SEBI issues Guidelines for covenant monitoring through DLT

DLT

The Security and Exchange Board of India has issued guidelines for security and covenant monitoring using Distributed Ledger Technology (DLT). The market regulator has given an extension to issuers who have not been able to record the details in the system. On the other hand, the existing outstanding non-convertible issuers must fill in their details in DLT before the end of September.

From April 01 2022, DLT systems shall enable the recording of asset details, allotment, listing and payment of Interest or redemption.

The guidelines state that intending to guarantee the uniqueness of the issuer’s assets that are offered as security, SEBI has infused various parameters into the system for proper validation and duplicate checks depending upon the asset type. The system shall also eliminate duplicate entries for debenture trustees every year.

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