Date: 2022-12-09Category: Not ApplicableState: Union GovernmentCountry: India
Clarification - Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS) (‘debt listed entities’)
**Summary:**
This circular, issued by the Securities and Exchange Board of India (SEBI) on December 9, 2022, provides clarification regarding Circular no. SEBI/HOD-DHSD/DHSR/ACPOD1/PCIR/2022/156 dated November 17, 2022, concerning Schemes of Arrangement by entities with listed Non-Convertible Debt securities (NCDs) and Non-Convertible Redeemable Preference Shares (NCRPS).
Specifically, this circular clarifies that the provisions of the November 17, 2022 circular will not apply to Schemes of Arrangement solely between a debt-listed entity and its unlisted wholly-owned subsidiary. However, the debt-listed entity is still required to file the draft Scheme of Arrangement with the Stock Exchanges for disclosure purposes, and the Stock Exchanges are mandated to disseminate the scheme documents on their websites.
Chapter XII of the LODR Operational Circular dated July 29, 2022, will be modified accordingly.
This circular is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Regulation 101 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The circular aims to protect investor interests and promote the development and regulation of the securities market.
The Stock Exchanges are directed to bring this circular to the attention of debt-listed entities and disseminate it on their websites. The circular is available on the SEBI website under the Legal/Circulars section (www.sebi.gov.in).
For further information, contact Pradeep Ramakrishnan, General Manager, Department of Debt and Hybrid Securities, at 91 22 26449246.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body for securities market in India, also known as SEBI.
Nonconvertible Debt securities: A type of debt instrument issued by companies.
Nonconvertible Redeemable Preference shares: A type of preference share that is nonconvertible and redeemable.
Stock Exchanges: Recognized Stock Exchanges in India.
Schemes of Arrangement: Corporate restructuring schemes that listed entities undertake.
LODR Operational Circular: Refers to the Listing Obligations and Disclosure Requirements Operational Circular.
Securities and Exchange Board of India Act, 1992: The act of parliament that established the Securities and Exchange Board of India (SEBI).
SEBI Listing Obligations and Disclosure Requirements Regulations, 2015: Regulations pertaining to listing obligations and disclosure requirements as mandated by SEBI.
CIRCULAR
SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2022/170 December 09, 2022
To,
All entities who have listed their Non-convertible Debt securities/ Non-convertible
Redeemable Preference shares
All the Recognized Stock Exchanges
Madam/ Sir,
Clarification - Scheme(s) of Arrangement by entities who have listed their Non-
convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares
(NCRPS) (‘debt listed entities’)
1. This has reference to Circular no. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2022/156
dated November 17, 2022 on “Scheme(s) of Arrangement by entities who have listed their
Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares
(NCRPS)”
2. In this regard, it is clarified that the provisions of the aforementioned circular shall not
apply to a Scheme of Arrangement which solely provides for an arrangement between a
debt listed entity and its unlisted wholly owned subsidiary. However, such debt listed entity
shall file the draft Scheme of Arrangement with Stock Exchange(s) for the purpose of
disclosure and the Stock Exchange(s) shall disseminate the scheme documents on their
websites.
3. The Stock Exchanges are advised to bring the provisions of this circular to the notice of
debt listed entities and also to disseminate the same on their websites.
4. Chapter XII of the LODR Operational Circular dated July 29, 2022 will accordingly stand
modified.
5. The Circular is issued in exercise of the powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992 read with Regulation 101 of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, to protect the
interest of investors in securities and to promote the development of, and to regulate the
securities market.
6. This Circular is available at www.sebi.gov.in under the link “LegalCirculars”.
Yours faithfully,
Pradeep Ramakrishnan
General Manager
Department of Debt and Hybrid Securities
+91-22-26449246