Regulation 12 - Utilization of issue proceeds. - Securities and Exchange Board of India (Issue and Listing of Municipal Debt Securities) Regulations, 2015

1 [Allotment 12. (1) Allotment in the public issue of municipal debt securities should be made on the basis of date of upload of each application into the electronic book of the stock exchange: Provided that on and after the date of oversubscription, the allotments may be made to the applicants on a proportionate basis upto the oversubscription limit. (2) The issuer and lead manager(s) shall ensure that the municipal debt securities are allotted and/or application monies are refunded or unblocked within such period as may be specified by the Board. (3) The lead manager(s) shall ensure that the allotment, credit of dematerialised securities and refund or unblocking of application monies, as may be applicable, are done electronically. (4) Where the securities are not allotted and/or application monies are not refunded or unblocked within the period stipulated in sub-regulation (2) above, the issuer shall undertake to pay interest at the rate of fifteen per cent. per annum to the investors and within such time as disclosed in the offer document and the lead manager(s) shall ensure the same. ] ************* NOTES:- 1. Substituted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/40 dated 27-09-2019 before it was read as, Utilization of issue proceeds. 12. (1) The funds raised from public issue of debt securities shall be used only for projects that are specified under objects in the offer document. (2) The proceeds of the issue shall be clearly earmarked for a defined project or a set of projects for which requisite approvals have been obtained from concerned authorities. (3) The issuers shall maintain a bank account in which the amount raised from the issue shall be transferred immediately after the closure of the issue and such amount shall only be utilised for specified project(s): Provided that where the issuer is a Corporate Municipal Entity, the issue proceeds, net of issue expenses, shall be used only for onward lending to municipalities, as disclosed in the offer document: Provided further that where the issuer is a corporate municipal entity, it shall maintain sufficient interest margin while onward lending to the municipalities, to meet its operating expenses and obligations. (4) The issuer shall establish a separate project implementation cell and designate a project officer who shall not be below the rank of deputy commissioner, who shall monitor the progress of the project(s) and shall ensure that the funds raised are utilised only for the project(s) for which the debt securities were issued: Provided that where the issuer is a corporate municipal entity, such requirement shall be complied by the Municipality which is being financed. (5) Issuer s contribution for each project shall not be less than twenty per cent. of the project costs, which shall be contributed from their internal resources or grants: Provided that where the issuer is a corporate municipal entity, contribution of the concerned municipality, which is being financed by the corporate municipal entity, shall not be less than twenty per cent. of the project costs, which shall be contributed from its internal resources or grants. (6) The issuer shall disclose the schedule of implementation of the project in the offer document in a tabular form and the funds raised by the issuer shall be utilized in accordance with the said schedule.