The National Commission on Securities and Stock Market has approved the Regulations that detail the procedure for the issuance of corporate bonds and their subsequent circulation in the market. The main provisions of these Regulations include the following aspects:
- Definitions of terms and general conditions for the issuance of corporate bonds: The Regulations begin with clear definitions of key terms such as “corporate bonds,” “issuance,” “epicenter,” ensuring the unequivocal interpretation of the document. General criteria are established that companies must meet to conduct a bond issuance, including financial stability, transparency of activities, and compliance with market requirements.
- Establishment of registration requirements for bond issues, approval of prospectuses, and reports on issuance results: For the official issuance of bonds, the company must undergo a registration procedure that includes submitting a detailed issuance prospectus. The prospectus must contain information about the issuer’s financial condition, the terms of issuance and redemption of bonds. After a successful issuance, the company is required to submit a report on the results of the issuance, allowing regulatory authorities to monitor compliance with the terms of issuance stated in the prospectus.
- Regulation of the bond redemption process, including the possibility of early redemption: The Regulations detail the procedures and timelines for bond redemption, specifying when and how the issuer is obligated to return the principal amount and interest to investors. The possibility of early redemption of bonds is also provided, which can be executed under certain conditions, such as the presence of financial reserves or changes in the company’s financial policy.
- Conditions for the issuance of green and infrastructure bonds, including requirements for financing environmental projects: For the issuance of special categories of bonds, such as green or infrastructure bonds, additional requirements are established. Companies must confirm that the funds raised will be directed to environmental or infrastructure projects, in accordance with defined standards. This includes submitting detailed financing plans and reporting on the use of funds.
- Procedures for making amendments to decisions regarding bond issuance and prospectuses: If there is a need to change the terms of issuance or the information in the prospectus, the Regulations provide a clear procedure for making such amendments. This includes obtaining approval for the changes from regulatory authorities and notifying investors of the updated information.
- Requirements for documents to be submitted for registration and reporting: Companies issuing bonds must provide a number of documents for the registration of the issuance and subsequent reporting. This includes financial reports, prospectuses, reports on the results of issuance, and other necessary materials that ensure transparency and compliance with the regulator’s requirements.
- Monitoring compliance with the terms of issuance and circulation of bonds is the responsibility of the NCSMC: The National Commission on Securities and Stock Market is responsible for overseeing compliance with the established terms of issuance and circulation of bonds. This includes checking submitted documents, monitoring the use of raised funds, and ensuring transparency in the securities market.
These Regulations come into effect on November 1, 2024, marking the beginning of their operation and the mandatory execution of the established requirements for all participants in the corporate bond market.
The following act regulates the procedure for the conversion of corporate bonds, which includes several key aspects:
- Procedure for notifying bondholders: The issuer is obliged to provide clear and timely notice to bondholders of the intention to convert their bonds. This notice must contain all necessary information regarding the conditions and timelines for conversion.
- Conducting meetings for consent to conversion: Prior to conducting the conversion, it is necessary to organize meetings of bondholders to obtain their consent. Procedures for conducting such meetings are established, including quorum and the required majority of votes for decision-making.
- Redemption timelines for bonds: The act specifies the exact timelines within which the issuer must redeem the bonds after obtaining the consent of the holders. This ensures that the conversion process occurs in a timely manner.
- Document requirements to be submitted by the issuer: For successful conversion, the issuer must submit a specific package of documents to the NCSMC, including protocols of meetings with bondholders, updated prospectuses, or contracts reflecting the new terms of the bonds after conversion.
- Conditions for replacing the issuer: If there is a need to replace the issuer of the bonds, the act stipulates that such a replacement is only possible with the consent of the bondholders. The procedure includes obtaining written consent and submitting the relevant documentation to the National Commission for approval.
- Procedures for halting the circulation of bonds in case of liquidation or bankruptcy of the issuer: In the event of liquidation or bankruptcy of the issuing company, clear procedures are established for halting the trading of bonds. This includes notifying investors, suspending trading, and determining the order of debt obligations repayment.
- Procedure for cancellation of registration of the bond issue: The act specifies the conditions under which the registration of the bond issue may be canceled. This may occur, for example, in the event of non-compliance with issuance conditions or significant changes in the issuer’s financial condition.
- Requirements for the use of funds raised through green bonds: For bonds issued with the purpose of financing environmental projects, special requirements for transparency and reporting on the use of raised funds are established. The issuer must confirm that the funds will be directed specifically to environmental initiatives, in accordance with defined standards.
- Content of the verifier’s report: Upon completion of the conversion process or the use of funds from green bonds, the issuer is obligated to prepare a report that is verified by an independent verifier. This report must contain a detailed description of the use of funds and confirmation of compliance with established requirements.
These provisions ensure transparency and protect the interests of corporate bondholders, regulating all stages of conversion and changes in the bond issuance structure, as well as establishing mechanisms for monitoring compliance with environmental standards in the case of issuing specialized bonds.
