Market regulator Securities and Exchange Board of India (SEBI) has issued guidelines for the imposition of fines and action for non-compliance with ongoing disclosure requirements by the issuers of listed non-convertible securities and commercial papers.
The notice will be effective for compliance expiration dates that are on or after February 1, 2022.
The realized fines must be credited to the Investor Protection Fund of the relevant stock exchange.
The fines accrue until the moment of rectification of the non-compliance and to the satisfaction of the relevant recognized exchange.
“Such build-up will be regardless of other disciplinary or enforcement actions initiated by recognized exchanges or SEBI,” it said.
The regulator has specified the fines to be levied for violations of various provisions of the “Listing Obligations and Disclosure Requirements” standards and the measures to be taken in the event of non-compliance.
Scholarships may deviate if necessary, but only after a written statement of reasons.
If the non-compliant entity is listed on more than one stock exchange, the relevant exchanges will take uniform measures in consultation with each other.
The regulator said each stock exchange will review the compliance status of the entities that have listed their non-convertible securities and commercial paper and send notifications to the non-compliant entities within 30 days of the expiration of the prescribed timeline.
Non-compliant entities must ensure compliance with the requirements and pay penalties within 15 days from the date of such notice.
If entities fail to do so, exchanges will be required to issue notices and at the same time send notification to other exchanges where the non-conforming entity’s non-convertible securities or commercial paper is listed.
If the entity is still not compliant, the stock exchange and other entities authorized to act as an electronic book provider (EBP) will not permit the issuance of securities by such non-compliant entity on the EBP platform, nor will any further permit the listing of non-convertible securities or commercial papers.