Describe the salient features of Commercial Paper (CP).

Salient features of Commercial Paper (CP) It is an unsecured Money Market instrument issued in the form of a promissory note and held in physical form or in dematerialized form through any of the depositaries approved by and registered with SEBI. CP is issued at a discount to face value as may be determined by the issuer. The guidelines for issue of CP are issued by the Reserve Bank of India. The Corporates, PDs and all-India financial institutions (Fls) that have been permitted to raise short-term resources under the umbrella limit fixed by the Reserve Bank of India (RBI) are eligible to issue CP. A corporate would be eligible to issue CP provided: the tangible net worth of the company, as per the latest audited balance sheet, is not less than rupees four crore; the company has been sanctioned working capital limit by bank/s or Fls; and the borrowal account of the company is classified as a Standard Asset by the financing bank/ institution. Credit rating for issuance of CP from any one of the SEBI registered Credit Rating Agencies have been obtained. The minimum credit rating shall be 'A3' as per rating symbol and definition prescribed by SEBI. CP can be issued for maturities ranging between a minimum of 7 days and a maximum of up to one year from the date of issue. The maturity date of the CP should not go beyond the date up to which the credit rating of the issuer is valid. CP can be issued in denominations of ₹ 5 lakh and multiples thereof. The amount invested by a single investor should not be less than ₹ 5 lakh (face value). The aggregate amount of CP from an issuer shall be within the limit as approved by its Board of Directors or the quantum indicated by the Credit Rating Agency (CRA) for the specified rating, whichever is lower. The total amount of CP proposed to be issued should be raised within a period of two weeks from the date on which the issuer opens the issue for subscription. Only a scheduled bank can act as an IPA for issuance of CP. CP may be issued to individuals, banking companies, other corporate bodies (registered or incorporated in India) and unincorporated bodies, Non-Resident Indians and Foreign Institutional Investors (FIIs). All OTC trades in CP shall be reported within 15 minutes of the trade to the Fixed Income Money Market and Derivatives Association of India (FIMMDA) reporting platform.