Securities and Exchange Board of India
General Manager
Secondary Market Department
Email: pkb@sebi.gov.in
SMD/Policy/Listing/Cir-5/2003
February 12, 2003
The Executive Director/Managing Director
Of All the Stock Exchanges
Dear Sir/Madam,
Sub: Non-compliance of provisions of listing agreement.
It has been observed that in the cases where companies listed at the stock exchanges fail to comply with the various requirements of listing agreement, the exchanges do not initiate any action against the companies.
In this context, we would like to draw your attention to Section 21 of Securities Contracts (Regulation) Act, 1956, which stipulates where securities are listed on the application of any person in any recognized stock exchange, such person shall comply with the conditions of the listing agreement of that stock exchange. Further, Section 23(2) of Securities Contracts (R) Act, 1956, prescribed punishment for violation of Section 21 of the said enactment. Thus, exchanges are expected to take necessary action under Section 23(2) of the SC(R) Act, 1956, for any violation of Sec 21 of Securities Contracts (Regulation) Act, 1956, due to non-compliance of the provisions of listing agreement.
You are advised to take suitable action against companies under Sec 23(2) of SC(R ) Act, 1956, for violation of section 21 of SC(R ) Act, 1956, by the companies for non-compliance of the provisions of listing agreement.
Yours faithfully,
P.K.BINDLISH
