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SEBI Eases Rules for Small Debt Issuances
27 Aug
Summary
- SEBI proposed exempting small-value debt issues from merchant banker requirements.
- This move aims to reduce compliance costs and boost market development.
- Public comments on the proposals are due by September 17.
The Securities and Exchange Board of India (SEBI) has initiated a proposal to exempt "small-value debt" issues from the requirement of appointing a merchant banker. This measure is intended to reduce compliance burdens and stimulate market development for listed entities.
Currently, companies are mandated to hire at least one merchant banker for private placements of debt securities or non-convertible redeemable preference shares valued at Rs 10,000. SEBI noted that this raises the cost of capital, potentially hindering small-value debt issuances.
The proposed exemption would apply to entities registered with a financial sector regulator and listed for over a year. Additional conditions include no pending penalties and a clean financial record, confirmed by an auditor's certificate. SEBI is collecting public comments on this proposal until September 17.
