SEBI wants companies to give full security cover for listing of bonds

The Securities and Exchange Board of India (SEBI) has made it mandatory for companies seeking listing of corporate bonds and other debt instruments to maintain 100 per cent security cover for them at all times.

Both listed and unlisted companies raising funds from the market will have to keep 100 per cent security cover for the listed debt instruments, the market regulator said while issuing the guidelines for listing agreement for debt securities.

The issuer, SEBI said,  will have to ''create and maintain security ensuring 100 per cent security cover for listed secured debt securities at all times and ensure that charges on the assets are registered.'' 

While listed companies will have to make minimal disclosure while seeking listing of debt instruments, the unlisted companies will be required to provide detailed disclosures, SEBI said.

A company already listed on the stock market will have to make ''minimal incremental disclosures related to the debt security' as much of the  information about the company is already in public domain.

Corporate bonds, government bonds, certificate of deposits, municipal bonds and other non-convertible debt instruments etc come under the debt instruments category.