The Securities and Exchange Board of India (“SEBI”) has informed that the Stock Exchanges will levy fine and take action in case of non-compliances with continuous disclosure requirements by issuers of listed Non-Convertible Debt Securities and/ or NCRPS and/ or Commercial Papers.
The fines should be levied as per Annexure I and Annexure II of the Circular issued by SEBI on 13th November, 2020 (hyperlinked below).
Further, in case a non-compliant entity is listed on more than one recognized stock exchange, the concerned recognized stock exchanges must take uniform action under this circular in consultation with each other.
Please note-
1. The amount of fine realized as per the structure provided in Annexure I of this circular has to be credited to the “Investor Protection Fund” of the concerned recognized stock exchange.
2. The fines specified in Annexure I of this circular will continue to accrue till the time of rectification of the non-compliance and to the satisfaction of the concerned recognized stock exchange. Such accrual will be irrespective of any other disciplinary/enforcement action(s) initiated by recognized stock exchange(s)/SEBI
3. This provisions mentioned in this circular will come into force for compliance period ending on or after December 31, 2020
Background:
SEBI has prescribed continuous disclosure norms for issuers of listed Non Convertible Debt Securities, Non-Convertible Redeemable Preference Shares (NCRPS) and Commercial Papers under the-
• Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR Regulations”) for issuers of listed Non-Convertible Debt Securities and/or NCRPS.
• SEBI circular nos. SEBI/HO/DDHS/DDHS/CIR/P/2019/115 dated October 22, 2019 and SEBI/HO/DDHS/DDHS/CIR/P/2019/167 dated December 24, 2019 for issuers of listed Commercial Papers.
For listed securities, (i.e. equity shares and convertible securities), SEBI had issued circular no. SEBI/HO/CFD/CMD/CIR/P/2020/12, dated January 22, 2020, specifying a uniform structure for imposing fines for issuers not in compliance with certain provisions of SEBI LODR Regulations.
Accordingly, in order to ensure effective enforcement of continuous disclosure obligations by issuers of listed Non-Convertible Debt Securities or NCRPS or Commercial Papers, the present Circular has been issued.
Source : Securities and Exchange Board of India
