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New norms proposed for public issue of InviTs, additional tier- I bonds

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The Securities and Exchange Board of India ( Sebi) has proposed new regulations for public issue of core capital instruments by banks and for the public issue of Infrastructure Investment Trusts ( InviTs).
The proposed norms for retail or public issuance of Additional Tier- 1 ( AT1) bonds set the minimum investment at ? 2 lakh, due to the additional risk with these as compared to other debt products. “ To ensure only well- informed retail ( individual) investors, with adequate risk tolerance level, subscribe to these," explained Sebi in the draft norms, issued on Friday.
Last year, the Reserve Bank had allowed banks to issue AT1 instruments to retail investors. Sebis committee on corporate bonds had deliberated on the additional requirements for and disclosures by banks for doing so.
For InviTs, Sebi has proposed that disclosures in the offer documents and draft papers be kept in the public domain for at least 21 days. The allocation in the public issue to qualified institutional buyers ( QIBs) is proposed to be capped at 75 per cent. An investment manager can allocate up to 60 per cent of the portion available for allocation to QIBs to anchor investors.
The issue would need to be kept open for at least three working days but not more than 30 days.
Sebi also proposed no InviT make a public issue of units if it or any of its sponsors, investment manager or trustee was barred from accessing the capital market by it or is a wilful defaulter as defined by the Reserve Bank.
Sebi has refunded Rs.42 crore to Sahara bond- holders In the high- profile Sahara case, Sebi has disclosed having refunded over Rs.42 crore to the bondholders of the two Sahara firms while discrepancies were found in nearly 3,000 refund applications. According to the latest status update on the refund process, published today, Sebi received 10,456 applications and made refunds with respect to 7,296 applications for an aggregate amount of Rs.42,42,36,472 including interest of Rs.18,04,58,872, as on June 3, 2015. “ About 1,527 applications were referred to applicants for removal of discrepancies and the remaining ( approximately 3,000 cases) fall in the disputed category, which need to be looked into and decided upon individually by the Competent Authority," Sebi said in its latest annual report released on Friday.
Business Standard, New Delhi, 196th Dec. 2015

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