Regulation 4 - General Conditions - Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008

CHAPTER II ISSUE REQUIREMENTS FOR PUBLIC ISSUES General Conditions 4. 1 [(1) No issuer shall make any public issue of debt securities if as on the date of filing of draft offer document or final offer document as provided in these regulations: (a) the issuer or the person in control of the issuer or its promoter or its director is restrained or prohibited or debarred by the Board from accessing the securities market or dealing in securities; or (b) the issuer or any of its promoters or directors is a wilful defaulter or it is in default of payment of interest or repayment of principal amount in respect of debt securities issued by it to the public, if any, for a period of more than six months.] (2) No issuer shall make a public issue of debt securities unless following conditions are satisfied, as on the date of filing of draft offer document and final offer document as provided in these regulations, (a) it has made an application to one or more recognized stock exchanges for listing of such securities therein: Provided that where the application is made to more than one recognized stock exchanges, the issuer shall choose one of them as the designated stock exchange: Provided further that where any of such stock exchanges have nationwide trading terminals, the issuer shall choose one of them as the designated stock exchange; Explanation: For any subsequent public issue, the issuer may choose a different stock exchange as a designated stock exchange subject to the requirements of this regulation; (b) it has obtained in-principle approval for listing of its debt securities on the recognized stock exchanges where the application for listing has been made; (c) credit rating has been obtained from at least one credit rating agency registered with the Board and is disclosed in the offer document: Provided that where credit ratings are obtained from more than one credit rating agencies, all the ratings, including the unaccepted ratings, shall be disclosed in the offer document; (d) it has entered into an arrangement with a depository registered with the Board for dematerialization of the debt securities that are proposed to be issued to the public, in accordance with the Depositories Act,1996 and regulations made thereunder. (3) The issuer shall appoint one or more merchant bankers registered with the Board at least one of whom shall be a lead merchant banker. (4) The issuer shall appoint one or more debenture trustees in accordance with the provisions of 2 [ Section 71 of the Companies Act, 2013 (18 of 2013) ] and Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 . (5) The issuer shall not issue debt securities for providing loan to or acquisition of shares of any person who is part of the same group or who is under the same management. (6) Explanation: For the purposes of sub-regulation (5), - (a) two persons shall be deemed to be part of the same group if they belong to the same group within the meaning of clause (ef) of section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) or if they own inter-connected undertakings within the meaning of clause (g) of section 2 of that Act; (b) the expression under the same management shall have the meaning derived from sub-section (1B) of section 370 of the Companies Act, 1956 (1 of 1956) . ************* NOTES:- 1 Substituted for sub-regulation (1) by the SEBI (Issue and Listing of Debt Securities) (Amendment) Regulations, 2016 w.e.f. 25-05-16. Prior to substitution, sub-regulation (1) read as under: (1) No issuer shall make any public issue of debt securities if as on the date of filing of draft offer document and final offer document as provided in these regulations, the issuer or the person in control of the issuer, or its promoter, has been restrained or prohibited or debarred by the Board from accessing the securities market or dealing in securities and such direction or order is in force. 2. Substituted vide Notification No. SEBI/ LAD-NRO/GN/2020/35 dated 08-10-2020 before it was read as Section 117B of the Companies Act, 1956 (1 of 1956)