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CS Professional · IFSCA - Regulations, Listing and Compliances · Listing and Issuance of Securities

Kaveri Power Ltd has listed bonds at an IFSC exchange. Six months later it defaults on an interest payment due to bondholders. What is the correct compliance step?

Kaveri must promptly disclose the interest default to the exchange as a material event. Listed debt issuers have continuing disclosure obligations, so waiting for the annual report or maturity, or telling only the trustee, would be non-compliant.

  1. ANo disclosure is needed until the next annual report
  2. BInform only the debenture trustee, not the exchange
  3. CDisclose the default promptly to the exchange as a material event under continuing listing obligationsCorrect
  4. DWait until the bonds mature before reporting any default

Explanation

A listed issuer must make timely disclosure of material events, including payment defaults, to the exchange. Delaying until the annual report, maturity, or informing only the trustee would breach continuing obligations.

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