SEBI issues Circular for Electronic Book Mechanism for issuance of securities on private placement basis

In exercise of powers conferred under Section 11(1) read with Regulation 31(2) of ILDS Regulations of the Securities and Exchange Board of India Act, 1992, SEBI has issued a circular for ‘Electronic Book Mechanism’ for issuance of securities on private placement basis. SEBI vide circular No. CIR/IMD/DF1/48/2016 dated 21-04-2016, mandated usage of electronic book mechanism for issuance of debt securities on private placement basis. Subsequently, on receiving feedback from the market participants to further streamline the process, SEBI issued a consultation paper and sought public comments on the matter. On the basis of market feedback and the feedback received on SEBI consultation paper, the securities market regulator decided to make suitable revisions to the existing framework for Electronic Book Mechanism. The revisions made to the existing framework are aimed at further streamlining the procedure for private placement of debt securities, allowing private placement of other classes of securities which are in the nature of debt securities and enhancing transparency in the issuance, resulting in better discovery of price. The revised guidelines for the Electronic Book Mechanism are placed at Schedule-A of the circular [SEBI/HO/DDHS/CIR/P/2018/05, dated 05-01-2018]. The said circular shall come in to force w.e.f. 01-04-2018 and the SEBI circular CIR/IMD/DF1/48/2016 dated 21-04-2016 shall stand repealed from the date of the enforcement of this circular.

Recognized Stock Exchanges are directed to:

· Comply with the conditions laid down in the new circular

· Put in place necessary systems and infrastructure for implementation of the circular;

· Make consequential changes, if any, to their bidding portal and respective exchange bye-laws; and

· Communicate and create awareness about the revised guidelines in the new circular amongst issuers, arrangers and investors.

[SEBI/HO/DDHS/CIR/P/2018/05, dated 05-01-2018]

Securities and Exchange Board of India

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