Disclosure lapses: Sebi puts stricter regulations for listed companies

Topics Sebi | Disclosures

Sebi

Markets regulator Sebi on Monday said companies in violation of disclosure regulations will have to pay a penalty of Rs 20,000 per day till the date of compliance.

Securities and Exchange Board of India (Sebi) said that stock exchanges will impose fines in case of non-compliance with certain provisions of Issue of Capital and Disclosure (ICDR) Regulations.

The fine will be applicable if the bonus issue is delayed beyond 15 days from the date of approval of the issue by the board of directors in cases where shareholders' approval for making the bonus issue is not required.

While in the cases where issuer is required to seek shareholders' approval for making the bonus issue, the fine will be applicable if bonus is not issued within two months from the date of the meeting of board of directors, Sebi said.

With respect to delay in bonus issue, Sebi clarified that "the approvals for the listing and trading of promoters' bonus shares may be granted by the stock exchange, only after payment of the requisite fine by the listed entity.

"However, the approvals for the listing and trading of bonus shares allotted to persons other than the promoter(s) may be granted in the interest of the investors, subject to compliance with other requirements," Sebi said in a circular.

The fine will also be levied on entities that do not complete the conversion of convertible securities and allot the shares within 18 months from the date of allotment of such securities.

Besides, the entities that fail to approach the bourses for listing of equity shares within 20 days from allotment and fail to make application for trading approval to the stock exchange within seven days from the date of grant of listing approval are also liable for paying the penalty.

The fine would be credited to the "Investor Protection Fund" of the concerned exchange, the regulator said.

The exchanges would issue notice to the non-compliant listed entity to pay fine within 15 days from the date of the notice.

In case the non-compliant entity fails to pay the fine, the stock exchange may initiate appropriate enforcement action, including prosecution, Sebi said.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel