SEBI: Blockchain to Be Used for Debenture Issuance

SEBI has notified the operational guidelines for distributed ledger technology (DLT) used for blockchains to monitor debt instruments.

The key participants are the issuers and intermediaries such as debenture trustees and credit rating agencies under the DLT system.

The adoption of distributed ledger technology with unique asset IDs will improve transparency.

As the information will be in a distributed, permissioned ledger, the advantage is authorised participants are essentially creating ledger entries.

They will also be involved in adding new blocks to the chain of existing information using cryptography.

The data asymmetry in lending transactions is addressed via information covenants in the underlying transaction documents.

Source: Bloomberg Quint