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TMI BlogAmendment to Para 15 of Master Circular for Credit Rating Agencies (CRAs) dated May 16, 2024 (“Master Circular”)X X X X Extracts X X X X X X X X Extracts X X X X ..... aster Circular , definition of default for debentures/ bonds is specified as A delay of 1 day even of 1 rupee (of principal or interest) from the scheduled repayment date . No exemption is provided from the above, except in case of rescheduling of the debt instrument by the lenders prior to the due date of payment. Therefore, any other instance of a one-day delay in payment or one-rupee shortfall in payment shall be recognized by the CRA as default. Such requirement is reiterated and remains unchanged from since the notification of the SEBI (Credit Rating Agencies) Regulations, 1999 . 2. In the wake of COVID-19 pandemic, with a view to providing some flexibility to CRAs in taking appropriate view in cases of defaults corrected by the rated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s CRAs. 4. In this regard, the Working Group has highlighted that the following scenarios of non-payment of debt (principal and/ or interest) may arise due to reasons beyond the control of the issuer, namely, failure to remit payment due to absence of correct information or due to incorrect or dormant investor account furnished by the investor(s) or due to notice/ instruction received from a government authority to freeze the account of investor(s). 5. It has been decided that in the aforesaid scenario, the CRA shall confirm and verify the availability of adequate funds with the issuer and also confirm and verify: 5.1. the proof of failure of the required payment of debt (principal and/ or interest), 5.2. the reasons for failure being as sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs conferred by Section 11 (1) of Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 20 of CRA Regulations to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market. 11. This Circular is available on the website of the Securities and Exchange Board of India at www.sebi.gov.in under the category Legal and under the drop down Circulars . Yours faithfully, Sarika Kataria Deputy General Manager Department of Debt and Hybrid Securities Tel No.022-2644-9411 Email ID - [email protected] - Circular - Trade Notice - Public Notice - Instructions - Office orders Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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