The capital market regulator on Tuesday approved stock market majors — BSE and the National Stock Exchange of India (NSE) — for launch of electronic book mechanism(EBM) for issuance of debt securities on private placement.
The Securities and Exchange Board of India (Sebi) allowed the key stock markets to carry out EBM under the provisions of an earlier issued circular dated April 21, 2016. The new regulation will come into effect from July 1, 2016.
“This mechanism would help in streamlining the procedures for issuance of debt securities on private placement basis. Known as BSE-BOND (BSE Bidding Online for Debt), this would ensure transparency while dealing in debt securities,” the BSE said in a statement.
“Any issuer can use the EBM. However, an issuer coming out with an issue of more than Rs 500 crore (inclusive of the green shoe option) would have to mandatorily use this mechanism.”
According to the NSE, the mechanism will streamline procedures for issuance of debt securities on private placement basis and enhance transparency to discover prices
“It is a bidding platform and will not function as a trading platform. Main beneficiaries of this mechanism will be issuers, arrangers, sub-arrangers, and participants, the NSE said in a statement.
“Presently the issuance of private placement has been made offline. The detailed guidelines on electronic book mechanism will be provided subsequently.”