Corporate Law Daily – Editorial Team
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In the interests of investors and the securities market, SEBI has directed the Stock Exchanges to levy fines and take action in case of non-compliance with continuous disclosure requirements by issuers of listed Non-Convertible Securities and/ or Commercial Paper. SEBI has also prescribed the fines to be levied in case of any non-compliances in an annexure to the circular. Non-compliant entities shall pay fines within 15 days from the date of such notice. The provisions will be effective in respect of due dates of compliance falling on or after February 01, 2022. ?
In case a non-compliant entity is listed on more than one recognized stock exchange, the concerned recognized stock exchange(s) shall take uniform action under this circular in consultation with each other. The amount of fine realized shall be credited to the "Investor Protection Fund" of the concerned recognized stock exchange. ?
The recognized stock exchanges shall take action for non-compliance with the provisions of the SEBI LODR Regulations & circulars or guidelines issued thereunder, by an entity having listed Non-Convertible Securities as per annexure. ?
As per Annexure, instances of non-compliance and their penalties are as viz (i) In case of delay in furnishing intimation about the board meeting a penalty of 5,000 per instance of non-compliance per item is levied; (ii)In case of non-submission of the annual report within the period prescribed, a penalty of ? 2,000 per day will be levied; (iii) For failuring to obtain prior approval of stock exchange for any structural change in non-convertible securities, a penalty of ? 50,000 per instance will be levied.
SEBI has advised the recognized stock exchanges to take necessary steps to implement this circular and shall disclose on their website the action(s) taken against the entities for non-compliance(s); including the details of the respective requirement, amount of fine levied/ action taken, etc. ?
Introduction ?
Special Economic Zones ('SEZs') are demarcated areas within India, that offer incentives to businesses such as competitive infrastructure, duty-free procurements, fiscal incentives and other measures designed to make it easier and smoother to conduct business. SEZs in India thus become a popular investment destination for many multinationals, particularly exporters. The Special Economic Zones Act, 2005 ('the SEZ Act') came into force along with the SEZ Rules in 2006 with the following key objectives : ?
- Generation of additional economic activity ?
- Promotion of exports of goods and services ?
- Promotion of investment from domestic and foreign sources ?
- Creation of employment opportunities ?
- Development of infrastructure facilities ?
The SEZ scheme, to an extent, has met its objectives as for the FY 2020-21, the total exports touched INR 7.60 lakh Crore while investment in SEZ reached approx. INR 6.18 lakh Crore. SEZs employ more than 23 lakh people. There are around 5500 SEZ units and the exports contributed to nearly 1/3rd of total exports from India. ?
The functioning of the SEZs is governed by a three-tier administrative set-up: ?
- Board of Approval is the apex body chaired by the commerce secretary of GOI ?
- Unit Approval Committee ('UAC') at the zonal level dealing with the approval of units ?
- Each Zone is headed by a Development Commissioner, who is also heading the UAC ?
The performances of the SEZ units are monitored annually by the UAC and units are liable for penal action in case of violation of the conditions of the approval. ?
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