How is the day count dealt with under SEBI (Issue and Listing of Debt Securities) Regulations, 2018, in normal situation and in case of a leap year? In the light of the above convention explain the following situation: D

Answer 2A(i) SEBI has provided certain clarifications on aspects related to day count convention for debt securities issued under the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (read with the master circular) as follows: If coupon payment date falls on a holiday, the payment may be made on the following working day. However, the dates of future coupon payments would be as per the schedule originally stipulated at the time of issuing the security. In other words, the subsequent coupon schedule would not be disturbed merely because the payment date in respect of one particular coupon was postponed earlier because it fell on a holiday. In order to ensure consistency for interest calculation, a uniform methodology shall be followed for calculating interest payments in case of leap year, which shall be as follows: During a leap year, the number of days shall be reckoned as 366 for the whole one-year period irrespective of whether interest is payable annually, half yearly, quarterly or monthly. Hence if the periodicity is half yearly, 366 days would be reckoned twice as denominator, for quarterly interest, it would be four times and for monthly interest payment, twelve times. In the above example, since 2024 is a leap year and as the interest is payable quarterly, 366 would be reckoned four times as denominator.