The Online Bond Platform Provider (OBPP) Association and Grip Invest, a bond platform, want the SEBI to make some changes to the proposals in a consultation paper on issuing and listing debt instruments and security receipts, sources have told Moneycontrol.
They say some of the proposals are not retail investor-friendly and should be revisited. They are expected to write to the Securities and Exchange Board of India, which has sought suggestions from the public on the securitised debt instruments (SDI), sometime this week, the sources said.
“The association is in the process to evaluate and write to the SEBI on certain things which have been proposed in the consultation paper on SDI issuance,” a source said.
Securitisation is a process through which assets are pooled together and re-packaged into pass-through instruments. The cash flow from these underlying assets is passed on to the purchasers in the pass-through instruments.
The consultation paper, issued early this month, proposes a minimum ticket size of Rs 1 crore for originators, which are Reserve Bank of India-regulated entities and non-regulated entities undertaking securitisation.
The association is not happy with the ticket size and wants it to be Rs 10,000 to Rs 1 lakh, a second source said. “The proposed minimum ticket size is higher for the retail investors and it will reduce their participation in this segment, hence we will include in the letter to lower the ticket size,” the source said.
The working group in its report to SEBI recommended a minimum ticket size of Rs 1 crore for each issuance.
According to SDI regulations, the minimum allotment for a Qualified Institutional Buyer is Rs 10 lakh for security receipts but no amount is specified for pass-through certificate.
It has also recommended that the face value of such instruments be kept at Rs 10,000, subject to the appointment of at least one merchant banker by the issuer and compulsory rating of SDI.
It suggested that the initial minimum investment may be at Rs 10 lakh unless a higher threshold is required under any other law as applicable to the originator.
The consultation paper also proposes 200 the number of persons who can be offered or invited (including by way of a secondary transaction) for issuing SDI on a private placement basis.
The association wants the number of participants to be increased.
Currently, few online bond platform providers offer SDI products, which include Grip Invest.
SEBI proposals will shrink the investor base for the online bond platform and they may shift focus on the corporate bonds, sources said.
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