In exercise of its power conferred under Section 11(1) read with Regulation 31(2) of Issue and Listing of Debt Securities (ILDS) Regulations of the Securities and Exchange Board of India Act, 1992, the Securities and Exchange Board of India (herein after referred to as “SEBI”) vide circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018, issued a circular with regards to usage of “Electronic Book Mechanism” for issuance of securities on private placement basis.

In light of the above circular, SEBI had previously vide circular No. CIR/IMD/DF!/48/2016, dated April 21, 2016, mandated usage of electronic book mechanism for issuance of debt securities on private placement basis. On receiving feedback from the market participants to further streamline the process with regards to this circular, SEBI issued a consultation paper and sought public comments on the matter. On the basis of the market feedback and the feedback received on SEBI consultation paper, SEBI decided to make suitable revisions to the existing framework for Electronic Book Mechanism.

There are certain revisions made to the existing framework which are aimed at further streamlining the procedure for private placement of debt securities, allowing private placement of other classes of securities which are in the nature of debt securities and enhancing transparency in the issuance, resulting in better discovery of price. The revised guidelines for the “Electronic Book Mechanism” are placed at Schedule-A, and annexed to the circular (circular No. SEBI/HO/DDHS/CIR/P/2018/05).

This circular shall come in to force with effect from April 01, 2018, and the SEBI circular No. CIR/IMD/DF!/48/2016, dated April 21, 2016, shall stand repealed from the date of the enforcement of this circular.

Lastly, SEBI gave the following directions to the Recognized Stock Exchanges to –

  • Comply with the conditions laid down in this circular.
  • Put in place necessary systems and infrastructure for implementation of this circular.
  • Make consequential changes, if any, to their bidding portal and respective exchange by-laws.
  • Communicate and create awareness about these revised guidelines amongst issuers, arrangers and investors.