has proposed raising the threshold for identifying high value debt-listed entities (HVDLE) by five times to an outstanding value of ₹5000 crore, while also relaxing other corporate governance and related party norms for smaller issuers.
These are part of its measures to align corporate governance norms for HVDLE with that prescribed for equity-listed entities, according to the consultation paper on the issue.
At present entities that have outstanding debt of Rs 1000 and above are classified as HVDLE. Market participants have represented that NBFCs usually reach this threshold within a few months, and they are borrowing far larger amounts.
This subjects smaller entities, raising such amounts to high compliance costs.
By raising the threshold the number of HVDLEs will be reduced to 48 from 137 now, Sebi said, effectively reducing 64 per cent entities from the current norms.
Relaxation have also been proposed by the regulator with respect to shareholder approval for director appointments and nominee directors appointed by courts and tribunals.
A key proposal made by the regulator suggests omitting the requirement of disclosing material transactions with related parties along with the periodic compliance of the HVDLE, since that provision exists under the listing obligations and disclosure requirements.
The consultation paper has also proposed harmonising recent related party transactions norms approved for equity-listed entities with that for debt-listed entities, while retaining existing safeguards for debenture holders.