Issuance of Non-Convertible Debentures NCDsINTERNAL DEBT MANAGEMENT DEPARTMENTCENTRAL OFFICEMUMBAIMumbai, June 23, 2010Issuance of Non-Convertible Debentures Reserve Bank Directions, 20101. DefinitionFor the purposes of these Directions,A.  Non-Convertible Debenture NCD means a debt instrument issued by a corporate including NBFCs with original or initial maturity up to one year and issued by way of private placementB. &ldquoCorporate&rdquo means a company as defined in the Companies Act, 1956 including NBFCs and a corporation established by an act of any Legislature.2. Rating Requirement 1. An eligible corporate intending to issue NCDs shall obtain credit rating for issuance of the NCDs from one of the rating agencies, viz., the Credit Rating Information Services of India Ltd. CRISIL or the Investment Information and Credit Rating Agency of India Ltd. ICRA or the Credit Analysis and Research Ltd. CARE or the FITCH Ratings India Pvt.Ltd or such other agencies registered with Securities and Exchange Board of India SEBI or such other credit rating agencies as may be specified by the Reserve Bank of India from time to time, for the purpose.A. The minimum credit rating shall be P-2,AAA,AA,A,BBB,BB,B of CRISIL or such equivalent rating by other agencies.B. The Corporate shall ensure at the time of issuance of NCDs that the rating so obtained is current and has not fallen due for review.3. Limits and the Amount of Issue of NCDsA. The aggregate amount of NCDs issued by a corporate shall be within such limit as may be approved by the Board of Directors of the corporate or the quantum indicated by the Credit Rating Agency for the rating granted, whichever is lower. B. The total amount of NCDs proposed to be issued shall be completed within a period of two weeks from the date on which the corporate opens the issue for subscription.4. Procedure for Issuance A. The corporate shall disclose to the prospective investors, its financial position as per the standard market practice. B. The auditors of the corporate shall certify to the investors that all the eligibility conditions set forth in these directions for the issue of NCDs are met by the corporate. C. The requirements of all the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India Issue and Listing of Debt Securities Regulations, 2008, or any other law, that may be applicable, shall be complied with by the corporate. D. The Debenture Certificate shall be issued within the period prescribed in the Companies Act, 1956 or any other law as in force at the time of issuance. E. NCDs may be issued at face value carrying a coupon rate or at a discount to face value as zero coupon instruments as determined by the corporate.5. Debenture TrusteeA. Every corporate issuing NCDs shall appoint a Debenture Trustee DT for each issuance of the NCDs. B. Any entity that is registered as a DT with the SEBI under SEBI Debenture Trustees Regulations, 1993, shall be eligible to act as DT for issue of the NCDs only subject to compliance with the requirement of these Directions. C. The DT shall submit to the Reserve Bank of India such information as required by it from time to time.6.Roles and Responsibilities1. The role and responsibilities of corporates, DTs and the credit rating agencies CRAs are set out belowa Corporates1.Corporates shall ensure that the guidelines and procedures laid down for issuance of NCD are strictly adhered to.7. Procedure for Issuance A. The corporate shall disclose to the prospective investors, its financial position as per the standard market practice. B. The auditors of the corporate shall certify to the investors that all the eligibility conditions set forth in these directions for the issue of NCDs are met by the corporate. C. The requirements of all the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India Issue and Listing of Debt Securities Regulations, 2008, or any other law, that may be applicable, shall be complied with by the corporate. D. The Debenture Certificate shall be issued within the period prescribed in the Companies Act, 1956 or any other law as in force at the time of issuance. E. NCDs may be issued at face value carrying a coupon rate or at a discount to face value as zero coupon instruments as determined by the corporate.8.Roles and Responsibilities The role and responsibilities of corporates, DTs and the credit rating agencies CRAs are set out belowA Corporates1.Corporates shall ensure that the guidelines and procedures laid down for issuance of NCD are strictly adhered to.B Debenture Trustees 1.The roles, responsibilities, duties and functions of the DTs shall be guided by these regulations, the Securities and Exchange Board of India Debenture Trustees Regulations,1993, the trust deed and offer document.2.The DTs shall report, within three days from the date of completion of the issue, the issuance details to the Chief General Manager, Financial Markets Department, Reserve Bank of India, Central Office, Fort, Mumbai-400001.3.In order to monitor defaults in redemption of NCDs, the DTs are advised to report immediately, on occurrence, full particulars of defaults in repayment of NCDs to the Financial Markets Department, Reserve Bank of India, Central Office, Fort, Mumbai-400001, Fax 022-2263098122634824.MCA Circular Secured Corporate Debentures and Public Deposit Norms &ndash Part 3   Tuesday, March 26, 2013 Issue of debentures by listed companies Issue by unlisted public companies Issue of convertible debentures by listed companies attracts provisions of SEBI Issue of Capital and Disclosure Requirements Regulations, 2009 along with provisions of Companies Act. Issue of short term non-convertible debentures having an initial maturity up to 12 months will require compliance of Issuance of Non-Convertible Debentures Reserve Bank Directions, 2010. If the issue of NCDs is to be listed whether public or privately placed issue or is a public issue, SEBI Issue and Listing of Debt Securities Regulations, 2008 is required to be complied with.Issue of debentures by private companiesPrivate companies are prohibited from accepting deposits, hence, such companies can issue only either convertible debentures or non convertible secured debentures as per the Notification. As such, no regulations have been provided for issue of debentures, whether convertible or non convertible, by private companies. However, private companies can issue to a maximum of 49 people as beyond which the issue will be deemed public issue and SEBI Issue and Listing of Debt Securities Regulations, 2008 will be required to be complied with. If private companies are to get its issue of NCDs listed, then also, it needs to abide by the SEBI Issue and Listing of Debt Securities Regulations, 2008.  PHONE - 9143369080G MALI - sabir.86skmail.com