Regulation 7 - Filing of draft offer document - Securities and Exchange Board of India (Issue and Listing of Municipal Debt Securities) Regulations, 2015

1 [Filing of draft offer document 7. (1) No issuer shall make a public issue of municipal debt securities unless a draft offer document has been filed with the Board and designated stock exchange through the lead manager: Provided that where an issuer has filed a shelf offer document, not more than four public issuances shall be made through a single shelf offer document. (2) The lead manager shall submit the following to the Board along with the draft offer document, - (a) certificate confirming that a written agreement has been entered into between the issuer and the lead manger; (b) a due diligence certificate as per Form A of Schedule II. (3) The Board may specify changes or issue observations, if any, on the draft offer document within twenty one days from the later of the following dates: a) the date of receipt of the draft offer document under sub-regulation (1); or b) the date of receipt of satisfactory reply from the lead manager(s), where the Board has sought any clarification or additional information from them; or c) the date of receipt of clarification or information from any regulator or agency, where the Board has sought any clarification or information from such regulator or agency; or d) the date of receipt of a copy of in-principle approval letter issued by the stock exchange(s). (4) The draft offer document filed with the designated stock exchange shall be made public by posting the same on the website of the designated stock exchange for seeking public comments for a period of fifteen days from the date of filing the draft offer document with such exchange and shall be available for download in PDF / HTML formats. (5) The draft offer document shall also be displayed on the website of the issuer, lead manager(s) and the stock exchanges where the municipal debt securities are proposed to be listed. (6) The lead manager shall ensure that the draft offer document specifies the names and contact details of the compliance officer of the lead manager, the officer concerned and the project officer, wherever applicable, of the issuer including their postal and email address, telephone and fax numbers. (7) The lead manager shall after expiry of the period stipulated in sub-regulation (4) file with the Board the details of the comments received by them or the issuer from the public in respect of the draft offer document, during the period stipulated in sub-regulation (4), alongwith the consequential changes, if any, that are required to be made in the draft offer document. (8) If the Board specifies any changes or issues observations, the issuer and lead manager(s) shall carry out such changes in the draft offer document and shall submit to the Board the updated draft offer document complying with the observations issued by the Board and highlighting all changes made in the draft offer document and before filing the offer document with the stock exchange or Registrar of Companies, as the case may be. (9) The lead manager(s) shall submit the following documents to the Board after issuance of observations by the Board or after expiry of the period stipulated in sub-regulation (3) of this regulation if the Board has not issued observations: a) a statement certifying that all changes, suggestions and observations made by the Board have been incorporated in the offer document or the placement memorandum; b) a due diligence certificate as per Form B and Form C of Schedule II. (10) A copy of draft and final offer document along-with a soft copy shall also be forwarded to the Board, simultaneously with filing of these documents with the designated stock exchange. (11) The issuer filing a shelf offer document shall also file a copy of an information memorandum, containing all material facts including changes in the financial position as have occurred between the previous offer or first offer or subsequent offer of municipal debt securities, with the recognised stock exchanges and the Board and in case the issuer is a body corporate to whom the Companies Act, 2013 applies such issuer shall also file the same with the Registrar of Companies. (12) The lead manager shall, furnish to the Board a due diligence certificate as per Schedule II of these regulations with the offer document prior to opening of the public issue: Provided that where the issuer is a body corporate to which the Companies Act, 2013 applies, the lead manager shall, prior to filing of the final offer document with the Registrar of Companies, furnish to the Board a due diligence certificate as per Schedule II of these regulations. (13) The debenture trustee, shall, prior to the opening of the public issue, furnish to the Board a due diligence certificate as per Schedule III of these regulations. (14) The issuer and the lead manager(s) shall ensure that the offer documents are hosted on the websites as required under these regulations and its contents are the same as the versions as filed with the Registrar of Companies, Board and the stock exchanges, as applicable. (15) The lead manager(s) and the stock exchanges shall provide copies of the offer document to the public as and when requested and may charge a reasonable sum for providing a copy of the same. ] ************* NOTES:- 1. Substituted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/40 dated 27-09-2019 before it was read as, Filing of draft offer document 7. (1) No issuer shall make a public issue of revenue bonds unless a draft offer document has been filed with the designated stock exchange through the lead merchant banker: Provided that where an issuer has filed a shelf prospectus, not more than four public issuances shall be made through a single shelf prospectus during a financial year. (2) The draft offer document filed with the designated stock exchange shall be made public by posting the same on the website of the designated stock exchange for seeking public comments for a period of seven working days from the date of filing the draft offer document with such exchange. (3) The draft offer document may also be displayed on the website of the issuer, merchant bankers and the stock exchanges where the revenue bonds are proposed to be listed. (4) The lead merchant banker shall ensure that the draft offer document specifies the names and contact details of the compliance officer of the lead merchant banker, the officer concerned and the project officer, wherever applicable, of the issuer including their postal and email address, telephone and fax numbers. (5) The lead merchant banker shall ensure that all comments received on the draft offer document are suitably addressed: Provided that where the issuer is a corporate municipal entity, the lead merchant banker shall ensure that all comments received on the draft offer document are suitably addressed prior to the filing of the final offer document with the Registrar of Companies. (6) The issuer shall, before filing of draft offer documents with Board, obtain a Viability Certificate or Detailed Project Appraisal Report (DPR) from a scheduled commercial bank or public financial institution stating that the project is financially viable, based on the estimates/assumptions available at that time. (7) A copy of draft and final offer document shall also be forwarded to the Board for its records, simultaneously with filing of these documents with designated stock exchange. (8) The issuer filing a shelf prospectus shall file a copy of an information memorandum with the recognised stock exchanges and the Board and in case of a corporate municipal entity, file the same with the Registrar of Companies. (9) Where the issuer is a corporate municipal entity, the information memorandum shall contain the disclosures specified in Companies Act, 2013 and rules made thereunder and shall include disclosures regarding summary term sheet, material updations including revision in ratings, if any, along with the rating rationale and financial ratios specified in Schedule I. (10) The lead merchant banker shall, prior to opening of the public issue, furnish to the Board a due diligence certificate as per Schedule II of these regulations: Provided that where the issuer is a corporate municipal entity, the lead merchant banker shall, prior to filing of the final offer document with the Registrar of Companies, furnish to the Board a due diligence certificate as per Schedule II of these regulations. (11) The debenture trustee, wherever appointed under proviso to sub-regulation (7) of Regulation 5 shall, prior to the opening of the public issue, furnish to the Board a due diligence certificate as per Schedule III of these regulations.