Economic stimulus package for COVID Relief

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At as much as 10% of GDP, the big stimulus package did not appear to leave any major sphere untouched.

Over five consecutive days of interaction with the country’s financial media, FM Nirmala Sitharaman provided the break-up of PM Modi’s Rs 20 lakh crore COVID-19 stimulus for India.

At as much as 10% of GDP, the package did not appear to leave any major sphere untouched as Prime Minister Modi brought out the fiscal artillery to complement RBI’s monetary measures spread over the past few weeks, putting India firmly in the league of biggies that have gone all out against the virus.

In his speech, Mr. Modi said his package would focus on land, labour, liquidity and laws, and would deal with such sectors as cottage industries, MSMEs, the working class, middle class and industry. He also talked of focusing on empowering the poor, labourers and migrant workers, both in the organised and unorganised sectors.

Dubbed Atmanirbhar Bharat Abhiyaan, this Covid relief package puts bold reforms at the heart of Modi’s stated plan to make India self-reliant so that any other crisis that may emerge in future could be efficiently tackled. Below we collate all the details that emerged in five tranches over the past five days.

FIRST TRANCHE

 

MSME measures

  1. Collateral free automatic loans- a move that’ll enable 45 lakh units to restart work and save jobs. 4 year tenor with 12 months moratorium. 100% credit guarantee on principal and interest – Rs. 3 Lakh Crores (60k Cr cover)
  2. Subordinate debt provision of Rs 20,000 crores for 2 lakh stressed MSMEs. Besides, there will be Rs 50,000 crore equity infusion via Mother fund-Daughter fund for MSMEs that are viable but need handholding. A fund of funds with corpus of Rs 10,000 crore will be set up to help these units expand capacity and help them list on markets if they choose.
  3. Definition of MSMEs revised — the move will allow MSMEs to aim for expansion without losing benefits. Differentiation between manufacturing and service units to be removed.

Micro units – Investments upto 1 Cr + Turnover upto 5 Cr

Small units – Investments upto 10 Cr + Turnover upto  50 Cr

Medium units – Investments upto 20 Cr + Turnover upto  100 Cr

  1. Government tenders upto 200 Crores will no longer be on global tender basis. Global tenders will be disallowed for upto 200 Crores. This will make MSMEs eligible to participate in Government purchases.
  2. Post Covid, e-market linkage to be provided for all MSMEs. Receivables by MSMEs from the Central Government and all PSUs will be cleared in next 45 days

For non-bank lenders

  1. Rs 30,000 crore special liquidity scheme for investing in investment grade debt paper of NBFCs, HFCs and MFIs. These NBFCs are those that are also funding MSMEs. These will be fully guaranteed by government of India.
  2. Rs 45,000 crore partial credit guarantee scheme 2.0 for NBFCs. The first 20% loss will be borne by the guarantor that is government of India.
  3. For Discoms, a one-time emergency liquidity injection of Rs 90,000 crore against all their receivables. The states will guarantee it.

For employees

  1. Liquidity relief of Rs 2,500 crore EPF support to all EPF establishments. The EPF contribution will be paid by the govt for another 3 months (till August). It will benefit more than 72 lakh employees.
  2. Statutory EPF contribution for all organisations and their employees covered by EPFO to be reduced to 10% from 12% earlier (This doesn’t apply to govt organisations). This will help infuse Rs 6,750 cr of liquidity into these organisations.

For Power distribution companies

  1. Power distribution companies will get Rs 90,000 crore liquidity against receivables from state-owned Power Finance Corp. and Rural Electrification Corp. This will allow these discoms to pay dues to power producers.

For Contractors & others

  1. An extension of up to 6 months (without costs to contractor) to be provided by all Central Government Agencies like Railways, Ministry of Road Transport & Highways, Central Public Works Dept.
  2. On real estate, urban development ministry will issue advisory to states/UTs so that the regulators can invoke force majeure. The regulators can suo moto extend completion/registration dates for six months for projects expiring on or after March 25, 2020.
  3. A reduction of 25% of existing rates of Tax Deducted at Source (TDS) & Tax Collection at Sources (TCS) from tomorrow till March 31, 2021. This will release Rs 50,000 crores.

