Disclosures of defaults on loans etc. by listed entities

SEBI has vide circular dated 4th August, 2017 made it mandatory for listed entities to disclose to the stock exchanges where their securities are listed where there is a default in payment of interest/ instalment obligations on debt securities (including commercial paper), Medium Term Notes (MTNs), Foreign Currency Convertible Bonds (FCCBs), loans from banks and financial institutions, External Commercial Borrowings (ECBs) etc.

It applies to all listed entities which have listed any of the following, viz:
specified securities (equity and convertible securities), non-convertible debt securities and non-convertible and redeemable preference shares.

The entities shall make disclosures within one working day from the date of default at the first instance of default in the format specified in Clause C1. This format is given in the circular.

If there is any outstanding amount under default as on the last date of any quarter , then within 7 days from the end of such quarter, additional disclosures are required to be given in format specified in C2.

Listed entities entity shall also separately provide information pertaining to defaults to the concerned Credit Rating Agencies in a timely manner and as may be specified by SEBI from time to time.

This circular shall come into effect with effect from October 1, 2017. This is to enable listed companies to put appropriate systems in place for prompt submission of disclosures as stipulated in this circular.

The circular can be found at

http://www.sebi.gov.in/legal/circulars/aug-2017/disclosures-by-listed-entities-of-defaults-on-payment-of-interest-repayment-of-principal-amount-on-loans-from-banks-financial-institutions-debt-securities-etc_35538.html

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