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PROCESS FLOW FOR ISSUANCE OF COMMERCIAL PAPERS (CP) IN DEMAT FORM

• Send the letter of Intent conveying the intent to issue CP in dematerialised form. Sign a tripartite/bipartite agreement with NSDL. If the company has admitted any of its securities in NSDL (shares, debentures, etc.) and wishes to appoint the same R & T agent for CP also, then the company need not sign a tripartite agreement. Enclose a Demand Draft/ cheque drawn in favour of "National Securities Depository Limited" payable at Mumbai for ₹10,000 plus applicable taxes as fees towards processing of 5 (five) normal corporate actions of CP. On receipt of the above documents, NSDL will allot the ISIN for the security and the same will be communicated to the Issuer.
• Atleast three working days before the value date (the date on which the CP will be credited in the subscriber's account) send the duly completed Master Creation Form (MCF) to NSDL. The ISIN will be activated on the same day.
• Co-ordinate with the R& T agent for execution of the Corporate Action. The Corporate Action has to be executed atleast one day prior to the value date. In case issuer wishes to execute corporate action on the value date, issuer need to pay additional corporate action fees of ₹1000 plus applicable taxes as special processing charges apart from aforesaid CA fees.
• The following documents / details are required by NSDL for the execution of the corporate action.
  • Request to NSDL to credit CP in IPA's CP Allotment Account alongwith Corporate Action Information
  • IPA certificates to Investors and NSDL.
  • Letter of Offer
• On execution of the Corporate Action the IPAs account will be credited with the securities (CP).

PROCESS FLOW FOR REDEMPTION AND EXTINGUISHMENT OF CP FROM BENEFICIAL OWNER'S ACOUNTS

• Issuer needs to authorise the IPA to make redemption payment based on the beneficial ownership position (benpos) report received through the Registrar and Transfer (R&T) agent from NSDL and extinguish CPs from beneficial owner's accounts.
• The IPA will need to submit a request to NSDL to carry out the corporate action for extinguishment of CP from beneficial owner's accounts on redemption of CPs.

Note

(a) The above process flow is applicable only for the activities related to NSDL. The Issuer is responsible to ensure that issuance of CP's is in accordance with the Operational Guidelines on CPs issued by FIMMDA (effective from August 10, 2017), details of which are available on the web site of FIMMDA

(b) As per RBI guidelines, CP can be issued in denominations of Rs. 5 Lakhs or multiples thereof.