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The Securities and Exchange Board of India has announced a fine and penalty structure for disclosure related violations by issues of debt instruments including Non-Convertible Debt securities (NCD), Non-Convertible Redeemable Preference Shares (NCRPS) and Commercial Papers (CPs).
Like the companies that list equity and stocks on exchanges and have to make periodic disclosures, there is also a disclosure regime for debt securities. Now, SEBI has issued a circular for the penalty structure.
Penalty structure
For the issuers of listed debt securities, the fine in case of delay in furnishing prior intimation with respect to date of payment of interest/ redemption amount or intimation regarding board meeting affecting the rights or interest of holders of NCDs/NCRPS would be ₹1,000 per ISIN, a code that identifies specific issues. In case of non submission of the financial results within the prescribed period, there would be a fine of ₹5,000 per day.
For non-disclosure of line items (in P&L statement) as prescribed by SEBI, the fine would be ₹1,000 per day. The same fine would also be applicable for non submission of a certificate signed by the Debenture Trustee. Also, ₹1,000 fine would be levied on non-submission of deviations/ variations in utilisation of issue proceeds.
Similar penalty structure has been prescribed by SEBI for various other violations. The fine ranges from ₹1,000 to ₹50,000.
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