With effect from September 18, 2024, inserted vide Sebi’s regulations on issue and listing of non-convertible securities (second amendment), the markets regulator had said that persons authorised by issuers shall attest that the contents of documents have been perused by the board of directors and the final and ultimate responsibility of the contents would also lie with the board of directors.
Essentially this meant that boards of directors would have to give a go-ahead even for key information documents (KID), which are the papers that contain periodic updates for upcoming bond issuances. Earlier, it was sufficient for an entity to receive board approval for a ballpark amount of funds to be raised via bond sales through general information documents (GIDs) while subsequent issues did not require such approvals.
In a document updated on Thursday, the Sebi said that the norms introduced on September 18 were not to be seen as a requirement of board approval for every new issuance. “No, Clause 3.3.37(f) does not require prior approval of the contents of the document by the Board of Directors and only perusal of the content of the document is to be done. The document has to be sent to the Board of Directors for information prior to opening of the issue in case of both public issue and private placement of non-convertible securities (that are proposed to be listed),” the Sebi said.
