Non-Compliance of Provisions of SEBI Regulations will attract Procedure for Revocation and Suspension of Trading of Securities: SEBI [Read Circular]

SEBI - e-KYC - ,Aadhaar - Securities Market - Taxscan

The Security Exchange Board of India (SEBI) issued a circular dated January 22, 2020, stating that if in case the recognized stock exchange and depositors do not comply with the provisions of SEBI Regulations, 2015 then as a consequence the process of revocation and suspension of trading of securities would be attracted.

The TVVPS Chakravarti T, General Manager under Compliance and Monitoring Division, Corporate Finance Department issued a circular addressing all the recognized stock exchange  and depositories, elaborating on the consequences of the non-compliance with the provisions of SEBI Regulations, 2015

The circular states that for the public good which involves investors and security market the action will be taken against an individual on the non-compliance of the regulations such as:

  1. If in case the qualified Company Secretary (CS) is not appointed as the compliance office;
  2. No share transfer agent is appointed;
  3. Inadequate steps are taken for the complaint filed by the investors; etc.

All these non-compliance will attract fines or any other action. Further, the due Standard Operating Procedure (SOP) must be followed. The SOP includes 2 consequences in case of non-compliance of the provisions i.e. as follows:

  1. By moving the list of the entities to the ‘Z’ category;
  2. Suspension of Trading.

In case of non-compliance with the regulations, the penalties will be imposed or strict actions will be taken. Further, the stock exchange is directed to enlist the name of the promotors who have not complied with the provisions of Security Exchange Board of India (SEBI) Regulation, 2015 and also the date of suspension and date of revocation of the trading practice of these promoters along with the amount of fine imposed on him (promoter) and details of the shares which are frozen on the official website of the stock stack exchange.

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