Database for Distinctive Number (DN) of Shares - Action against non-compliant companies
Summary
This circular mandates Depositories to freeze securities and corporate benefits for promoters and directors of listed companies that fail to reconcile Distinctive Number records. It requires Stock Exchanges to publicly disseminate the names of non-compliant companies on their websites. Additionally, exchanges must verify compliance with DN reconciliation norms before revoking any trading suspension.
Text
Regulation 75 of the SEBI (Depositories and Participants) Regulations, 2018 mandates issuer or its agent to daily reconcile the records of dematerialized securities with all securities issued by them.
SEBI circular no. CIR/MRD/DP/10/2015 dated June 05, 2015 directed Issuers/RTAs to update Distinctive Number information for physical and dematerialized share capital and match records with Stock Exchanges by December 31, 2015.
Depositories shall freeze all the securities held by the promoters and directors of the listed companies that are not in compliance with the provisions of SEBI circular no. CIR/MRD/DP/10/2015 dated June 05, 2015.
They shall not effect any transfer, by way of sale, pledge, etc., of any of the securities, held by the promoters and directors of such non-compliant companies.
They shall freeze all related corporate benefits on the Beneficiary Owner a/c frozen as above.
They shall retain the freeze on the securities held by promoters and directors of non-compliant companies till such time the company complies with the directions provided in SEBI circular dated June 05, 2015.
The names of companies that are not in compliance with aforementioned circular shall be prominently disseminated on the website of the exchanges / depositories.
Exchanges should ensure compliance by the company with SEBI circular no. CIR/MRD/DP/10/2015 dated June 05, 2015 and ensure availability of updated details of company’s promoters and directors before revocation of suspension of trading.
The concerned Stock Exchanges and Depositories shall coordinate with each other and take necessary steps to implement this circular.
SEBI may also take any other appropriate action(s) against the concerned listed companies and its promoters/directors for non-compliance with SEBI circular no. CIR/MRD/DP/10/2015dated June 05, 2015.
This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Database for Distinctive Number (DN) of Shares - Action against non-compliant companies. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.