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The Securities and Exchange Board of India (Sebi) has cleared up some confusion around new rules for debt sales approvals, after market participants raised concerns about the challenges they were facing with bond issuances.
The rules, which took effect on September 18, 2024, as part of Sebi’s updated regulations for non-convertible securities, stated that issuers must ensure that their board of directors reviews and takes responsibility for the content of important documents related to bond issuances.
This initially led to confusion, as it seemed boards would need to approve every Key Information Document (KID), which provides updates for upcoming bond issuances. Previously, it was enough for a company to get board approval for an overall amount to be raised, and further approvals for specific bond issuances weren’t required.
However, Sebi clarified in a document released on Thursday that the new rules don’t require formal board approval for every new bond issue. Instead, boards just need to review the documents before the bond issuance starts, for both public and private placements of non-convertible securities that are planned to be listed.
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