Saturday, October 15, 2011

SEBI SETS RS.100 CR NET WORTH FLOOR FOR LISTED STRUCTURED DEBENTURES

Companies issuing structured products or market-linked debentures should have a minimum net worth of at least Rs. 100 crore, if they want them to be listed on the stock exchanges.

SEBI Guidelines -


  • While the issuers are free to determine the face value for such securities, no invitations for subscription or allotments shall be made for an amount less than Rs. 10 lakh in any issue.
  • Only intermediaries regulated by SEBI (Securities & Exchange Board of India) can sell such securities.
  • The companies would also need to disclose, in all offer documents, a detailed scenario analysis or a valuation matrix showing graphically, the value of the security under different market conditions.
  • Risk factors need to be suitably highlighted so that it is clear to investors that the securities are created on the basis of complex mathematical models.
  • It will be mandatory for the issuer to appoint a third-party valuation agency, which shall be a credit rating agency registered with SEBI (Securities & Exchange Board of India).

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