October 12, 2020
Summary of the Notification issued by SEBI & Circular Issued by IBBI
1. SEBI notifies LODR (Third Amendment) Regulations, 2020
SEBI vide its notification dated October 8, 2020 has taken enhanced measures towards securing the interests of Debenture Holders. The key highlights are:
- Mandating a minimum of 100% asset cover or asset cover as per the Information Memorandum/Offer Document/Debenture Trust Deed which shall be sufficient to discharge the principal amount at all times
- An asset cover certificate by the statutory auditor as against practicing chartered accountant shall be submitted on an half yearly basis.
- Norms for disclosures, asset cover maintenance have been strengthened for Banks & NBFCs
These amendments are in sync with SEBI’s attempt to empower Debenture Trustees & to secure the interest of Debenture holders by making related amendments to Debenture Trustee Regulations & ILDS Regulations.
2. IBBI Issues Circular to bring in uniformity with regard to Meetings of the Disciplinary Committee and Appellate Panel of the RVOs
The key highlights of the circular are:
- Meetings should be held only if there is an agenda for the meeting.
- Meetings are to be held preferably, through an appropriate Video Conferencing (VC) facility, keeping in view the current pandemic;
- One week’s notice is to be given to all the members for holding any meeting and notice for the same is to be sent through email;
- The minutes shall be signed by the members of the committee present during the meeting;
- The quorum for the meeting should be as provided in the Bye laws of the RVO but should be a minimum of two members including the Chairperson and;
- If a member of the committee is related to the person against whom action is proposed, or there is any other issue of conflict of interest, the member shall recuse himself/herself from the proceedings.
This Notification and Circular is integrated in our free to use website www.ca2013.com for your easy reference.