ACTION TO BE TAKEN IN CASE OF NON-COMPLIANCES BY LISTED COMPANIES

Regulation : Fine payable and/or other action to be taken for non-compliance in respect of listed entity
Regulation 6(1): Rs. 1,000 per day for non-compliance with requirement to appoint a qualified company secretary as the compliance officer
Regulation 7(1): Rs. 1,000 per day for non-compliance with requirement to appoint share transfer agent
Regulation 13(1)/13(3): Rs. 1,000 per day for failure to ensure that adequate steps are taken for expeditious redressal of investor complaints Non-submission of the statement on shareholder complaints within the period prescribed under this regulation or under any circular issued in respect of redressal of investor grievances
Regulation 17(1): Rs. 5,000 per day for non-compliance with the requirements pertaining to the composition of the Board including failure to appoint woman director`5,000 per day
Regulation 18(1): Rs. 2,000 per day for non-compliance with the constitution of audit committee
Regulation 19(1)/ 19(2): Rs. 2,000 per day for non-compliance with the constitution of nomination and remuneration committee
Regulation 20(2): Rs. 2,000 per day for non-compliance with the constitution of stakeholder relationship committee
Regulation 21(2): Rs. 2,000 per day for non-compliance with the risk management constitution committee
Regulation 27(2): Rs. 2,000 per day for non-submission of the Corporate governance compliance report within the period provided under this regulation
Regulation 29(2)/29(3): Rs. 10,000 per instance of non-compliance per item for delay in furnishing prior intimation about the meeting of the board of directors
Regulation 31: Rs. 2,000 per day for non-submission of shareholding pattern within the period prescribed
Regulation 32(1): Rs. 1,000 per day for non-submission of deviations/variations in utilization of issue proceeds
Regulation 33: Rs. 5,000 per day for non-submission of the financial results within the period prescribed under this regulation
Regulation 34: Rs. 2,000 per day for non-submission of the Annual Report within the period prescribed under this regulation
Regulation 39(3): Rs. 1,000 per day for non-submission of information regarding loss of share certificates and issue of the duplicate certificates within the period prescribed under this regulation
Regulation 42(2)/42(3)/42(4)/42(5): Rs. 10,000 per instance of non-compliance per item Delay in/ non-disclosure of record date/ dividend declaration or non-compliance with ensuring the prescribed time gap between two record dates/ book closure dates
Regulation 44(3): Rs. 10,000 per instance of non-compliance Non-submission of the voting results within the period provided under this regulation
Regulation 46: 1. 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

2. Concerned recognized stock exchange(s) shall display on their website non- compliance by the listed entity and details of fine levied/ action taken.

3. The amount of fine realized as per the above structure shall be credited to the “Investor Protection Fund” of the concerned recognized stock exchange.

4. The fines specified above shall continue to accrue till the time of rectification of the non-compliance to the satisfaction of the concerned recognized stock 11 exchangeor till the scrip of the listed entity is suspended from trading for non-compliance with aforesaid provisions. Such accrual shall be irrespective of any other disciplinary/enforcement action(s) initiated by recognized stock exchange(s)/SEBI.

5. Every recognized stock exchange shall review the compliance status of the listed entities within 15 days from the date of receipt of information and shall issue notices to the non-compliant listed entities to ensure compliance and collect fine as per this circular within 15 days from the date of such notice. While issuing the said notice, the recognized stock exchange shall also send intimation of notice to other recognized stock exchange(s) where the shares of the non-compliant entity are listed.

6.If the non-compliant listed entity fails to comply with the aforesaid

7. 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, forthwith intimate the depositories to freeze the entire shareholding of the promoter and promoter group in such entity as well as all other securities held in the demat account of the promoter and promoter group.

8. If the non-compliant listed entity subsequently complies with the respective requirement(s) and pays the fine levied, in terms of this Circular, the concerned recognized stock exchange(s)shall display on their website compliance and status of fines paid by the listed entity. Simultaneously, the recognized stock exchange(s) shall intimate the depositories to unfreeze the entire shareholding of the promoter and promoter group in such entity as well as all other securities held in the demat account of the promoter and promoter group, after one month from the date of compliance.

9. If any non-compliant listed entity fails to pay the fine despite receipt of the notice as stated above, the recognized stock exchange(s) may also initiate appropriate enforcement action.

10. The recognised stock exchange(s)shall also advise the non-compliant listed 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 company in its next meeting. Comments made by the board shall be duly informed to the recognised stock exchange(s)for dissemination.

DISCLAIMER: THE ARTICLE IS BASED ON THE RELEVANT PROVISIONS AND AS PER THE INFORMATION EXISTING AT THE TIME OF THE PREPARATION.IN NO EVENT I SHALL BE LIABLE FOR ANY DIRECT AND INDIRECT RESULT FROM THIS ARTICLE. THIS IS ONLY A KNOWLEDGE SHARING INITIATIVE.

THE AUTHOR CAN BE REACHED AT VINAYAK.CHARU@GMAIL.COM AND AT 6283643738

Tags:

Author Bio

More Under SEBI

Leave a Comment

Your email address will not be published. Required fields are marked *