Due date of all Income Tax Return filings extended from July 31 to November 30. Vivaad se Vishwas scheme extended till December 31,2020, without any extra payments.

All pending refunds to charitable trusts and non-corporate taxpayers (but including LLP) will be issued immediately

Date of assessments getting barred as on Sep 30, 2020 extended to December 31, 2020. Date of assessments getting barred as on March 31, 2021 extended to September 30, 2021.

SECOND TRANCHE

Focus on migrant workers, small farmers and the poor, in the manner shown below:

Free food for migrants

  1. For those migrants who don’t have NFSA cards or state cards, 5 Kgs of wheat or rice per person and one kg channa per family per month for next two months to be provided and it will reach through the state governments. This will entail Rs 3,500 crore and is likely to benefit around 8 crore migrants.

One Nation, One Ration Card

  1. National Portability Ration Cards can be used in any ration shops that will be applicable across the country. By August 2020, 67 cr beneficiaries in 23 states or 83% of all PDS beneficiaries will get covered. By March 2021, 100 per cent will be covered.

Rental accomodation

  1. Under PM Awas Yojaana, scheme for rental housing for migrant workers. Under the scheme incentives will be offered to private manufacturing units and industrial units to develop affordable housing, converting govt funded houses into affordable renting accommodations for migrant workers. Shall be done on PPP on concessionaire basis. State government agencies will also be incentivised to develop affordable housing.

MUDRA Shishu loan

  1. Those who have availed loans up to Rs 50,000, an interest subvention of 2% for next 12 months after the moratorium period extended by RBI ends. Three crore people will get benefit of Rs 1500 crore.

Street Vendor

  1. Special scheme for street vendors to avail Rs 5,000 crore loan facility. Will be given Rs 10,000 of working capital.

Affordable Housing

  1. Credit-linked subsidy scheme for middle income households in the income group Rs 6-18 Lakh extended to March 2021. The CLSS scheme was operationalised from May 2017 and extended up to March, 2020. Now, it has been extended till March 2021. This will lead to investments  of Rs 70,000 crore in housing and kick-start sectors like steel, cement and create jobs.

For Tribals

  1. Rs 6,000 crore worth of proposals have come from states under CAMPA funds. Tribal people will get employment in forest management, wildlife protection/management and other forest related activities.

For Small/Marginal Farmers

  1. The government is extending Rs 30,000 crore additional capital emergency funds through NABARD for post-harvest Rabi and Kharif related activities for small and marginal farmers.
  2. Under the PM Kisan Credit Card, Rs 2 lakh crore of concessional credit to boost farming activities and it will benefit 2.5 crore farmers. Those in animal husbandry and fisheries will also be included.

THIRD TRANCHE

For framers, and such sectors as food processing and allied activities.

For Upgrading Infrastructure

  1. One lakh crore fund for strengthening the farm gate infrastructure like cold chains, post harvest storage infrastructures etc.
  1. Rs 10,000 crore fund for micro food scheme will be executed with cluster based approach. Will benefit 2 lakh Micro Food Enterprises. For instance, Bihar can have Makhana cluster, Kashmir can have Kesar cluster, Telangana can have Turmeric cluster, Andhra can have chilli cluster.
  1. Govt will launch Pradhan Mantri Matsya Sampada Yojana for development of marine and inland fisheries. Rs 20,000 crore will be spent to fill the gaps in value chains. This will lead to an additional fish production of 70 lakh tons in next five years and provide employment to 55 lakh people.
  1. Rs 13,343 crore for vaccination of livestock in India to eradicate foot and mouth disease.
  1. Rs 15,000 crore will be spent on ramping up the dairy infrastructure. Also, investments will be made in cattle feed.
  1. Rs 4,000 crore for growing of herbal and medicinal plants. Ten lakh hectares of land will be used for growing medicinal and herbal plants and will provide income of nearly Rs 5,000 crore for farmers.
  1. Rs 500 crore have been allocated for beekeeping. This will help 2 lakh beekeepers.
  1. TOP to TOTAL: Rs 500 crore for Operation Greens that will be extended beyond tomatoes, potatoes and onion and will applicable to all vegetables.

