NEW DELHI: The Securities and Exchange Board of India (SEBI) has ordered depositories to design, host, and operate a system that uses distributed ledger technology (DLT), often known as blockchain technology, to record and monitor securities formation as well as non-convertible securities covenants.

The Securities and Exchange Commission using Blockchain Technology

Last November, the markets regulator formed a working group comprised of officials from Sebi, depositories, stock exchanges, and the Trustees Association of India (TAI) to suggest ways to improve the process of security creation, security monitoring, asset cover monitoring, and non-convertible securities covenants.

Sebi has proposed the construction of a platform for security and covenant monitoring system hosted by depositories based on the recommendations. Blockchain technology can be integrated into multiple areas. The primary use of blockchain technology is as a distributed ledger for cryptocurrencies such as bitcoin; there were also a few other operational products that had matured from proof of concept by late 2016.

Security creation, asset cover and covenants, interest and redemption payment of non-convertible securities, credit rating information, and periodical monitoring of security cover, asset cover, and covenants will all be recorded by the system.

Depositories must “provide secure login credentials to issuers, credit rating agencies (CRAs), debenture trustees (DTs), and others for recording and verifying requisite information on the system” and “put in place adequate safeguards to ensure the integrity and security of the data on the system,” according to the directive. They’ve also been told to “exchange information with the other depository for the purpose of integrating and maintaining a compatible system,” according to a Sebi notification sent out on Friday.

Depositories will also need to build an alert system that will be provided to stakeholders for information submission, acceptance, and rejection, as well as notifications for periodic and event-based compliances. 

Furthermore, if the issuer fails to inform the DT(s) of the status of interest payment or redemption amount, the DT(s) will have to inquire of the issuer and/or perform an independent evaluation (from banks, investors, etc.) to ascertain the same.

“Based on such assessment, DT(s) shall update in the system the status of payment of non-convertible securities within seven working days of interest payment becoming due or nine working days of the maturity/ redemption date,” Sebi said.

Source: mint

Microsoft Launches Project Argus To Fight Piracy With Ethereum 

 

Crypto Tax In India Guide

Tax on Cryptocurrency In India – Complete Guide 2022

Wondering how taxation on crypto works in India? How much do you have to pay tax on cryptocurrency in India? How 1% TDS is levied on crypto? Don’t worry we ...
Read More
shutterstock 659324809 1 1U2yg5

New Cryptocurrency Bill Advances to Senate in Brazil

A new cryptocurrency bill was approved by the Chamber of Deputies of the Brazilian Congress last week, and is now awaiting review by the Senate for approval. The project, if ...
Read More
shutterstock 2041962896 6krKZj

USDC Sees Native Launch on Avalanche

USDC, the second leading stablecoin by market cap, has been launched on the Avalanche blockchain as a native token. Previously, users wanting to get USDC in Avalanche had to bridge ...
Read More
zztidodf pkpJUN

Crypto Lender Nexo Launches NFT Lending Desk, Loans up to 20% for Popular NFTs

On December 16, the blockchain-based lending platform Nexo announced the firm has launched a non-fungible token (NFT) lending desk. While the company offered crypto-backed loans using tokens like bitcoin and ...
Read More
ffffffadidas VCTXpR

Adidas Reveals the Originals NFT Collection With Punks Comics, Gmoney, Bored Apes

On Thursday, the German multinational corporation Adidas announced the launch of the company’s first Adidas Originals NFT collection. The Adidas Originals NFT drop is in partnership with the Bored Ape ...
Read More
Share with Others