Ref No CRD/GEN/2003/4
October 22, 2003

To,

The Company Secretary/Compliance Officer,
All Listed Companies

Dear Sir/Madam

Sub: Secondary Market for Corporate Debt Securities

SEBI vide their circular No SEBI/MRD/SE/AT/36/2003/30/09 dated September 30, 2003 has laid down the guidelines to be complied by listed companies making issue of debt securities on a private placement basis. Such companies are inter alia required to get their fresh issue of debt listed on the Exchange. The guidelines are as under:

• The company shall make full disclosures (initial and continuing) in the manner prescribed in Schedule II of the Companies Act, 1956, SEBI (Disclosure and Investor Protection) Guidelines, 2000 and the Listing Agreement with the exchanges. However, if the privately placed debt securities are in standard denomination of Rs.10 Lakhs, such disclosures may be made only through web sites of the stock exchange where the debt securities are sought to be listed.
• The debt securities shall carry a credit rating of not less than investment grade from a Credit Rating Agency registered with the Board.
• The company shall appoint a debenture trustee registered with SEBI in respect of the issue of the debt securities.
• The debt securities shall be issued and traded in demat form.
• The company shall sign a separate listing agreement with the exchange in respect of debt securities and comply with the conditions of listing.
• All trades with the exception of spot transactions, in a listed debt security, shall be executed only on the trading platform of a stock exchange.
• The trading in privately placed debts shall only take place between Qualified Institutional Investors (QIBs) and High Networth Individuals (HNIs), in standard denomination of Rs.10 lakhs.
• The requirement of Rule 19(2)(b) of the Securities Contract (Regulation) Rules, 1957 will not be applicable to listing of privately placed debt securities on exchanges, provided all the above requirements are complied with.
• If the intermediaries registered with SEBI associate themselves with the issuance of private placement of unlisted debt securities, they will be held accountable for such issues. They will also be required to furnish periodical reports to SEBI in such format as may be decided by SEBI.

All companies are advised to take note of the above and ensure compliance. Further, the Listing fees applicable for listing of debt securities will be 25% of the fee applicable to listing of equity shares.

The Schedule of Listing Fees for debt segment is a under:

A	Initial Listing fees	Rs.5,000/-
B	Annual Listing Fee:
i)	Companies with paid-up capital upto Rs.5 crores	Rs.2,500
ii)	above Rs.5 crores and upto Rs.10 crores	Rs.3,750
iii)	above Rs.10 crores and upto Rs.20 crores	Rs.7,500
iv)	Companies which have a paid-up capital of more than Rs.20 crores pay additional fee of Rs.200/- for every increase of Rs.1 crore or part thereof.

Yours faithfully

Sanjay Golecha
General Manger
Department of Corporate Services