issuers and investors.

According to the regulator, the present timeline of T+12 for listing and commencement of trading in case of public issue of debt securities is inefficient in terms of cost and time and does not ensure smooth functioning for the public issuance process.

Also, non-application of ASBA for public issuances, physical holding of debt securities lead to unnecessary hassles pertaining to refunds, increased cost to the issuers as well as investors.

Accordingly, Sebi has "proposed to reduce the time lines for the public issue of debt securities from T+12 to T+6.".

T denotes the closing date of a public issue of debt securities, while the number represents business days in listing such securities on the bourses.
The proposals have been based on the suggestions of Sebi's Corporate Bond and Securitization Advisory Committee.

[The Times of India]