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TMI BlogOperational framework for transactions in defaulted debt securities post maturity date/ redemption date under provisions of SEBI (Issue and Listing of Debt Securities) Regulations, 2008X X X X Extracts X X X X X X X X Extracts X X X X ..... investors to allow transactions in debt securities where redemption amount has not been paid on maturity/redemption date (referred as defaulted debt securities). 2. After detailed consultation with various stakeholders including market participants, investors, Debentures Trustee(s), Stock Exchange(s), Depositories etc., it has been decided to introduce an operational framework for transactions in defaulted debt securities Accordingly, this circular outlines the operational framework for transactions in defaulted debt securities and also prescribes the obligations of Issuers, Debenture Trustee(s), Depositories and Stock Exchange(s) while permitting such transactions. 3. The operational framework has been outlined in Annexure A and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfers on and after the redemption date. It is proposed to allow these restrictions be lifted on defaulted debt securities as per para 4 of this Annexure and after following procedure given in this Annexure. 1. Temporary restriction on transactions in debt securities: 1.1. Stock Exchange(s) shall not allow any transactions in the defaulted debt securities, two working days prior to their maturity/redemption date. 1.2. On maturity/redemption date of the defaulted debt securities Depositories shall temporarily restrict transactions in such debt securities from such maturity/redemption date till the time its status of payment is determined. 2. Intimation on status of payment: 2.1. Issuer shall intimate to the Stock Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date of this circular. 3.3. Based on such assessment, Debenture Trustee(s) shall intimate Stock Exchange and Depositories the status of payment of debt securities within 9 working days of the maturity/redemption date. 3.4. In case intimation of the status of payment of debt securities is not received by Stock Exchanges and Depositories within stipulated timeline, transactions in such debt securities shall continue to be restricted and such restrictions shall continue until any further intimation is received from Issuer/ Debenture Trustee(s) regarding the status of payment of such debt securities. 4. Default in payment of redemption amount and resumption of transaction on defaulted debt securities: 4.1. Within 2 worki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in defaulted debt securities : In case of transactions in defaulted debt securities, the Depositories shall send an intimation (by email/SMS, as per BO a/c details available) to both parties to the transaction that it is Transaction in ISIN-defaulted in redemption immediately. 7. Account statement: While sending the periodic account statement to the Demat account holders, including Consolidated Account statement (CAS), Depositories shall highlight in such statements that a particular debt securities is an ISIN defaulted in redemption . 8. Continuous assessment of default status: 8.1. The Issuer shall inform the Stock Exchange(s), Depositories and Debenture Trustee(s) latest by the 2nd working day of April of each financi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Issuer or from Debenture Trustee(s), transactions shall be restricted in such debt securities by the Depositories immediately. The same shall be informed to the Stock Exchange(s) and disseminated on respective Depositories website, within one working day of such restriction. Further, the concerned ISIN shall be extinguished in the depository system on receipt of corporate action documents from the issuer towards its extinguishment. 10. Process in paras 8 and 9 above shall be followed till either Issuer has been liquidated and money has been realised after completion of recovery proceedings or full payment on these securities is made by Issuer. Annexure B - Circular - Trade Notice - Public Notice - Instructions - Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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