Explain the changes made by SEBI vide its circular dated 3rd July, 2024 in the provisions pertaining to denomination of issuance and trading of non-convertible securities.

SEBI vide circular dated 3rd July, 2024 modified the relevant clauses of Chapter V of the Master Circular dated May 22, 2024, issued by SEBI which prescribes provisions pertaining to denomination of issuance and trading of non-convertible securities. SEBI vide this circular has made the following changes: This amendment inserts a provision allowing the issuance of debt securities or non-convertible redeemable preference shares at a face value of ₹10,000 on a private placement basis, subject to specific conditions that include the appointment of at least one Merchant Banker, ensuring the security is interest/ dividend bearing with fixed maturity, and allowing various credit enhancements like guaranteed bonds, Standby Letter of Credit (SBLC) backed securities, and others. The amendment permits several credit enhancements to make these securities more attractive to investors. These include guaranteed bonds, partially guaranteed bonds, SBLC backed securities, debt backed by pledges of shares or other assets, and more. Credit Rating Agencies (CRAs) are tasked with verifying the documentation related to these enhancements to ensure they are unconditional, irrevocable, legally enforceable, and that the support provider has a lower probability of default compared to the issuer. For issuers with valid shelf placement memoranda or General Information Documents (GID) as of the effective date of the circular, funds can be raised through trade placement memoranda or Key Information Documents at a face value of ₹10,000, provided due diligence is carried out by a Merchant Banker. Deletion of clauses: The circular deletes clauses 2.1 and 2.2 of Chapter V of the Master Circular, which previously mandated face values of ₹1 lakh and ₹1 crore for listed securities traded on stock exchanges or OTC basis, respectively. Clause 2.3 is modified to state that the trading lot of listed debt securities and non-convertible redeemable preference shares issued on a private placement basis will always be equal to their face value.