New debt disclosure norms to improve transparency, say fund managers

Legal experts said the move to specify penalties for default in payment or delay in listing in the term-sheet will bring in more legal sanctity

The new disclosure framework for listed debt securities will help improve transparency and could potentially reduce the information asymmetry among different sets of debenture holders, said fund managers.

The market regulator Securities and Exchange Board of India (Sebi) on Monday introduced a couple of critical changes to the disclosure regime directing the so-called debenture trustees (DTs) to disclose their compensation structure, maintain a calendar of interest payments and redemptions and introduce additional covenants in case of privately placed debts.

"The intention of Sebi seems to be to plug information gaps between different set of debenture holders. However, more clarity is