Sebi specifies an action in the event of non-compliance with the information rules by the issuers of non-convertible securities


Markets regulator Sebi on Wednesday issued guidelines to impose fines and take action for non-compliance with continuous disclosure requirements by issuers of listed non-convertible securities and commercial paper.

The circular will enter into force for the compliance dates falling from February 1, 2022.

The fines imposed must be credited to the Investor Protection Fund of the relevant exchange.

The fines will continue to run until the time of rectification of the non-conformity and to the satisfaction of the recognized stock exchange concerned.

“This accumulation will be independent of any other disciplinary / coercive action initiated by the recognized stock exchange (s) / SEBI,” he said.

Sebi clarified the amounts of fines to be collected in the event of violation of the various provisions of the Listing Obligations and Disclosure Requirements standards and the measures to be taken in the event of non-compliance.

Scholarships can deviate, if necessary, but only after recording the reasons in writing.

In the event that the non-compliant entity is listed on more than one exchange, the relevant exchanges should take uniform action in consultation with each other.

The regulator said each exchange will review the compliance status of entities that have listed their non-convertible securities and commercial paper and issue notices to non-compliant entities within 30 days of the due date of the prescribed deadline.

Non-compliant entities must ensure compliance with requirements and pay fines within 15 days of the date of this notice.

If the entities fail to do so, the exchanges will have to issue recall notices and at the same time send information to the other exchanges where the non-convertible securities or the commercial paper of the non-compliant entity are listed.

If the entity still does not comply, the exchange and other entities authorized to act as an e-book provider (EBP) will not allow the issuance of securities by that non-compliant entity on the EBP platform and will not authorize the subsequent listing of non-compliant securities. convertible securities or commercial paper.

“The recognized stock exchange (s) also advise the non-compliant entity to ensure that the object of the non-compliance that has been identified and indicated by the recognized stock exchange (s) and any subsequent action taken by the recognized stock exchange (s) ) in this regard will be submitted to the entity’s board of directors at its next meeting. Comments made by the board will be duly notified to the recognized exchange (s) for dissemination, ”Sebi said.

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