The Securities and Exchange Board of India (“SEBI”), vide notification dated July 3, 2023, issued the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) (Second Amendment) Regulations, 2023 (“Second Amendment Regulations”) to amend the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (“Regulations”) which, inter-alia, governs the issuance and listing of debt securities by way of public issuance and on a private placement basis.

By way of the Second Amendment Regulations, SEBI has made the following changes to the Regulations –

Chapter VA (Issuance and Listing of Non-Convertible Securities Issued on a Private Placement Basis) has been introduced in the Regulations requiring an issuer making a private placement of non-convertible securities and seeking listing thereof to file a general information document with the relevant stock exchange containing the following disclosures: (i) disclosures specified in Schedule I of the Regulations; (ii) disclosures specified under the Companies Act, 2013; and (c) any additional disclosures as may be specified by SEBI. These provisions are applicable on a ‘comply or explain’ basis until March 31, 2024 and mandatorily thereafter.

Certain key provisions of Chapter VA are as follows:

1. an issuer making second or subsequent offer of non-convertible securities during the validity of the shelf placement memorandum filed prior to the Second Amendment Regulations coming into force shall not be required to file the general information document for such subsequent issuances so long as a key information document is filed;
2. an issuer that has filed a shelf prospectus in case of public issue and subsequently intends to issue non-convertible securities on a private placement basis and seek listing thereof within the validity period of such shelf prospectus shall not be required to file a general information document so long as a key information document is filed;
3. the key information document shall inter alia include details of the offer in respect of which the key information document is being issued, financial information if such information in the general information document is more than 6 (six) months old, material changes in the information provided in the general information document etc. ‘Material’ has been clarified to mean anything which is likely to impact an investor’s informed investment decision;
4. the general information document shall be valid for a period of 1 (one) year from the date of opening of the first offer of non-convertible securities and no further general information document is required to be filed in respect of second or subsequent offer of non-convertible securities; and
5. an issuer making a private placement of second or subsequent offer of non-convertible securities, during the validity of general information document/ shelf prospectus/ shelf placement memorandum, shall file a key information document for each second or subsequent offer.

Further, Chapter V B (Requirements for Large Corporates) has been introduced in the Regulations requiring listed entities which fulfil the criteria of ‘Large Corporate’ as may be specified by SEBI to comply with the conditions or requirements as may be specified by SEBI from time to time.

Schedule II (Disclosures for Private Placement of Non Convertible Securities) has been omitted and Schedule I (Disclosures for Public Issue of Debt Securities and Non Convertible Redeemable Preference Shares) has been substituted to provide for a common schedule, Schedule I (Disclosures for Issue of Securities), for non-convertible securities being issued by way of a public issue and on a private placement basis.

The amended Schedule I (Disclosures for Issue of Securities) requires the issuer, being a non-banking finance company or housing finance company, to disclose certain additional details on asset liability management.

Please find a copy of the updated Regulations, here and the Second Amendment Regulations, here.

This update has been contributed by Aastha (Partner) and Aditi Kashyap (Associate).

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