Area of Practice under Listing Agreement

Area of Practice under Listing Agreement for Debt Securities 

SEBI has issued Simplified Debt Listing Agreement vide its circular SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009. 

The Listing Agreement for debt securities consists of two parts. The first part prescribes only incremental disclosures which are relevant for debt securities of such issuers whose equity shares are listed on the Exchange. The second part, which is applicable to issuers whose equity shares are not listed on the Exchange, prescribes detailed disclosures. 

The Debt Listing Agreement authorises Company Secretaries to issues half yearly certificate regarding maintenance of 100% security cover in respect of listed secured debt securities. Clause 2 and 13 of the Listing agreement reads as under: 

1.         Part A of the Debt Listing Agreement applicable to the Issue of Debt Securities where equity shares of the Issuer are listed 

“2. The Issuer agrees that it shall forward to the debenture trustee promptly, whether a request for the same has been made or not: 

(d) a half-yearly certificate regarding maintenance of 100% security cover in respect of listed secured debt securities, by either a practicing company secretary or a practicing chartered accountant, within one month from the end of the respective half year. (not applicable for Bank or NBFC Issuers registered with RBI).” 

2.         Part B of the Debt Listing Agreement applicable to the Issue of Debt Securities where equity shares of the Issuer are not listed on the Exchange 

“13. The Issuer agrees that it shall forward to the debenture trustee promptly, whether a request for the same has been made or not: 

(d) a half yearly certificate regarding maintenance of 100% security cover in respect of listed secured debt securities, by either a practicing company secretary or a practicing chartered accountant, every within one month from the end of the half year. (not applicable for Bank or NBFC Issuers registered with RBI)” 

Further Clause 22 of the Debt Listing Agreement requires the issuer to designate  Company Secretary or any other person as Compliance Officer responsible for ensuring compliance with the regulatory provisions applicable to such issuance of debt securities, reporting to various authorities etc. The extract of the clause is as under:

“22. The Issuer agrees and undertakes to designate the Company Secretary or any other person as Compliance Officer who 

(a) shall be responsible for ensuring compliance with the regulatory provisions applicable to such issuance of debt securities and report the same at the meeting of Board of Directors/ Council of Issuer held subsequently; 

(b) shall directly report to the Securities and Exchange Board of India, Stock Exchanges, Registrar of Companies, etc., and investors on the implementation of various clauses, rules, regulations and other directives of these authorities; 

(c) shall be responsible for filing the information in the Corp Filing system/ Electronic Data Information Filing and Retrieval (EDIFAR) System or any other platform as may be mandated by SEBI from time to time. The compliance officer and the Issuer shall ensure the correctness and authenticity of the information filed in the system and that it is in conformity with applicable laws and terms of the Listing Agreement; 

(d) shall monitor the designated e-mail ID of the grievance redressal division which shall be exclusively maintained for the purpose of registering complaints by investors. The company shall display the email ID and other relevant details prominently on their websites and in the various materials / pamphlets/ advertisement campaigns initiated by them for creating investor awareness.” 

A copy of the Listing Agreement for Debt Securities is also attached for ready reference.