The Security Exchange Board of India (SEBI), on Friday, released a circular liberalizing the rules for e-book mechanism for issuance of securities on private placement basis.
The electronic book platform (EBP), launched by SEBI in July 2016, is a bidding mechanism for bond sales on a private placement basis on stock exchanges, as the current recommendations were seen as too restrictive.
This is with a view to streamlining the processes, enhancing transparency and encouraging other asset classes to use EBP, said Sebi in the circular.
Currently, bond deals above Rs500 crore have to mandatorily route the bidding through EBP.
The present circular makes EBP compulsory for issue size of Rs200 crore. However, it does not mention the proposed holding duration of securities.
As per records, out of total private placement of debt securities reported on exchanges of Rs6.41 trillion since the July 2016 implementation of EBP, 696 issuances worth Rs2.94 trillion have been done through EBPs. The other changes in the EBP mechanism include allowing withdrawal of the issue. “However, subsequent to such withdrawal, the issuer shall not be allowed to access an EBP platform for a period of seven days from the date of such withdrawal,” Sebi said in the circular.
QIBs have been tagged as eligible participants and bidding would be done on their behalf by arrangers of the deal, SEBI said.
