In just three months, commercial papers (PC) worth more than 3.5 crores lakh were registered with BSE. The trading of commercial papers was authorized by SEBI in October when the regulator published the framework.
CPs are promissory notes not guaranteed by companies, which pay interest. These instruments are governed by RBI and must follow the registration and disclosure criteria defined by SEBI.
To date, 104 issuers have made 1,053 PC issues and have successfully registered PCs worth 3.6007 billion crore of instruments on its platforms, the BSE said. More than 14 issuers have applied to register PCs with BSE for a total issue amount of ₹ 46,885 crores. After the process, the effective date for BSE registration is March 5, 2020.
During the 2019-2020 fiscal year, its debt platforms enabled Indian companies to list debt instruments worth 5,488,664 crore ($ 74.97 billion) as of (March 4, 2020), declared the BSE. Of this amount, the BSE succeeded in raising 3 10 377 crore (42.41 billion dollars) with a market share of around 59% via the BSE BOND platform as of March 4, 2020. The debt platform of the ‘ESB was launched in July 2016 and has raised ₹ 10,16,859 crore ($ 139.95 billion) since its inception, the exchange said.
According to the law firm Khaitan and Co, PCs require continuous disclosure. Manisha Shroff, Khaitan and Co pointed out that although regulated by RBI, once listed, issuers of listed CPs are required to comply with SEBI (Listing Obligations and Disclosure Requirements), 2015 (SEBI LODR) and to ongoing disclosures during the PC’s tenure, including but not limited to the following information.
Issuers of specified listed securities, who are required to comply with the provisions of Chapter IV of SEBI LODR and who also have listed PCs in circulation, are required to prepare and submit financial results in accordance with SEBI LODR Rule 33 and additional positions, in accordance with SEBI LODR Regulation 52 (4).
Issuers of listed non-convertible debentures / redeemable preferred shares, who are required to comply with the provisions of Chapter V of SEBI LODR and also have listed CPs outstanding or who have only listed CPs outstanding must prepare and submit financial results in accordance with article 52 of SEBI LODR.
A certificate from the issuer’s CEO / CFO must be submitted to the stock exchange (s) on a quarterly basis certifying the end use of the CP product and compliance with the other listing conditions.
Issuers of listed PCs are also required to disclose important information / events to stock exchanges (within 24 hours) such as, in particular, the default / delay foreseen in their payment obligations for debt instruments, any revision of the rating of credit.
Issuers of NBFCs and HFCs issuing listed PCs are required to submit their latest ALM declarations to the stock exchanges as and when they are disclosed to their respective regulators.
