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Stock exchanges to penalise non-compliant companies: SEBI

In case companies do not make the relevant disclosures, promoters would not be able to exit from the listed entity, SEBI says

January 01, 1970 5:30 IST | India Infoline News Service
In order to protect small investors, the Securities and Exchange Board of India (SEBI) has asked stock exchanges to act against companies that don't comply with listing norms.

The SEBI wants exchanges to impose fines, freeze the shares of promoter and promoter group companies or transfer trading in the stock of such companies to a separate category.

"It has been decided that recognised stock exchanges shall 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," SEBI said on Monday.

In case companies do not make the relevant disclosures, promoters would not be able to exit from the listed entity.

"It has also been decided that during the process of the suspension and revocation of trading, the concerned recognised stock exchange shall intimate the details of the concerned non-compliant entity and its promoter and promoter group to the depositories. On receipt of such intimation, the depositories shall freeze or unfreeze, as the case may be, the entire shareholding of the promoter and promoter group in such entity," SEBI said.

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