Sebi allows framework on non-compliance with disclosure norms 


Securities and Exchange Board of India (Sebi) modified the framework that dictates fines to be imposed by stock exchange in the event of violation of disclosure norms. The capital market regulator said in a statement on Tuesday that the exchanges can deviate from the original regulation if the investors are not affected.

On August 19, 2019, Sebi had come out with a circular specifying the fines to be imposed by the Stock Exchanges for non-compliance with certain provisions of SEBI (ICDR) Regulations, 2018.

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These fines were related to delay in completion of bonus issue by listed entities and non-completion of the conversion of convertible securities and allotment of the shares within 18 months from the date of allotment of such securities.

This framework mandated a fine of 20,000 per day till the date of compliance to be imposed against companies in violation of disclosure regulations.      

In a circular on Tuesday, Sebi provide some relief regarding this framework.

“The stock exchanges may deviate from the provisions of the circular, wherever the interest of the investors are not adversely affected, if found necessary, only after recording reasons in writing,” Sebi said.

Also Read: SEBI announces rights and responsibilities of investing in securities market

The stock exchanges are advised to bring the provisions of this circular to the notice of listed entities and also to disseminate the same on its website, the market watchdog further said.

This circular is issued under regulation 299 of ICDR Regulations and in exercise of power conferred under Section 11(1) of the Sebi Act 1992, to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market, it noted.


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