SEBI Issues Master Circular to Streamline Disclosure and Compliance in Debt Markets

The Securities and Exchange Board of India (“SEBI”) issued a comprehensive Master Circular (“Master Circular”) dated July 11, 2025, consolidating the listing obligations and disclosure requirements for listed Non-Convertible Securities (“NCS”), Securitised Debt Instruments (“SDI”), and Commercial Paper (“CP”). This new regulatory framework replaces multiple earlier circulars and clarifications, providing a single, uniform reference point for issuers, exchanges, investors, and market professionals. The initiative is aimed at improving compliance, reducing duplication, and enhancing transparency and investor protection in the growing Indian debt market.

The Master Circular introduces a new standard for financial disclosures. Listed entities are now required to disclose quarterly standalone and annual consolidated financial results, along with half-yearly statements of assets and liabilities and cash flow statements. These disclosures must follow formats aligned with the Companies Act, 2013, and include detailed financial metrics such as key ratios, types of secured debt, and any changes in accounting principles. Importantly, all such disclosures must be accompanied by a Limited Review Report or an audit report from an independent statutory auditor, ensuring a higher degree of credibility and transparency.

SEBI has also mandated detailed disclosure in cases where auditors have issued qualifications or reservations. In such instances, companies must now provide a quantitative assessment of the impact on earnings, assets, or other financial indicators. This measure enhances accountability and allows investors to make more informed decisions, especially in cases where financial concerns are raised by independent auditors.

The circular further addresses the use of capital raised through debt instruments. Issuers are required to publicly disclose the utilisation of such funds and highlight any deviations from the stated purposes. In addition, any defaults on interest or principal payments must be promptly and thoroughly reported.

For complex instruments such as SDIs and CPs, the circular introduces uniform disclosure requirements. SDIs, which involve pooling of receivables like home loans and converting them into tradable securities, and CPs, which are unsecured short-term instruments used by companies to manage liquidity, will now be subject to the same rigorous reporting norms.

This Master Circular is a significant step toward a more transparent and efficient debt market in India. Issuers and stakeholders are advised to update their compliance protocols accordingly to align with the new regulatory framework.