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TMI BlogGuidelines for Issue and Listing of Structured Products/ Market Linked DebenturesX X X X Extracts X X X X X X X X Extracts X X X X ..... t a variety of hybrid securities that combine features of plain vanilla debt securities and exchange traded derivatives are being issued through private placements and listed on stock exchanges. It is seen that such securities differ from plain vanilla debt securities or debt securities issued with embedded call or put options, i.e., by offering market linked returns obtained through exposures on exchange traded derivatives. Since such returns are linked to equity markets, such securities are also called equity linked debentures or stock linked debentures etc. 3. In view of the fact that such securities are different in their nature and their risk-return relationship, it has been decided to specify additional disclosures and other requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Schedule I of Debt Regulations read with Regulation 21(1) of the SEBI (Issue and Listing of Debt Securities) Regulations, the following additional disclosures shall be made in all offer documents for such securities: i. Credit rating by any registered Credit Rating Agency shall bear a prefix PP-MLD denoting Principal Protected Market Linked Debentures followed by the standardized rating symbols for long/ short term debt on the lines specified in SEBI Circular No. CIR/MIRSD/4/2011 dated June 15, 2011. ii. A detailed scenario analysis/ valuation matrix showing value of the security under different market conditions such as rising, stable and falling market conditions shall be disclosed in a table along with a suitable graphic repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luation agency which shall be a credit rating agency registered with SEBI. ii. This valuer shall publicly publish on its website and provide to the issuer value of the securities at a frequency which is not less than once in a calendar week. Also, the issuer shall arrange to provide to an investor the value whenever investor asks for it. iii. The cost incurred for valuation shall be disclosed in the offer document. At no point in time shall the issuer charge the investor for such services. iv. The issuer shall also make the valuations available on its website. g. Primary Issuance and sale of securities to retail investors: The issuer shall ensure that such securities are sold to retail investors with the following safeguards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mply with the conditions specified in the circular. b. Create awareness among issuers of such securities regarding provisions of this circular. 7. The Credit Rating Agencies are directed to comply with the conditions specified in the circular. 8. This circular shall be applicable on all offer documents on which in-principle/ final approval is sought from stock exchanges on or after November 01, 2011. 9. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 31(2)(c) of SEBI (Issue and Listing of Debt Securities) Regulations, 2008. 10. This circular is available on SEBI website at www.sebi.gov.in under the category Legal Framewor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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