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- Securities and Exchange Board of India (SEBI) has asked debenture trustees to enhance their disclosure for listed debt securities with a view to protecting the interests of investors.
- Debenture is an instrument of debt executed by the company acknowledging its obligation to repay the sum at a specified rate and also carrying an interest.It is one of the methods of raising loan capital of the company.
- A debenture trustee is a person or an entity that serves as the holder of a debenture stock for the benefit of another party.Debenture is a debt instrument that is not secured by physical assets or collateral.
- SEBI has asked the debenture trustees(DTs) to display on their websites the details of interest or redemption due on debenture holders in respect of all the issues during a financial year within five working days of the start of the financial year.
- Further,they are also required to update the status of payment against such issuers not later than one day from the due date.In case the payment is made with a delay by the issuer, DTs would require to update the calendar specifying the date of such payment with a remark delayed payment.
- In case of default payment of interest and/or principal redemption on the due dates, an additional interest of minimum 2 per cent per annum over the coupon rate shall be payable by the issuer company for the defaulting period.
- Similarly, for delay in listing of debt securities beyond 20 days from date of allotment, the issuer firm needs to pay to investor at least 1 per cent annual interest over the coupon rate from the expiry of 30 days from the deemed date of allotment till the listing of such debt securities
