Listing norms for bond market set to be eased

BSE, NSE officials will meet regulator soon to finalise plan.

The Securities and Exchange Board of India (Sebi) is planning to simplify the listing guidelines for the corporate bond market after both the leading stock exchanges "� the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) "� submitted their views on the matter.

SHORT & SWEET

According to the plan, all listed companies can file a much thinner document and raise funds from investors for their debt issues

The argument is that so much information is available on the listed companies that further disclosures make it more cumbersome and costly

Sebi had proposed the move to simplify corporate bond issues at a concept paper on listing of debt securities put out in November 2007

According to the plan, all listed companies can file a much thinner document and raise funds from investors for their debt issues.

The argument was that so much information was available on the listed companies that further disclosures made it more cumbersome and costly, said sources.

The top brass of the two leading exchanges will be meeting with Sebi officials within a week to sort out the nitty-gritty. The capital market regulator had proposed the move to simplify corporate bond issues at a concept paper on listing of debt securities put out in November 2007.

The basic rationale behind this is if the company has already listed equity, it was already making stringent disclosures according to the equity listing agreement and therefore disclosures do not need to be redundant for debt as well.

As such, market experts opine that rating is a sufficient discipline. However, if a company is listing only its debt, disclosures will be then be stringent.

In a move to ease the process, the simplification of the listing agreement for the bond market will not only do away with the redundant part, but also save and cost for companies.

Last year, the market regulator had given debt issuers the freedom to tap the market with one credit rating and relaxed rules for corporate bond issuances by allowing debt instruments below the investment grade to collect funds through public and rights issuances.