SEBI Consultation paper on review of SEBI (SDI) Regulations, 2008

SEBI has issued a Consultation paper on review of SEBI (Issue and Listing of Securitized Debt Instruments and Security Receipts) Regulations, 2008.

SDI – Securitization is a process in which assets / receivables are pooled together and then re-packaged into pass through instruments. The cash flow from these underlying assets / receivables is passed on to the purchasers / investors in the pass through instruments.

The propositions from the consultation paper address several critical areas:

1   Form of Issuance – The SDI shall be issued in the demat form.

2   Ticket Size – The minimum size of investment by a single investor whether at the time of initial subscription or subsequent purchase of SDI shall be:

• For scheduled and commercial banks (excluding regional rural banks), small finance banks, NBFCs including HFCs and All-India Term Financial Institutions) – Specified by RBI from time to time (currently specified as Rs. 1 Crore).
• For Organizations that are not regulated by RBI and are undertaking securitization – RS. 1 crore.
• For SDIs with underlying that are listed securities, the amount shall be at least the face value specified for such listed securities.

3   Number of investors –

• Private placement – The maximum number of investors is 200 (offer made to QIB shall be excluded).
• Public issue – The number of investors must exceed 200.

4   Updating offer period for SDIs – Public offer can be kept open for –

• Minimum days – 3.
• Maximum days – 10.

5   Minimum risk retention (MRR) –

• Normal MRR – 10%.
• For transactions where receivables have a scheduled maturity up to 24 months – 5%.

6   Clean-up call option – Maximum of 10% of the original value of the underlying.

7   Liquidity facilities – Originators may either directly provide liquidity facilities or appoint an independent third party to do so. These facilities help manage timing differences encountered by a special purpose distinct entity (SPDE) between receiving cash flows from underlying assets and making payments to investors. Such facilities should comply with the applicable norms as specified periodically.

8   Trustee – Only SEBI registered Debenture Trustee can be appointed as Trustee of SPDE. Removal of the Trustee and duties of the Trustee shall also be amended.

9   Disclosure Requirements: The updated disclosure guidelines require semi-annual reporting and ongoing rating updates for investors. These updates aim to provide investors with timely information on SDIs, supporting informed decision-making.

10  Clarificatory Changes and Legislative References: Proposed amendments also involve revising definitions within the regulations, eliminating outdated references to the Monopolies and Restrictive Trade Practices Act, 1969, and aligning them with the Companies Act, 2013, and the Competition Act, 2002.

Government Invites Public Feedback on Draft Amendments for Renewable Energy Procurement

The Ministry of Power (MoP) is seeking public input on proposed amendments to its Guidelines for the Tariff-Based Competitive Bidding Process for procuring power from renewable energy projects. These projects encompass solar, wind, wind-solar hybrids, and renewable energy with energy storage systems.

Key Proposed Changes –

1. Connection Points: The Request for Proposals (RfS) may now specify sub-stations within the Integrated National Transmission System (ISTS) or Intra-State Transmission System (InSTS) to which developers must connect their projects.
2. PPA Term: The standard Power Purchase Agreement (PPA) term for renewable projects is proposed to be reduced from 20 years to 15 years, with an option for longer terms of up to 25 years.
3. Supply Obligation: The minimum period a generator (renewable project) must be available to meet its supply obligations may be reduced from 3 consecutive years to a period specified in the RfS, allowing for potential disruptions outside the generator’s control.
4. Default and Compensation: If a generator does not meet the minimum availability requirement, procurers may choose to either lower the availability with compensation or declare it a default, potentially terminating the PPA.
5. Automatic Weather Stations: Developers may be required to install and maintain Automatic Weather Stations (AWS) according to government agency standards.
6. Technical Compliance: Proposed amendments require projects to comply with the latest central government cybersecurity regulations.
7. Insurance Surety Bonds: Bidders may be allowed to use Insurance Surety Bonds as an alternative to Bank Guarantees for Earnest Money Deposits and Performance Bank Guarantees.

Public Participation –

Stakeholders are invited to submit comments on these proposed amendments by November 15, 2024, via email to nre.section-mop@gov.in 

Affected Guidelines –

These amendments apply to the following guidelines:

1. Guidelines for Tariff-Based Competitive Bidding Process for Procurement of Firm and Dispatchable Power from Grid-Connected Renewable Energy Power Projects with Energy Storage Systems.
2. Guidelines for Tariff-Based Competitive Bidding Process for Procurement of Power from Grid-Connected Solar PV Power Projects.
3. Guidelines for Tariff-Based Competitive Bidding Process for Procurement of Power from Grid-Connected Wind-Solar Hybrid Projects.
4. Guidelines for Tariff-Based Competitive Bidding Process for Procurement of Power from Grid-Connected Wind Power Projects.

FSSAI Widens the Powers of its Adjudicating Officers

The Government of India has introduced amendments to the Food Safety and Standards Rules, 2011, expanding the authority of Adjudicating Officers in handling offences under the Food Safety Act, 2006. These changes were officially announced on October 30, 2024, through the Food Safety and Standards (Amendment) Rules, 2024.

Under the new rules, Adjudicating Officers are now empowered to conduct inquiries and adjudicate specific offences, including:

1. Providing false information
2. Conducting business without a license

Previously, these offences were not within the adjudicating officers’ purview.

Role of an Adjudicating Officer – 

An Adjudicating Officer is an official not below the rank of Additional District Magistrate in the district where the alleged offence occurred, as designated by the State Government. The officer holds the powers of a civil court, and proceedings before the officer are considered judicial, with the officer recognized as a court in such matters.

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