E-book mechanism for debt securities issue above Rs 500 cr

The Securities and Exchange Board of India (Sebi) has mandated the electronic book mechanism for issuance of debt securities on a private placement basis. The new regulation will be effective from Friday for debt securities with an issue size of Rs 500 crore and above, inclusive of the over-allotment option, says the Sebi circular.

The move is expected to bring more transparency and make the system more efficient. And, help in discovering a better price model for the secondary market. Sebi had allowed the key stock markets to carry out the mechanism under the provisions of an earlier circular dated April 21. “Pursuant to this, BSE and NSE have been granted approval to act as an electronic book provider (EBP)," it said.
 

All types of investors and arrangers are allowed to bid through this mechanism. For issues of a size below Rs 500 crore (inclusive of over-allotment option), the issuer needs to disclose the details to the EBP or to the information repository for corporate debt market.