SEBI Lists Penalty On Non-Compliance By Commercial Papers Issuers
Markets regulator Securities and Exchange Board of India (SEBI) has issued guidelines for imposing penalties and taking action for non-compliance with continuous disclosure requirements by issuers of listed non-convertible securities and commercial papers.
The notification will be applicable for due dates of compliance falling on or after February 1, 2022.
The penalty collected needs to be deposited in the Investor Protection Fund of the respective stock exchange.
Penalty will continue to be paid till the time the non-compliance is rectified and till the satisfaction of the recognized Stock Exchange concerned.
“Such accruals shall be notwithstanding any other disciplinary or enforcement action initiated by the recognized stock exchanges or SEBI,” it said.
The regulator has specified the amount of penalty to be imposed in case of violation of various provisions of the “listing obligations and disclosure requirements” norms and action to be taken in case of non-compliance.
Stock exchanges can make deviations if necessary, but only after recording the reasons in writing.
If the non-compliant entity is listed on more than one stock exchange, the respective exchanges will take a similar action in consultation with each other.
The regulator said each stock exchange will review the compliance status of its non-convertible securities and commercial paper listing entities and issue notices to non-compliant entities within 30 days from the due date of the stipulated time frame.
Non-compliant entities will have to ensure compliance with the requirements and pay the fine within 15 days from the date of such notice.
If entities fail to do so, exchanges will have to issue reminder notices and, at the same time, send information to other exchanges where non-convertible securities or commercial papers of a non-compliant entity are listed.
In case the entity still fails to comply, stock exchanges and other entities are permitted to act as electronic book providers (EBPs), permitting the issuance of any security by such non-compliant entity on the EBP platform. and non-convertible securities or commercial paper.