SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 – Amendment February 03, 2023

SEBI inter alia puts timeline for appointment of nominee director on recommendation from debenture trustee.


Regulation no.

Nature of amendment



Regulation 18(6A) – 

Trust Deed 


Timeline prescribed for appointment of Director nominated by Debenture Trustee – Amendment to Debenture Trust deed mandated in all cases:

As per existing Regulation 24, the debenture trustee shall have powers to appoint nominee director on the board of directors of the issuer to protect the interest of debenture holders. 


SEBI has now mandated issuers to ensure that debenture trust deed shall contain a provision, mandating the issuer to appoint the person nominated by the debenture trustee(s) as a director on its Board of Directors at the earliest and not later than one month from the date of receipt of nomination from the debenture trustee(s). 


Further such Issuers whose debt securities are already listed have been mandated to amend the trust deed to incorporate the above provision on or before September 30, 2023. 



Regulation 23(6) and (7) – Obligation of the issuer 


Review of Articles of Association by issuer companies by September 30, 2023: 

If an issuer is a company, it shall ensure that its Articles of Association has a provision that requires its Board of Directors to appoint the person nominated by the debenture trustee(s) as a director on its Board of Directors. 


For existing issuers whose debt securities are outstanding and listed as on date of this amendment have been mandated to amend its Articles of Association, if necessary to comply with this provision, on or before September 30, 2023


Defaulters in payment of interest or principal: The issuer, which is in default of payment of interest or repayment of principal amount in respect of listed debt securities, shall appoint the person nominated by the debenture trustee(s) as a director on its Board of Directors, within one month from date of receipt of nomination from the debenture trustee or February 3, 2023 (i.e. date of publication of amendment in official gazette), whichever is later. 



Regulation 15(6) and (7) – right to recall or redeem prior to maturity 


The manner of sending notice to eligible holders of non-convertible securities and debenture trustees regarding right to recall or redemption before maturity has been specifically prescribed now, i..e. it needs to be sent through soft copy to those who have registered their email id and hard copy to those who have not registered their email id, with the listed entity or with depository. 


Further requirement of publishing this notice is English and regional national daily newspapers is done away with.



Regulation 2(1)(q) – 

Definition of Green Debt Security 

Addition of new clauses 

For following categories of projects and/or assets, funds can be raised through issue of green debt security as below clauses:


(iii) Climate change adaptation has been elaborated to include efforts to make infrastructure more resilient to impacts

of climate change and information support systems such as climate observation and early warning systems


(viii) pollution prevention and control (including reduction of air emissions, greenhouse gas control, soil remediation, waste prevention, waste reduction, waste recycling and energy efficient or emission efficient waste to energy) and sectors mentioned under the India Cooling Action Plan launched by the Ministry of Environment, Forest and Climate Change, 


(ix) circular economy adapted products, production technologies and processes (such as the design and introduction of reusable, recyclable and refurbished materials, components and products, circular tools and services) and/or eco efficient products,


(x) blue bonds which comprise of funds raised for sustainable water management including clean water and water recycling, and sustainable maritime sector including sustainable shipping, sustainable fishing, fully traceable sustainable seafood, ocean energy and ocean mapping,


(xi) yellow bonds which comprise of funds raised for solar energy generation and the upstream industries and downstream industries associated with it,


(xii) transition bonds which comprise of funds raised for transitioning to a more sustainable form of operations, in line with India’s Intended Nationally Determined Contributions. 

Explanation: Intended Nationally Determined Contributions (INDCs) refer to the climate targets determined by India under the Paris Agreement at the Conference of Parties 21 in 2015, and at the Conference of Parties 26 in 2021, as revised from time to time.


The language of the definition is modified to the effect that SEBI shall be prescribing conditions for raising of funds by issue of green debt security. The language of the definition prior to this amendment was suggesting that SEBI may be prescribing conditions for utilization of funds raised for project(s) and / or asset(s) falling under the categories prescribed in the definition. 



Reg 33A – Period of Subscription 

Newly added 

SEBI has now prescribed that in case of public issue of debt securities or, non-convertible redeemable preference shares, the offer shall be kept open for a minimum of three working days and a maximum of ten working days. 


In case of revision of price band or yield, extension of bidding (issue) period shall be done for minimum of three working days but the overall bidding (issue) period shall not exceed beyond 10 working days. 


In case of force majeure, banking strike or similar circumstances, the issuer may, for reasons to be recorded in writing, extend the bidding (issue) period disclosed in the offer document but not beyond maximum bidding (issue) period of 10 working days.




Reg 50 General Conditions

Newly added 

Regulation 50 prescribes conditions for issuance and listing of issue perpetual debt instruments, perpetual non-cumulative preference shares and instruments of similar nature forming part of non-equity regulatory capital as per the guidelines prescribed by RBI or and/or any other relevant laws applicable to them. 

Now designated stock exchange are empowered to collect regulatory fee from an issuer of perpetual debt instruments, perpetual non-cumulative preference shares and similar instruments at the time of their listing. 



Clause 1


Clause 1 of Schedule VI to the NCS Regulations, inter alia, prescribes the  fees to be paid, to the Board along with draft offer document, by the lead manager. In terms of regulation 13 (1) of  the     NCS  Regulations,  the     obligation  for payment of fees lies upon the issuer which is desirous of making a public issue  of     debt  securities  and/     or  non-convertible redeemable  preference shares, and not on the merchant banker. Hence clause 1 is substituted in order to bring this clarity.