SEBI adds Definition of Environment, Social, and Governance (ESG) Debt Securities, Updates Non-Convertible Securities Regulations [Read Notification]

The Securities and Exchange Board of India ( SEBI ) has inserted the definition of Environment, Social, and Governance ( ESG ) Debt Securities into the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021.

The key change includes the addition of a definition for Environment, Social, and Governance (ESG) Debt Securities. ESG Debt Securities now include green debt securities, social bonds, sustainability bonds, sustainability-linked bonds, and any other types of bonds issued in accordance with international frameworks tailored to Indian requirements as specified by SEBI.

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In the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021,

• in regulation 2, in sub regulation (1), after clause (o), the following shall be inserted, namely, – “(a) Environment, Social and Governance Debt Securities or “ESG Debt Securities” means green debt securities, social bonds, sustainability bonds, sustainability-linked bonds, or any other type of bonds, by whatever name called, that are issued in accordance with such international frameworks as adapted or adjusted to suit Indian requirements that are specified by the Board from time to time, and any other securities as specified by the Board.”

In line with these changes, SEBI has introduced Regulation 12A, which outlines that issuers seeking to issue and list ESG Debt Securities must comply with conditions specified by the Board.

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Additionally, Regulation 26 has been omitted, and changes have been made to Schedule I. Specifically, the word “trustees” has been removed from paragraph 3.3.31, and paragraph 3.3.32 has been updated to require the disclosure of the names of debenture trustees, along with a statement confirming their consent to appointment and a copy of the agreement with the issuer, accessible via a web link or a static QR code in the issue document.

If the issuer files a general information document or shelf prospectus, they may provide a letter of consent from the debenture trustee instead of the agreement.

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