On 31-10-2022, the Securities and Exchange Board of India (‘SEBI’) has issued a circular on review of provisions pertaining to specifications related to International Securities Identification Number (‘ISIN’) for debt securities issued on private placement basis to reduce fragmentation in the primary market and enhance liquidity in the secondary market. The provisions of this circular will be applicable from 1-04-2023.

Key Points:

  1. Newly capped limits are not applicable on ISINs utilized for issuance of debt securities upto 31-03-2023 and maturing in later years.

  2. Chapter VIII of the Operational Circular dated 10-08-2021 deals with specifications related to ISIN for debt securities.

  3. Earlier, the maximum number of ISINs maturing in any financial year allowed for an issuer of debt security was 17 which has been reduced to 14.

  4. For issuance of the capital gains tax debt securities under 54-EC of the Income Tax Act, 1961, the number has been reduced from 12 to 6.

  5. 14 ISINs are bifurcated:

    • For plain vanilla debt securities- maximum 9 ISINs maturing is allowed (secured and unsecured debts securities). If the outstanding amount reaches Rs. 15,000 crores, then another 3 can be permitted to mature in the same year.

    • For structured debt securities and market linked debt securities- maximum 5 ISINs maturing will be allowed.

  6. In case of only structured/ market linked debt securities, a maximum of 5 ISINs are allowed to mature.

*Kriti Kumar, Editorial Assistant has reported this brief.

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