proposed to be listed debt securities would have to deposit 0.01% of the issue size or maximum of Rs 25 lakh towards creation of recovery expense fund.
“In order to enable the debenture trustees to take prompt action for enforcement of security in case of default in listed debt securities, a ‘Recovery Expense Fund’ (REF) shall be created which shall be used in the manner as decided in the meeting of the holders of debt securities,” Sebi said in a circular.
In the event of default, the debenture trustee would have to obtain consent of holders of debt securities for enforcement of security from the stock exchange.
The balance in the recovery expense fund should be refunded to the issuer on repayment to holders of debt securities on their maturity or at the time of the exercise of call or put option, for which a No Objection Certificate (NOC) should be issued by the debenture trustee to the stock exchange, sebi said.
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