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Published on 5 April 2025

SEBI Eases ISIN Restrictions for Debt Securities: Key Updates and Implications

SEBI Eases ISIN Restrictions for Debt Securities

The Securities and Exchange Board of India (SEBI) has issued a circular relaxing ISIN restrictions for issuers wanting to list previously unlisted ISINs that were still outstanding as of December 31, 2023. As stipulated in Regulation 62A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "LODR Regulations"), listed entities must list all non-convertible debt securities issued after January 1, 2024, with an option to list outstanding unlisted ISINs issued before that date.

Overview of the Changes

  1. Regulation 62A Requirements:

    • Listed entities must list all non-convertible debt securities to be issued after January 1, 2024, on registered stock exchanges.
    • They may also opt to list outstanding unlisted non-convertible debt securities issued on or before December 31, 2023.

  2. ISIN Specifications in the NCS Master Circular:

    • Chapter VIII (Specifications related to ISIN for Debt Securities) of the SEBI Master Circular dated May 22, 2024, outlines the ISIN limits for private placements of debt securities, intending to reduce market fragmentation.

  3. ISIN Limits:

    • Clause 1 of Chapter VIII states:
      • A maximum of 14 ISINs can mature in any financial year for issuers of debt.
      • An additional 6 ISINs are allowed specifically for capital gains tax debt securities under Section 54EC of the Income Tax Act, 1961.
      • The breakdown is as follows:
        • 9 ISINs for plain vanilla debt securities (secured and unsecured).
          • If the total amount of these nine ISINs reaches Rs. 15,000 crore, three extra ISINs can mature, pending notification to stock exchanges.
        • 5 ISINs for structured and market-linked debt securities.
      • If only structured/market-linked debt securities are issued, up to 9 ISINs may mature in a financial year.
      • All ISINs for debt securities issued after April 1, 2023, must adhere to these limits.
      • This threshold will be reviewed regularly to mitigate corporate bond market fragmentation.

Exclusion of Grandfathered ISINs

  1. To promote the listing of outstanding grandfathered unlisted ISINs, any unlisted ISINs outstanding as of December 31, 2023, that are converted to listed ISINs under Regulation 62A will not count against the maximum ISIN limit specified in Clause 1 of Chapter VIII of the NCS Master Circular.

  2. New Addition to NCS Master Circular:

    • Clause 4A has been added to Chapter VIII:
      • “Unlisted ISINs outstanding as of December 31, 2023, which are converted to listed ISINs pursuant to Regulation 62A(2) of the LODR Regulations, shall be excluded from the maximum limit of ISINs maturing in a financial year.”

Purpose of the Circular

  1. This Circular is issued in line with powers granted under Section 11(1) of the Securities and Exchange Board of India Act, 1992, along with Regulation 55(1) of the SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021, to protect investors and promote the regulation and development of the securities market.
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