SEBI comes out with operational framework for transactions in defaulted debt securities, to be implemented from 1 July onwards

Markets regulator SEBI allowed transactions in defaulted debt securities and put in place operational framework for such transactions New Delhi: Markets regulator SEBI on Tuesday allowed transactions in defaulted debt securities and put in place operational framework for such transactions. Consequently, SEBI has decided to introduce an operational framework for transactions in defaulted debt securities and also prescribed the obligations of issuers, debentures trustees, stock exchanges and depositories to allow transactions while permitting such transactions. With regard to default in payment of redemption amount and resumption of transaction on defaulted debt securities, SEBI said within two working days from the date of intimation from issuer or debenture trustees that issuer has defaulted on its payment obligations, the depositories in co-ordination with exchanges will update the ISIN master file and lift restrictions on transactions in such debt securities. Following intimation by depositories that transactions have been permitted in the defaulted debt securities, exchange will simultaneously but not later than two working days of the default intimation from issuer or debenture trustees permit reporting of over-the counter trades in the concerned defaulted debt securities on its reporting platform, the regulator said. SEBI said in case of any developments that impact the status of default of the debt securities, the issuer or debenture trustee will intimate exchanges and depositories within one working day of such development.