The Securities and Exchange Board of India (SEBI) has put in place an operational framework allowing transactions in defaulted debt securities, besides prescribing obligations of the issuers, debentures trustees, stock exchanges and depositories, while permitting such transactions.As per the order on June 23, exchanges, depositories and debenture trustees are to install necessary systems and infrastructure for implementation of this framework by June 29. The new guidelines would be enforced from July 1. The move comes after the market participants and investors made representations to SEBI that debt securities transactions must be allowed where the redemption amount has not been paid on maturity or redemption date.As per existing practise, the exchanges suspend trading or reporting of trades on debt securities before the redemption date. Further, depositories impose a restriction on off-market transfers on redemption date that restricts transfers on and after the redemption date.

(Moneycontrol)