Sebi mandates addl disclosure for issuers of transition bonds

New Delhi: To facilitate transparency and informed decision-making among the investors, markets regulator Sebi on Friday mandated additional requirements for the issuance and listing of transition bonds.

The move is also aimed at ensuring that the funds raised through transition bonds are not being misallocated, the Securities and Exchange Board of India (Sebi) said in a circular. Transition bond is one of the sub-categories of 'green debt security'. These bonds are generally used for raising funds for transitioning to a more sustainable form of operations in line with India's intended nationally determined contributions.

In its circular, Sebi said that an issuer wishing to issue transition bonds will have to make additional disclosures in the offer document for public issues or private placements of such transition bonds. To differentiate transition bonds from other categories of green debt security, the issuer of transition bonds will have to use a denotation 'GB-T'. Such denotation would be disclosed in the offer documents on the cover page and in the type of instrument field in the term sheet.