Stock Market: Sebi cuts down timeline for debt securities from T+6 to T+3

The capital markets regulator Securities and Exchange Board of India (Sebi) has cut down on the timeline for listing of debt securities and non-convertible redeemable preference shares (NCRPS) to T+3 working days from the current T+6 redeemable working days. Initially, it will be introduced as an option to issuers for a period of one year and later on a permanent basis.

The circular dated Sept 26 says that to further ease of compliance for issuers, the listing timeline of T+3 working days is introduced as an option to issuers for a period of one year and on a permanent basis such that all listing occurs on T+3 basis.

The circular reads that it has been done to facilitate faster access to funds for issuers and investors to have early credit and liquidity of their investment. Therefore, with a view to align the listing timeline in case of public issue of debt securities and NCRPS with that of non-convertible securities issued on private placement basis and specified securities, it was decided to reduce the listing timeline in case of public issue of debt securities and NCRPS to T+3 working days from existing timeline of T+6 working days.

“The T+3 timeline for listing shall be appropriately disclosed in the Offer Documents of public issues,” the circular reads.

In case of failure

In case of failure to list these securities within three days, all application moneys received or blocked in the public issue will be refunded or unblocked forthwith within two working days from the scheduled listing date to the applicants through the permissible modes of making refunds and unblocking of funds.

Additionally, for delay in refund/unblocking of funds beyond the timelines, the issuer will be liable to pay interest at the rate of 15 percent per annum to the investors from the scheduled listing date till the date of payment.

Voluntary to permanent

The circular says that the provisions of this circular will be applicable on a voluntary basis to public issues of debt securities and NCRPS opening on or after Nov 1, 2024. Whereas, it will be mandatory for public issues of debt securities and NCRPS opening on or after Nov 1, 2025.

The circular also states that the stock exchanges will monitor compliance with the provisions of this circular.

It is vital to note that Sebi recently directed that all individual investors applying for public issues of debt securities through intermediaries for amounts up to ₹5 lakh should only use UPI for blocking the required funds.