Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram
Article Section

Home Articles Corporate Laws / IBC / SEBI CSLalit Rajput Experts This

SEBI Circular on Penalty for Repeated Delivery Default

Submit New Article
SEBI Circular on Penalty for Repeated Delivery Default
CSLalit Rajput By: CSLalit Rajput
August 24, 2021
All Articles by: CSLalit Rajput       View Profile
  • Contents

SEBI Circular on Penalty for Repeated Delivery Default

Securities and Exchange Board of India (SEBI) vide notification / Circular No. SEBI/HO/ CDMRD/ DRMP/ CIR/P/2021/619 issued and publishes dated 17th August, 2021, has introduced Penalty for Repeated Delivery Default in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act 1992, read with Section 10 of the Securities Contracts (Regulation) Act, 1956.

The Circular was addressed to:

  • The Managing Directors / Chief Executive Officers,
  • All Clearing Corporations having Commodity Derivatives Segment

Need of the Circular:

  • To protect the interests of investors in securities and
  • To promote the development of, and to regulate the securities market.

Applicability of the provisions of this circular

Shall be effective after one month from the date of issuance of the circular.

Circular in brief:

SEBI has decided the followings, in consultation with Clearing Corporations (CCs)

  1. In the case of repeated default by a seller or a buyer, for each instance of repeated default, an additional penalty shall be imposed, which shall be 3 % of the value of the delivery default.
  2. Repeated Default shall be defined as an event, wherein a default on delivery obligations takes place 3 times or more during a six months period on a rolling basis.
  3. The penalty levied shall be transferred to Settlement Guarantee Fund (SGF) of the Clearing Corporation.
 

 

By: CSLalit Rajput - August 24, 2021

 

 

 

Quick Updates:Latest Updates