ELECTRONIC BOOK MECHANISM FOR ISSUANCE OF DEBT SECURITIES ON PRIVATE PLACEMENT BASISCIRCULAR NO.IMD/DF1/48/2016, DATED 21-4-2016

Riddhi Pratim DuttaCorporate Lawyer & Adviser

Reasons for new circularTo streamline procedures for issuance of debt securitiesTo enhance transparency to price discovery

Who can follow Electronic book mechanismIssues with a single investor and where coupon rate are fixedIssues wherein the issue size is less than Rs. 500 crores, inclusive of green shoe option

WHO can act as electronic book providerThe electronic book mechanism shall be provided by recognised stock exchange with SEBI permissionThey will be known as Electronic Book Providers

Eligibility of electronic book provider On-line platform for receiving bids in private placementBidding portal/website on which it proposes to offer its servicesNecessary infrastructuresElectronic book mechanism so provided by EBP would be subject to periodic audit by Certified Information Systems Auditor (CISA)

WHO will participateIssuerArranger, if any, appointed by the issuer Sub-arranger , appointed by the arranger Institutional Investors *for definition see SEBI ICDR & ILDS regulation

ROles and responsibilitiesStrict KYC adherenceFull disclosure by issuer in PPMOperation procedure management by EBP

ProcedurePre Bid procedure - EnrolmentBidding procedure - within time window and entering bid amountPost bidding procedure - acceptance/rejection of bid and public announcement

Circular shall be applicable with effect from July 01, 2016

Thank you

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