Monitoring and Disclosures by Debenture Trustee(s) - SEBI - SEBI/ HO/ MIRSD/ CRADT/ CIR/ P/ 2020/230

CIRCULAR SEBI/ HO/ MIRSD/ CRADT/ CIR/ P/ 2020/230 November 12, 2020 To, All listed entities who have listed their debt securities or issuers who propose to list their debt securities All Recognized Stock Exchanges All Debenture Trustees registered with SEBI Dear Sir/ Madam, Sub: Monitoring and Disclosures by Debenture Trustee(s) 1. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI (Debenture Trustees) Regulations, 1993 ( DT Regulations ) mandates issuers to submit information/ documents to Debenture Trustee(s). In order to enable debenture trustee(s) to discharge its obligations in respect of listed debt securities, the debenture trustee(s) shall undertake independent periodical assessment of the compliance with covenants or terms of the issue of listed debt securities including for security created . A. Monitoring of security created / assets on which charge is created 2. SEBI Circular No. SEBI/ HO/ MIRSD/ CRADT/ CIR/ P/ 2020/218 dated November 03, 2020 , has prescribed the manner in which debenture trustees shall carry out due diligence for creation of security at the time of issuance of debt securities and as required under Regulation 15(1)(s) 15(1)(t) of DT Regulations , debenture trustee(s) shall carry out due diligence on continuous basis. Debenture trustee shall carry out periodical monitoring in following manner: 2.1. Debenture trustee shall incorporate the terms and conditions of periodical monitoring in the debenture trust deed wherein listed entity shall be liable to provide relevant documents/ information, as applicable, to enable the debenture trustee(s) to submit the following reports/ certification to Stock Exchange(s) within the timelines mentioned below: Reports/Certificate Periodicity Format Asset cover Certificate Quarterly basis within 60 days from end of each quarter Annexure A A statement of value of pledged securities - A statement of value for Debt Service Reserve Account or any other form of security offered - Net worth certificate of guarantor (secured by way of personal guarantee) Half yearly basis within 60 days from end of each half-year. - Financials/value of guarantor prepared on basis of audited financial statement etc. of the guarantor(secured by way of corporate guarantee) Annual basis within 75 days from end of each financial year. - Valuation report and title search report for the immovable/movable assets, as applicable. - 2.2. For existing debt securities, listed entities and debenture trustee(s) shall enter into supplemental/amended debenture trust deed within 120 days from the date of this circular incorporating the changes in the debenture trust deed. 2.3. In case, a listed entity has more than one debenture trustee for its listed debt securities, then debenture trustees may choose a common agency for preparation of asset cover certificate. B. Action to be taken in case of breach of covenants or terms of issue 3. In case of breach of covenants or terms of the issue by listed entity, the debenture trustee shall take steps as outlined in para 6.1 and 6.3 of SEBI Circular SEBI/HO/MIRSD/CRADT/CIR/P/2020/203 dated October 13, 2020 and thereafter take necessary action as decided in the meeting of holders of debt securities in this regard. C. Disclosure on website by debenture trustee 4. The debenture trustee(s) shall make the following disclosures on their websites as specified below: Disclosures Periodicity Format Revision in Credit ratings Continuous basis within T+1 day from receipt of information Table 1 of Annexure B Status of payment of interest/ principal by the listed entity Table 2 of Annexure B Monitoring of Asset cover certificate and Quarterly compliance report of the listed entity. Quarterly basis within 60 days of end of each quarter Table 3 of Annexure B Details of Debenture issues handled by debenture trustee and their status Half-yearly basis within 60 days of the end of each half-year Table 4 of Annexure B Status of information regarding breach of covenants/terms of the issue, if any action taken by debenture trustee Table 5 of Annexure B Complaints received by debenture trustee(s) including default cases Table 6 of Annexure B Status regarding maintenance of accounts maintained under supervision of debenture trustee Annual basis within 75 days of the end of the financial year Table 7 of Annexure B Status of information regarding any default by listed entity and action taken by debenture trustee Table 8 of Annexure B Monitoring of Utilization Certificate Table 3 of Annexure B D. Reporting of regulatory compliance 5. The formats for periodical reporting prescribed by SEBI Circular No. CIR/MIRSD/25/2011 dated December 19, 2011 stands rescinded and the debenture trustee(s) shall furnish revised periodical reports to SEBI in the formats as follows: Report Periodicity Format Half yearly compliance report Half-yearly basis within 30 days of the end of each half-year. Annexure C Details of other activities carried out by Debenture Trustee(s) including type of activity, description of activity etc. - Risk-Based Supervision report - 6. This circular is issued in exercise of the powers conferred upon SEBI under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 2A of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 , Regulation 31(1) of the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 , Regulation 101(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Regulation 29 of the Securities and Exchange Board of India (Issue and Listing of Municipal Debt Securities) Regulations, 2015 to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market. 7. Applicability: The provisions of this circular shall come into force w.e.f. quarter ended December 31, 2020 for listed debt securities. Yours faithfully, Richa G. Agarwal Deputy General Manager Market intermediaries Regulation Supervision Department Email id: [email protected] Phone: +91-22-26449596