Sebi plans new framework to check non-compliance of listing conditions

NEW DELHI: Sebi plans to put in place a stronger mechanism to check non-compliance of listing conditions, wherein exchanges will have powers to freeze promoter shareholding and even delist the shares of such defaulting companies.

The proposal would be discussed at the board meeting of the Securities and Exchange Board of India (Sebi) this week, senior officials said.

Under the proposed framework, exchanges would have the power to freeze the entire shareholding of the promoter and promoter group in noncompliant listed entity also holding in other securities, they added.

It has been further proposed that if non-compliance persists, it would lead to suspension, revocation of trading and delisting of the shares of such listed entities.

The proposed framework will put in place an appropriate system for effective enforcement of continuous compliance of requirements by listed entities and their promoters.

Grounds for suspension from listing include failure to comply with the board composition including appointment of women director and failure to constitute audit committee for two consecutive quarters; failure to submit information on the reconciliation of shares and capital audit report for two consecutive quarters.

The firms may be suspended for six months and subsequently, the process of compulsory delisting would be initiated.

Under the proposal, Sebi may ask stock exchanges to impose penalties ranging Rs 1,000-5,000 per day on violation of certain clauses of the listing agreement like nonsubmission or delay in submission of document related to the company's financial and shareholding details, failure to appoint women director on the board.

Besides, the exchanges can levy a fine of Rs 10,000 per instance for delay in furnishing prior intimation about the company's board meeting and delay in non-disclosure of record date or dividend declaration. NEW DELHI: More than 1,200 new foreign investors were registered with Sebi in the first 10 months of the ongoing fiscal, primarily due to their continued interest in the Indian capital markets, latest data from the regulator showed.

This comes on top of about 3,500 new foreign portfolio investors (FPIS) registered with Sebi in the last financial year.

According to the Sebi data, the number of FPIS with the regulatory approval increased to 9,083 at the end of January 2018, from 7,807 at March 2017, resulting in an addition of 1,276 such investors. Further, market experts are of the view that several measures taken by Sebi have added to India's attractiveness.

Moreover, they believe that the regulator's recent decisions, including allocating a separate limit of Rs 5,000 crore to FPIS for taking long position in Interest Rate Futures (IRFS) as well as doing away with the priorapproval requirement in case of change in local custodian, will help in boosting the sentiments.

In December, Sebi had decided to relax entry norms for FPIS willing to invest in the Indian markets as part of its effort to easing direct registration for such investors and avoid P-notes route.