SEBI Non-compliance Provisions and Penalty Chart related to continuous disclosures By CS Lalit Rajput


Overview

Securities and Exchange Board of India (SEBI) vide notification / Circular No. SEBI/HO/DDHS/DDHS/CIR/P/2020/231 issued and publishes dated 13th November, 2020, has published Non-compliance with provisions related to continuous disclosures in exercise of the powers conferred under sections 11(1) and 11A(2) of the SEBI Act, 1992 read with Section 9 and 21 of Securities Contracts (Regulation) Act, 1956.

The Circular is issued to :

All Recognized Stock Exchanges

All Depositories

All issuers of listed Non-Convertible Debt Securities and/or Non-Convertible

Redeemable Preference Shares

All Issuers of listed Commercial Papers

Applicability of the Provisions mentioned in this Circular:

shall come into force for compliance period ending on or after December 31, 2020

Provisions of this Circular

Continuous disclosure norms as prescribed by SEBI for issuers of listed Non-Convertible Debt Securities, Non-Convertible Redeemable Preference Shares (NCRPS) and Commercial Papers:

Sl.

Regulation / Circular

Provisions - Continuous disclosure norms

Links

Monitoring Provisions

Penalty

Provisions

1

SEBI (LODR) Regulations, 2015

For issuers of listed Non-Convertible Debt Securities and/ or NCRPS.

Click here

Reg. 97 (1)

Reg. 98 (1) (a)

2

SEBI circular nos. SEBI/HO/DDHS/ DDHS/CIR/P/2019/115 dated October, 22, 2019

for issuers of listed Commercial Papers

Click here

SEBI circular no. SEBI/HO/DDHS/DDHS/CIR/P/2019/115 dated October 22, 201 9

3

SEBI circular nos.  SEBI/HO/DDHS/ DDHS/CIR/P/2019/167 dated December 24, 2019

for issuers of listed Commercial Papers

Click here

Kindly note that:

 Stock Exchanges shall levy fine and take action in case of non-compliances with continuous disclosure requirements by issuers of listed Non-Convertible Debt Securities and/ or NCRPS and/ or Commercial Papers as specified in this Circular (Refer Annexure A below), in the interests of investors and the securities market and also may deviate from the fine / actions only after recording reasons in writing, if found necessary.

In case a non-compliant entity is listed on more than one recognized stock exchange, the concerned recognized stock exchanges shall take uniform action under this circular in consultation with each other.

 Annexure A:

Fine to be levied in case of non-compliances by issuers of listed Non- Convertible Debt Securities and/or Non-Convertible Redeemable Preference Shares

 

 

Sl. No.

 

 

Regulation

Fine payable and/or other action to be taken for non-compliance in respect of an entity having listed its Non- Convertible      Debt Securities and/or NCRPS

(a)

Applicable Regulations for Chapter  III (Common obligations of listed entities) of SEBI LODR Regulations for which penalty has been specified vide SEBI circular no. SEBI/HO/CFD/CMD/CIR/P/2020/12 dated January 22, 2020 as amended from time to time.

Fine payable as per SEBI circular                                       no.

SEBI/HO/CFD/CMD/CIR/

P/2020/12 dated January 22, 2020 as amended from time to time.

(b)

Regulation 50 (1)/ (3)

 

Delay in furnishing prior intimation with respect to date of payment of interest / redemption amount or intimation regarding board meeting effecting the rights or interest of holders of NCDs/NCRPS.

 

 

Rs. 1,000 per ISIN

(c)

Regulation 52(1)

 

Non-submission of the financial results within the period prescribed under this regulation.

Rs. 5,000 per day

(if already levied a penalty for non-compliance of Regulation 33 in terms of SEBI circular no. SEBI/HO/CFD/ CMD/ CIR /P/2020/12 dated 22.01.2020, then penalty shall not be imposed again for such violation.)

