New Delhi, Mar 7 (PTI) In order to streamline the capture and dissemination of information related to ‘encumbrances’, Sebi on Monday asked depositories to devise a mechanism to record all types of outstanding encumbrances and reasons for the same in the depository system by June 30.
The decision, aimed at bringing in more transparency, has been taken in consultation with the stock exchanges and depositories, Sebi said in a circular.
The capital markets regulator said all types of encumbrances need to necessarily be recorded in the depository system.
Further, the depositories will have to capture details of the ultimate lender along with name of the trustee acting on behalf of such ultimate lender such as banks, NBFCs, etc.
In case of issuance of debentures, name of the debenture issuer will have to be captured in the depository system.
Besides, depositories will now have to capture the reasons for encumbrances in the depository system.
“The depositories shall also devise an appropriate mechanism to record all types of outstanding encumbrances in the depository system by June 30, 2022,” Sebi said.
For the purpose of dissemination of this information, Sebi said depositories will provide information to the stock exchanges for the transactions recorded in the depository system.
The stock exchanges will consolidate the information received from both the depositories and disseminate the same on their website as per the formats specified by Sebi.
Also, the exchanges will have to devise an appropriate mechanism for dissemination of disclosures under system driven disclosure (SDD) in a simple readable PDF format.
The regulator said reconciliation of data will be conducted by listed companies, stock exchanges and depositories at least once in a quarter or immediately whenever any discrepancy is noticed.
The new framework will come into effect from July 1, 2022, the Securities and Exchange Board of India (Sebi) said.
The SAST (Substantial Acquisition of Shares and Takeover) Regulations require promoters of a company to disclose details of their encumbered shares.
The exchanges, depositories, and registrar and share transfer agents have been asked to bring the provisions of the new framework to the notice of the listed companies, their promoters and also disseminate the same on their respective websites.
The exchanges and depositories have been asked to report the progress in the matter through monthly development reports till its final implementation. PTI SP ABM ABM
