Sebi for listing of private debt

The Securities & Exchange Board of India (Sebi) today said it was in favour of compulsory listing of privately-placed debt issues, which are corporate bonds issued to no more than 50 investors, as a means to bring in more transparency and facilitate trading in such instruments.

Privately-placed debt issues — most companies prefer to raise debt through this route these days – are at present not subject to any disclosure norms, which become binding under the listing agreements of stock exchanges.A debt issue becomes public once the number of investors crosses 50 and the investors can, in turn, sell to others.

Of late, Sebi has put such privately-placed debt under the microscope. Starting January 1 this year, it made it mandatory that these deals get reported to stock exchanges.

Following the directive, the National Stock Exchange and Bombay Stock Exchange have recently set up reporting platforms. There is a plan to kick off trading in publicly-issued debt from July 1 this year.

Read more in The Business Standard article.