The Securities and Exchange Board of India has tightened rules for fresh issues of additional tier-1 securities issued by banks, restricting retail investors from investing in such instruments.
The restrictions follow the Yes Bank Ltd. episode where AT-1 securities were written-off at the time a scheme of reconstruction was approved for the lender, catching a large number of retail investors off-guard.
In a circular dated Oct.6, the capital market regulator detailed the following rules:
- The issuance of AT-1 instruments shall be done mandatorily on the electronic book provider platform irrespective of the issue size.
- Issuers and stock exchanges will ensure that only qualified institutional buyers are allowed to participate in the issuance of AT-1 instruments.
- The minimum allotment of AT-1 instruments shall not be less than Rs 1 crore.
- The minimum trading lot for AT-1 instruments shall be Rs…
