Electronic book mechanism for issuance of debt securities on private placement basis

SEBI has issued a Circular No. CIR/IMD/DF1/48/2016 dated April 21, 2016 and related FAQs on Electronic Book Mechanism, wherein the use of an Electronic Book Mechanism (EBM) has been made mandatory from July 01, 2016 for issuance of debt securities on private placement basis in the primary market with an issue size of Rs. 500 crores and above, inclusive of the green shoe option. However, where the issue size is below Rs. 500 Crores (inclusive of green shoe option) in  a financial year, the use of an EBM is voluntary, i.e., the issuer have an option to continue with the existing mechanism (i.e., without EBM), subject to providing the relevant details in SEBI prescribed format to the EBP provider. 

The threshold of Rs. 500 Crores is calculated either individually or in case of multiple trance(s) under a shelf offer or the multiple issue(s) in a financial year, and they are individually less than Rs. 500 Crores, yet aggregate to or crosses Rs. 500 Crores in a financial year. In such scenario, issuer shall use EBP mechanism for any incremental private placement which takes aggregate issue size in the year equal to Rs.500 crore or above (inclusive of green shoe option).  Please refer the below tabulation:

Electronic book mechanism
Compulsory	Voluntary
Issue Size: Rs. 500 Crores and above	Issue Size: Below Rs. 500 Crores
-       Mandatory for all private placements of debt securities in primary market with an issue size of Rs.500 crore and above. This shall include green shoe option, if any.	-  Voluntary for private placements of debt securities which are below Rs.500 crore in a financial year and such issues which have a single investor and where the coupon rates are fixed.
-    Also applicable for those tranche issue(s) which individually may be less than Rs.500 crore, however is/ are part of a shelf offer, which including green shoe option, is more than Rs 500 crore in a financial year.	Important – Reporting Requirement Issuer shall compulsory to upload details of allotment to the Electronic Book Provider and/ or to the information repository for corporate debt market as notified by SEBI, in the format as specified. The issuer shall disclose the coupon, yield, amount raised, and number of investors and category of investors (Clause 4.2 of SEBI EBP Circular)
-   In case of multiple issues in a financial year, which are individually less than Rs.500 crore however, the aggregate issue size in the same year crosses Rs.500 crore, in such scenario, issuer shall use EBP mechanism for any incremental private placement which takes aggregate issue size in the year equal to Rs.500 crore or above.

Please refer the SEBI Circular and related FAQs for detailed guidelines on Electronic book mechanism for issuance of debt securities on private placement basis:

Download Link:

Sr. No.	Circular No.	Particulars
1.	CIR/IMD/DF1/48/2016 dated April 21, 2016	Electronic book mechanism for issuance of debt securities on private placement basis April 21, 2016
2.	FREQUENTLY ASKED QUESTIONS (FAQs)	FAQs on SEBI Circular No. CIR/IMD/DF1/48/2016 dated April 21, 2016 with regards to Electronic book mechanism for issuance of debt securities on private placement basis.