(d)

Regulation 52(4) / 52(6)

 

Non-disclosure of line items prescribed under Regulation 52(4) along with the half yearly / annual financial results or non- disclosure of items pertaining to NCRPS as notes to financials prescribed under Regulation 52(6).

 

 

Rs. 1,000 per day

(e)

Regulation 52(5)

 

Non-submission of a Certificate signed by the Debenture Trustee taking note of the contents prescribed under regulation 52(4).

 

 

Rs. 1,000 per day

(f)

Regulation 52(7)

 

Non-submission of deviations/ variations in utilization of issue proceeds.

 

 

Rs. 1,000 per day

(g)

Regulation 54 (2)

 

Non-disclosure of extent and nature of security created and maintained with respect to secured listed NCDs in the financial statements.

 

 

Rs.1,000 per day

(h)

Regulation 57(1)

 

Non-disclosure of information related to payment obligations.

 

 

Rs. 1,000 per day per ISIN

(i)

Regulation 59 (1)

 

Failure to obtain prior approval of stock exchange for any structural change in terms of NCDs/ NCRPS.

 

 

Rs. 50,000 per instance

(j)

Regulation 60 (2)

Delay in submission of the notice of record date.

 

 

Rs. 10,000 per ISIN

(k)

Regulation 62

 

Non-compliance with norms pertaining to functional website

Advisory/warning letter per instance of non- compliance per item

 

Rs. 10,000 per instance for every additional advisory/warning letter exceeding the four advisory/ warning letters in a financial year.

Annexure B: Fine to be levied in case of non-compliances by issuers of listed Commercial Papers

 

Sl.

No.

 

 

Clause

Fine payable and/or other action to be taken for non- compliance in respect of an entity having listed Commercial Paper

(a)

Non-submission of financial results within the prescribed period

Rs. 5,000 per day

(b)

Non-disclosure of line items prescribed under Regulation 52(4) of SEBI LODR Regulations along with the half yearly / annual financial results

Rs. 1,000 per day

(c)

Non-submission of certificate regarding fulfillment of payment obligations

Rs. 1,000 per day per ISIN

Annexure C: Action to be taken in case of non-compliances by issuers of listed Non-Convertible Debt Securities and/or Non-Convertible Redeemable Preference Shares and/or Commercial Papers

1. Every recognized stock exchange shall issue notices to the non-compliant entities within 30 days from the due date of prescribed timeline.

2. If the non-compliant entity fails to comply with the Fine / Penalty requirement(s) and/or pay fine levied within the stipulated period as per the notice stated above, the concerned recognized stock exchange(s) shall, upon expiry of the period indicated in the notice, shall issue reminder notices to such non-compliant entities, to ensure compliance with the requirement(s) and pay fines within 10 days from the date of such notice.

3. If the non-compliant entity fails to comply with the Notice requirement(s) and/or pay fine levied within the stipulated period as per the notice, the concerned recognized stock exchange(s) shall send intimation to other recognized stock exchange(s) and all entities allowed to act as Electronic Book Provider, regarding failure of compliance of such entity.

4. The recognized stock exchange(s) and/ or other entities allowed to act as Electronic Book Provider, thereafter, shall not allow:

(a) issuance of any securities, as defined under SEBI circular no. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 by such noncompliant entity on EBP Platform;

(b) further listing of Non-Convertible Debt Securities or NCRPS or Commercial Papers of such non-compliant entity.

5. The recognised stock exchange(s) shall also advise the non-compliant entity to ensure that the subject matter of non-compliance which has been identified and indicated by the recognised stock exchange(s) and any subsequent action taken by the recognised stock exchange(s) in this regard shall be placed before the Board of Directors of the entity in its next meeting. Comments made by the board shall be duly informed to the recognised stock exchange(s) for dissemination.

 Link: https://www.sebi.gov.in/legal/circulars/nov-2020/non-compliance-with-provisions-related-to-continuous-disclosures_48171.html

Click here to read the disclaimer


Write a Comment