SEBI vide notification dated 16th October, 2024 introduced Liquidity Window Facility for investors in debt securities through Stock Exchange Mechanism. Explain Liquidity Adjustment Facility. What are the features and con

Liquidity Window Facility for investors of debt securities through Stock Exchange Mechanism SEBI vide circular dated 16th October, 2024 introduced Liquidity Window Facility for investors in debt securities through Stock Exchange Mechanism. It allows investors holding listed debt securities to sell them back to issuers using a put option on specific dates ensuring liquidity. It is felt that establishing a framework of providing liquidity window facility by the issuers through use of put options exercisable on pre specified dates or intervals will provide uniform norms for such issuer(s) to consider adopting liquidity window facility in the manner specified. The provisions of this circular shall be applicable w.e.f 1st November, 2024. The circular inter alia covers the following features and conditions governing the Liquidity Window Facility: Issuer Direction and Prospective applicability: Liquidity Window can only be provided at the discretion of the issuer. Further this option is available only for future issues either by public or by private placement. Eligible Securities: All listed debt securities governed by SEBI NCS Regulations are eligible for this facility. Prior approval of the Board of Directors of the issuing company is required for providing liquidity window. Stakeholders' Relationship Committee (SRC): For entities which have listed their specified securities, the implementation and the outcome of the liquidity window shall be monitored by the SRC. However for the entities which only have listed debt securities (for whom constitution of SRC is not mandatory), the monitoring of the implementation and monitoring of the liquidity window shall be under the aegis of board of directors, or such board level committee. Eligible Investors: Issuers have the option to specify the class of investors who can be provided the said facility. Minimum holding period: Investors can exercise the option only after the expiry of one year from the date of issue. Period of the Liquidity window: The issuer shall keep the window open for a minimum three working days. The facility can be provided for a monthly or quarterly basis, but the facility details shall be provided upfront in the offer documents. Reporting and disclosure requirements: After the closure of a liquidity window, the issuer is required to submit a report to the stock exchanges on which the securities are listed. However, the form and manner of such disclosures are to be specified by the stock exchanges in consultation with SEBI.