Legal UpdatesSecurity Laws
SEBI clarifies the timeline for securities issued on private placement basis
SEBI Updates
SEBI decides to stipulate the timelines for listing of securities issued on a private placement basis. Below is the timeline :-
| Sr. No. | Details of Activities | Due date |
| 1 | Closure of issue | T day |
| 2 | Receipt of funds | To be completed by T+2
trading day |
| 3 | Allotment of securities | |
| 4 | Issuer to make listing application to Stock
Exchange(s) |
To be completed by T+4 trading day |
| 5 | Listing permission from Stock
Exchange(s) |
The respective timeline would come into effect from 01 December, 2020.
Further, SEBI states that depositories would activate the ISINs of debt securities issued on a private placement basis only after the Stock Exchange has accorded approval for listing of such securities.
In case where re-issuances of new debt securities in an existing ISIN needs to be facilitated then Depositories are advised to allot such new debt securities under a new temporary ISIN which would be kept frozen. Upon receipt of listing approval from Stock Exchange(s) for such new debt securities, the debt securities credited in the new temporary ISIN shall be debited and the same shall be credited in the pre-existing ISIN of the existing debt securities, before they become available for trading.
SEBI also mentions if there is any delay in the listing of securities issued on a private placement basis beyond the timelines specified then the issuer would be liable to pay penal interest of 1% p.a. over the coupon rate for the period of delay to the investor (i.e. from date of allotment to the date of listing). In addition, issuers would be permitted to utilise the issue proceeds of its subsequent two privately placed issuances of securities only after receiving final listing approval from Stock Exchanges.
