SEBI clarifies duty of DT to monitor interest/ principal repayment & sharing of information with CRAs
Published: Jul 01, 2017
By TIOLCORP News Service
MUMBAI, JULY 01 2017: The SEBI (Debenture Trustee) Regulations, 1993 (DT Regulations) require the Debenture Trustees (DTs) to monitor that the debenture holders have been paid interest/ principal by the issuer companies on or before the due dates of such repayment. Further, the Debenture Trustees (DTs) are also required to share information available with them regarding client companies, with registered Credit Rating Agencies (CRAs).
The SEBI (Regulator) clarifies that the DTs shall have adequate systems to ascertain the status of payment of interest/ principal by issuer companies on due dates in timely manner and efficiently share such information with the CRAs. Under DT Regulations, the DTs shall also ascertain the status of payment by the Issuer Company on the due dates from various sources available at their disposal which, inter alia, include the websites of stock exchange & Issuer Company, debenture holders and quarterly reports submitted by Issuer Companies.
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 require the listed entity to submit a certificate to the stock exchange within two days of the interest or principal of the listed debt securities becoming due that it has made timely payment and the DT Regulations mandate the DTs to exercise due diligence to ensure compliance by the body corporate, with the provisions of the Companies Act, the listing agreement of the stock exchange or the trust deed.
The regulator mandates the DTs to call for periodical reports from the body corporate. In order to make the quarterly reports by the issuer companies available to the DTs on timely basis, it is clarified that the DTs shall call for periodical status/ performance reports from the issuer company within 7 days of the relevant board meeting or within 45 days of the respective quarter whichever is earlier.
The Stock Exchanges are advised to disclose the information submitted by the DTs with regard to the information to the investors and the general public by issuing a press release regarding default by Issuer Company to pay interest on debentures or redemption amount, failure to create a charge on the assets and revision of rating assigned to the debentures.