BSE, NSE issue framework for listing of commercial papers

"Commercial Papers, by their very nature are short term money instruments and until now, have been regulated primarily by RBI. Listing of CPs will bring them under Sebi's domain as well, leading to a more transparent and better disclosure regime.

"Listed CPs on one hand will assist the issuers in meeting their short-term fund requirements and on the other hand will boost investors protection. Better investor participation can be expected in listed CPs as against unlisted ones, since they will be more governed and regulated," said Anjali Aggarwal Partner at Corporate Professionals.

According to NSE, issuer whose other securities are already listed on the exchange and seeking listing of CPs on the exchange for the first time, is required to include 'commercial paper' in securities applied for listing under "information about the company and securities forming part of uniform listing agreement along with a covering letter".

Commercial Paper is an unsecured money market instrument issued in the form of promissory notes that enables highly rated corporate borrowers to diversify their sources of short-term borrowings and provides an additional instrument to investors.

CP can be issued for maturities between a minimum of 7 days and a maximum of up to one year from the date of issue. CP are usually issued at a discount from face value and reflects prevailing market interest rates.