TMI BlogAmendment to bye-laws of recognised stock exchanges with respect to non-compliance of certain listing conditions and adopting Standard Operating Procedure for suspension and revocation of trading of shares of listed entities for such non compliancesX X X X Extracts X X X X X X X X Extracts X X X X ..... ll use imposition of fines as action of first resort in case of such non compliances and invoke suspension of trading in case of subsequent and consecutive defaults. In order to maintain consistency and uniformity of approach in this regard, it has been decided to lay down, in the bye laws of the recognised stock exchanges, the following: - (i). Uniform fine structure for non-compliance of certain clauses of the listing agreement as per Annexure I; (ii). Standard Operating Procedure (SOP) for suspension and revocation of suspension of trading in the shares of such listed entities as per Annexure II. 2. Further, in order to ensure effective enforcement of listing conditions, it is felt to bring in place appropriate system to enforce the liabilities of listed entities and their promoters/promoter group as disclosed to the concerned recognised stock exchange under clause 35 of the Listing Agreement. It is also felt desirable that while the relevant disclosures are not made, such promoters/promoter group should not exit from the listed entity. Accordingly, it has been decided that during the process of the suspension of the trading/ revocation of trading as provided in the SO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xchange Board of India Act 1992, read with section 10 of the Securities Contracts (Regulation) Act, 1956 in the interest of trade and public interest and for the protection of the interests of investors in securities and to promote the development of, and to regulate the securities market and shall come into effect immediately. 8. This Circular is also available on SEBI website at www.sebi.gov.in. Yours faithfully, Sunil Kadam General Manager email: sunilk@sebi.gov.in Annexure I Imposition of fine 1. The recognised stock exchange shall impose fine on listed entities for noncompliance with certain clauses of the listing agreement due to non-submission /delay in submission of reports/documents to recognised stock exchange as under: Clause of listing agreement Fine payable for 1 st non-compliance Fine Payable each subsequent and consecutive noncompliance Listing agreement Clause 31 Non-submission of the Annual Report within period prescribed under this clause. If non-compliance continues for more than 5 days, ₹ 1,000 per day ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the date of the notice. 5. If any non-compliant listed entity fails to pay the fine despite receipt of the notice as stated above, the recognised stock exchange may initiate appropriate enforcement action including prosecution. Creation of a new category Z for trading 6. The recognised stock exchange shall create a new category Z for trading of shares of such non- compliant listed entities wherein trades shall take place in 'trade for trade' basis. 7. If a listed entity commits two or more consecutive defaults in compliance of the aforesaid clauses of the listing agreement within 15 days from date of the notice issued under clause 4, the concerned recognised stock exchange shall, in addition to imposing fine as specified above, move the scrip of the listed entities to Z category. 8. The recognised stock exchange shall move back the scrip of the listed entity to the normal trading category, if it complies with respective clauses of the listing agreement and completely pays fine prescribed as above. 9. The recognised stock exchange shall give 7 days prior public notice to investors before moving the share of non- compliant entity to Z catego ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entity. Simultaneously, the recognised stock exchange shall give a public notice on its website informing compliance by the entity. 5. In case of failure to comply with respective requirement/s and/or pay fine as aforesaid, the recognised stock exchange shall suspend the trading in the shares of a non-compliant listed entity. The entire shareholding of promoter/prompter group of such non-compliant listed entity shall remain frozen till expiry of three months from the date of revocation of suspension. 6. While suspending trading in the shares of the non-compliant entity the recognised stock exchange shall send intimation of suspension to other recognised stock exchanges where the shares of the non-compliant entity are listed. On receipt of such intimation the other recognised stock exchanges shall also suspend trading in the shares of the entity. 7. After 15 days of suspension, trading in the shares of non-compliant entity may be allowed on the Trade for Trade basis, on the first trading day of every week for 6 months. In this regard, the recognised stock exchange shall give instruction to its trading members/stock brokers to obtain confirmation from clients before acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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