Virtual Conference on Impact of RBI’s Moratorium on PTC Transactions
The Agenda and details of the Video Conference:
Brief note on the Video Conference:
Presentation used in the Video Conference:
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Subsequent to our meeting, on 223rd April, SEBI has issued a circular, [https://www.sebi.gov.in/legal/circulars/apr-2020/review-of-provisions-of-the-circular-dated-september-24-2019-issued-under-sebi-mutual-funds-regulations-1996-due-to-the-covid-19-pandemic-and-moratorium-permitted-by-rbi_46549.html] saying the following: “Accordingly, based on assessment, if the valuation agencies appointed by AMFI areof the view that the delay in payment of interest/principalor extension of maturity of a security by the issuerhas arisen solely due to COVID-19 pandemic lockdown and/or in light of the moratorium permitted by Reserve Bank of India (RBI) (vide notification no. RBI/2019-20/186, dated March 27, 2020) creating temporary operational challenges in servicing debt, then valuation agencies may not consider the same as a default for the purpose of valuation of money market or debt securities held by Mutual Funds.”
Hence, the entire issue now stands resolved.
I am curious to know how it is practically possible to get approval of all PTC holders particularly when there are many HNI investors.
Typically the terms of issuance will provide for a voting mechanism – say, 75% votes in value. If that voting threshold is not obtained, then, unfortunately, the restructuring cannot be done.
Sure