SEBI directs exchanges to levy fines and take action for non-compliances by issuers of non-convertible securities

SEBI/HO/DDHS_Div2/P/CIR/2021/699, Dated: 29-12-2021

In the interests of investors and the securities market, SEBI has directed the Stock Exchanges to levy fines and take action in case of non-compliance with continuous disclosure requirements by issuers of listed Non-Convertible Securities and/ or Commercial Paper. SEBI has also prescribed the fines to be levied in case of any non-compliances in an annexure to the circular. Non-compliant entities shall pay fines within 15 days from the date of such notice. The provisions will be effective in respect of due dates of compliance falling on or after February 01, 2022.

In case a non-compliant entity is listed on more than one recognized stock exchange, the concerned recognized stock exchange(s) shall take uniform action under this circular in consultation with each other. The amount of fine realized shall be credited to the “Investor Protection Fund” of the concerned recognized stock exchange.

The recognized stock exchanges shall take action for non-compliance with the provisions of the SEBI LODR Regulations & circulars or guidelines issued thereunder, by an entity having listed Non-Convertible Securities as per annexure.

As per Annexure, instances of non-compliance and their penalties are as viz (i) In case of delay in furnishing intimation about the board meeting a penalty of INR 5,000 per instance of non-compliance per item is levied; (ii) In case of non-submission of the annual report within the period prescribed, a penalty of INR 2,000 per day will be levied; (iii) For failure to obtain prior approval of stock exchange for any structural change in non-convertible securities, a penalty of INR 50,000 per instance will be levied.
SEBI has advised the recognized stock exchanges to take necessary steps to implement this circular and shall disclose on their website the action(s) taken against the entities for non-compliance(s); including the details of the respective requirement, amount of fine levied/ action taken, etc.

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