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TMI BlogIntroduction of Liquidity Window facility for investors in debt securities through Stock Exchange mechanismX X X X Extracts X X X X X X X X Extracts X X X X ..... uote (RFQ) platform for secondary market transactions, reduction in the face value of debt securities issued on private placement basis (proposed to be listed), introduction of framework for Online Bond Platforms (refer https://www.sebi.gov.in/online-bond-platform-providers.html), introduction of corporate bonds repo platform operated by AMC Repo Clearing Limited (refer www.arclindia.com), etc. 2. One of the factors that drives investor participation in a market is the availability of liquidity. Low levels of secondary market transactions in corporate bonds (including due to a large number of institutional investors holding such bonds to maturity) has resulted in the corporate bond market being perceived as illiquid. To address the issue of liquidity for investors, especially retail investors, and pursuant to discussions with issuers / potential issuers of debt securities, it is felt that establishing a framework of providing a Liquidity Window facility by the issuers through use of put options exercisable on pre-specified dates or intervals will provide uniform norms for such issuer(s) to consider adopting Liquidity Window facility in the manner specified. Such uniform norms and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management or liquidity management norms as its Board of Directors may specify (in the absence of any regulatory requirement governing risk management, asset liability management or liquidity management) . 6.2. Debt securities eligible for the Liquidity Window facility, exclusion from ISIN count: The Issuer shall provide Liquidity Window facility only after the expiry of one year from the date of the issuance of the debt securities. Re-issuances shall not be permitted under the ISINs in which Liquidity Window facility is offered. Consequently, such ISINs shall be exempted from the computation of maximum limit on ISINs as specified under Para 1 of Chapter VIII of the Master Circular for issue and listing of Non-convertible Securities, Securitized Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper dated May 22, 2024 3 (as amended from time to time). 6.3. Eligibility of investors to avail the Liquidity Window facility: The Issuer shall specify eligibility of investors who can avail of the Liquidity Window facility i.e. whether the facility shall be available to all investors in the debt securities or only to retail investors in the debt securities. El ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdraw their bids during the liquidity window session. 6.7.3. All exercises of the put option on the debt securities received by the stock exchange until the end of trading hours on the date of closure of the liquidity window (i.e. day three of the Liquidity Window) and for which block is created shall be treated as duly tendered. However, if the window sub-limit specified by the Issuer is exceeded, the acceptance of the tendered debt securities shall be on a proportionate basis. 6.7.4. Stock exchanges, in consultation with clearing corporations and depositories, shall publish detailed operational guidelines regarding the mode and manner of availing the Liquidity Window facility, including the mechanism for exercising the put option to tender the debt securities, blocking of such debt securities in the demat account, the basis of acceptance of tendered debt securities, effecting of transfer from the demat account of the eligible investor at end of the day of closure of the liquidity window, mode and manner of modification or withdrawal of the put option, settlement of funds, handling of shortages, etc. 6.8. Valuation of debt securities, amounts payable and the date of payment: De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be displayed per ISIN: a) Name of the issuer b) Outstanding amount of the ISIN c) Credit rating d) Coupon rate e) Maturity date f) Valuation, if available (as specified in para 6.8 of this circular) g) Liquidity Window schedule - dates and period of exercise (monthly/ quarterly basis) h) Percentage of the Issue size for which such option is provided in the respective ISIN along with the sub-limit of the put option that can be exercised in each liquidity window (in terms of number of debt securities) i) Corresponding percentage of the issue size for which such option has been exercised and amounts paid by the Issuer against such put option (in terms of number of debt securities and amount) j) extent of debt securities sold by the issuer and/or extent of debt securities extinguished by the issuer, as applicable (in terms of number of debt securities) k) percentage of the issue size which is yet to be utilized by the eligible investors, and l) extent of replenishment on account of sale by the issuer (in terms of number of debt securities) Issuer shall furnish the aforesaid information to Stock exchanges, Depositories, and Debenture Trustee who shall host the same on their website/ cor ..... 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