SEBI streamlines the process of Levying Fines for not-complying with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
The Securities and Exchange Board of India (“SEBI”) has issued a Circular dated May 3, 2018 to streamline process and maintain consistency with respect to:
- levy of fines for non-compliance(s) with certain provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015(“Listing Regulations”);
- matter of suspension of trading of securities of a Listed Entity(ies); and
iii. freezing the holdings of the promoter and promoter group of non-compliant Listed Entity.
The Circular will be effective from compliance periods ending on or after September 30, 2018.
SEBI has laid down a uniform structure for imposing fines as a first resort for non-compliance with certain provisions of the Listing Regulations and the standard operating procedure for suspension of trading in case the non-compliance is continuing and/or repetitive. In order to stream-line the process, to maintain consistency and to adopt a uniform approach in the matter of levy of fines for non-compliance with certain provisions of the Listing Regulations, the manner of suspension of trading of securities of a listed entity and the manner of freezing the holdings of the promoter and promoter group of a non-compliant listed entity the current circular has been issued.
Key Highlights of the Circular
Stock Exchanges have been mandated to:
- take actions in case of non-compliances with the Listing Regulations. Please refer to the attached document titled “Listing Regulations”.
- follow the Standard Operating Procedure for suspension and revocation of specified securities. Please refer to the attached document titled “Specified Securities”.
- The Depositories will freeze or unfreeze the entire shareholding of a Promoter or Promoter Group under such non-compliant listed entity as well as other securities held in their demat account upon receiving information from the concerned recognized stock exchange.
- In cases where a non-compliant entity is listed on more than one recognized stock exchange, such stock exchanges will take uniform action after consulting each other.
- The actions taken against the non-compliant listed entities including details of respective requirement, amount of fine levied, the period of suspension, details with respect to freezing of shares, etc. will be disclosed by the recognized stock exchange on their website.
- In cases of specific exemption from compliance, the recognized stock exchanges may suspend or withdraw the action.
Please refer to the hyperlink below for further details on the Circular.