SEBI relaxes ISIN restriction for issuers looking to list debt securities under new regulations

Under the current regulations, a limit of 14 numbers has been set on the number of ISINs that can be used to issue debt securities.

The market regulator has relaxed the ISIN restriction limit for issuers who want to list their originally unlisted ISINs as of December 31, 2023.

ISIN is an alphanumeric code that serves as a unique identifier given to each security issued.

Under the current regulations, a limit of 14 numbers has been set on the number of ISINs that can be used to issue debt securities.

A circular issued on Friday, December 13, by the Securities and Exchange Board of India (SEBI) said that this limit would not be applicable to unlisted ISINs as of the said date.

Also read: SEBI proposes that black-box algo providers register as RAs, keep research reports

This is to ease compliance with a new regulatory requirement.

Regulation 62A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 or LODR Regulations mandates a listed entity (whose non-convertible debt securities are listed) to list all nonconvertible debt securities, proposed to be issued on or after January 1, 2024, on the stock exchange(s).

There is also an option given to listed entities to list its outstanding unlisted non-convertible debt securities issued on or before December 31, 2023.

To make the later easier, this circular has been issued.

The Master Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper dated May 22, 2024, (or NCS Master Circular) has set the current limit of 14 ISINs.

Clause 1 of Chapter VIII of NCS Master Circular reads as under:
“In respect of private placement of debt securities, the following shall be complied with regard to ISINs, utilised to issue debt securities from April 1, 2023:
1.1A maximum number of fourteen ISINs maturing in any financial year shall be allowed for an issuer of debt securities. In addition, a further six ISINs shall also be available for the issuance of the capital gains tax debt securities by the authorized issuers under section 54EC of the Income Tax Act, 1961 on private placement
basis."

With this latest circular, a new clause (clause 4A) has been inserted in Chapter VIII of the NCS Master Circular.

The new clause states: “4A. Unlisted ISINs outstanding as on December 31, 2023 which are converted to listed ISINs, pursuant to the provision of Regulation 62A(2) of LODR Regulations shall be excluded from the maximum limit of ISINs to mature in a financial year.”