Consequences for non-payment of outstanding Annual Listing Fees for FY 2020-21

Listed Companies – Be Alert !!!!!

NSE and BSE both vide Circular Ref No: NSE/CML/2020/53 and notice no. 20201106-39 dated 06.11.2020, respectively has issued circular stating Action(s) to be initiated against listed companies for non-payment of outstanding Annual Listing Fees (“ALF”) for Financial Year 2020-21.

This Circular has been issued to:

The Company Secretary/Compliance Officer

(To all Companies who have not paid Annual Listing Fees)

The following action shall be taken if a listed company (being Defaulted Company) fail to pay the outstanding ALF (including the listing fee for Financial Year 2020-21) on or before November 20, 2020, in the manner mentioned below:

Annual Listing Fees

  • Action w.e.f. November 23, 2020:
NSE BSE
Ø The name of the defaulting companies shall be displayed on the Exchange website. Ø The names of the defaulting companies shall be displayed on the website of BSE Limited on a separate page to highlight the Companies’ failure to pay the ALF.
Ø On the company’s individual get quote page on the Exchange website, a message shall be displayed saying, “Company has not paid Annual Listing Fees and is in violation of SEBI Regulations & Exchange Requirements” Ø On the defaulting companies’ individual stock reach page on the website of the Exchange, a message shall be displayed stating that, “Company has not paid Annual Listing Fees and is in violation of SEBI Regulations & Exchange Requirements.”
Ø On the submission portal, whenever company logs in for submitting disclosures, a similar message would be displayed. Ø A similar message will also be displayed as a running ticker on the electronic portal of the Exchange, whenever the defaulting companies will log in for submitting disclosures.
Ø The equity shares of the company shall be moved from Normal Rolling Segment (Series: EQ) to Trade to Trade Segment (Series: BE). A notice to this effect will also be issued to all market participants. Ø The equity shares of the defaulting companies shall be moved from Normal Trading to Trade to Trade segment (i.e. gross settlement) for which a 7 days’ notice will also be issued to all the market participants.

Note:

  • It may be noted that the aforesaid action(s) are initial in nature and same does not preclude the Exchange from taking further stringent action(s) against the defaulting companies as notified by the Exchange from time to time.
  • Above action would also apply to Small and Medium Enterprises (SME) companies listed on the Exchange who have defaulted in paying ALF for Financial Year 2020- 21

The measures listed above, would not apply to the following (exclusions):

  • Public Sector Undertaking (PSU) companies
  • Companies who have been admitted by Hon’ble National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code.
  • Companies that have only Debt/Mutual Funds listed on the Exchange.
  • For computation of the total outstanding amount ALF, tax deducted at source (TDS) would be excluded.
  • In case the company is commonly listed i.e. on more than one Stock Exchange, actions such as transfer to Trade to Trade segment and reversal of these actions shall done in coordination by the Exchanges where the company is listed.

Links of the Circulars:

For NSE: https://taxguru.in/sebi/action-against-companies-defaulting-payment-listing-fees-nse.html

For BSE: https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20201106-39 

Disclaimer: Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information.

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