Non-compliance with provisions related to continuous disclosures
Summary
This circular supersedes a 2020 directive to establish a uniform structure for levying fines on issuers of listed Non-Convertible Securities and Commercial Papers for continuous disclosure non-compliances. It mandates recognized stock exchanges to impose specific penalties as detailed in Annexure I and ensure these fines accrue until rectification is satisfactory. The provisions apply to compliance due dates falling on or after February 1, 2022, while preserving SEBI's independent enforcement powers. This section details the specific fines for non-compliance by issuers of listed Commercial Papers, such as late submission of financial results. It establishes a procedure where stock exchanges must issue notices and reminders to non-compliant entities within stipulated timelines. If compliance is not achieved, restrictions are placed on further securities issuance and listing until the entity rectifies the default.
Text
Pursuant to the recent amendments to SEBI LODR Regulations, it has been decided to issue the present circular in supersession of the aforesaid circular bearing number SEBI/HO/DDHS/DDHS/CIR/P/2020/231 dated November 13, 2020.
Stock Exchanges shall levy fine and take action in case of non-compliances with continuous disclosure requirements by the issuers of listed Non-Convertible Securities and/ or Commercial Paper as specified in Annexure I and Annexure II of this circular respectively.
Stock Exchanges may deviate from the above, if found necessary, only after recording reasons in writing.
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 recognized stock exchanges shall 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.
The amount of fine realized as per the structure provided in Annexure I of this circular shall be credited to the 'Investor Protection Fund' of the concerned recognized stock exchange.
The fines specified in Annexure I of this circular shall continue to accrue till the time of rectification of the non-compliance and to the satisfaction of the concerned recognized stock exchange.
The recognized stock exchanges may keep in abeyance the action or withdraw the action in specific cases where specific exemption from compliance with the requirements for continuous disclosures /moratorium on enforcement proceedings has been provided for under any Act, Court/Tribunal Orders etc.
The above provisions are without prejudice to the power of SEBI to take action under the securities laws.
The recognized stock exchanges are advised to bring the provisions of this circular to the notice of issuers of listed Non-Convertible Securities and/or Commercial Paper.
This circular shall come into force for the due dates of compliances falling on or after February 01, 2022.
The recognized stock exchanges may make consequent changes in their byelaws, if any, to implement this circular.
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Source: SecMarx — Non-compliance with provisions related to continuous disclosures. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.