Proposes amendment to Essential Commodities Act to enable better price realisation for farmers. Food stuffs including edible oils, oilseeds, pulses, onions and potato will be deregulated. And stock limits will be imposed only under exceptional circumstances like famine and surge in prices.

Agriculture Marketing Reforms

32. A central law will be formulated to provide (a) Adequate choices to sell produce at attractive price, (b) Barrier free inter-state trade, and (c) Framework for e-trading of agriculture produce.

Agriculture Produce Price and Quality Assurance

33. Facilitative legal framework will be created to enable farmers for engaging with processors, aggregators, large retailers, exporters etc. in a fair and transparent manner. Risk mitigation for farmers, assured returns and quality standardisation shall form integral part of the framework.

FOURTH TRANCHE

For Upgrading Infrastructure

Included structural reforms in 8 critical sectors- Coal, Minerals Defence Production, Airspace management, Social Infrastructure Projects, Power distribution companies, Space sectors and Atomic Energy.

Coal Sector

Government is introducing the commercial mining of coal. India needs to reduce import of substitutable cal and increase self-reliance in coal production.

34. The investment of Rs. 50,000 crores is for the evacuation of enhanced CIL’s (Coal India Limited) target of 1 billion tons of coal production by 2023-24 plus coal production from private blocks.

Minerals

35. Enhancing private investment in mineral sector.

 36. FMalso explained the rationalisation of stamp duty payable at the time of award of mining leases.

37. 500 mining blocks would be offered through an open and transparent auction process, a joint auction of Bauxite & Coal mineral blocks will be introduced to enhance Aluminum industry’s competitiveness.

Defence Production

38. Indigenization of imported spares, separate budget provisioning for domestic capital procurement.

39. FDI limit in defence manufacturing under automatic route is being raised from 49% to 74%.

40. Corporatisation of Ordnance factory board was also announced.

Civil Aviation (Airspace Management, World Class Airports Through PPP, MRO HUB)

41. Restrictions on the utilisation of Indian Air Space will be eased so that civilian flying becomes more efficient.

42. Government is working hard to make India a global hub for for aircraft maintenance, repair and overhaul.

43. Airports Authority of India has awarded 3 airports out of 6 bid for operation & maintenance on (PPP) basis. Additional investment by private players in 12 airports in first & second rounds expected around Rs 13,000 crores.

Power Sector Reforms

44. Power Distribution Companies in Union Territories to be privatised in line with the new tariff policies. This will enable to strengthen industries and bring in efficiency in the entire power sector. This will also enable stability in the sector, announced the FM.

Boosting Private Sector investment

45. Boosting private sector investment  in Social Infrastructure through revamped Viability Gap Funding Scheme of Rs 8,100 crores.

Space Sector

46. Boosting private participation in space sectors. Government is working on a liberal geo-spatial policy. Private sector to be co-traveller in India’s space sector journey through launches, satellite services, commented the Finance Minister.

Atomic Energy

47. The government intends to link India’s robust start-up ecosystem to the nuclear sector – Technology Development cum Incubation Centres will be set up for fostering synergy between research facilities and tech entrepreneurs. Establishment of research reactor in PPP mode for production of medical isotopes.

Fifth Tranche

48. MGNREGS: Additional funding of Rs 40,000 crore to the scheme over and above the Budgetary Estimate.

49. Health: All districts will have infectious disease hospitals while at the block-level, public health labs will be set up.

50. Education: PM eVidya programme to be launched immediately. Each Classroom from 1 to 12 will have one TV channel. Special e-content for visually & hearing impaired. Top 100 universities will be permitted to start online courses by May 30, 2020.

51. IBC reforms: Covid-related debt to be excluded from definition of default under the IBC. No fresh insolvency for next one year. Minimum threshold to initiate insolvency raised to Rs one crore from Rs one lakh earlier.

52. Decriminalising Companies Act: Violations under most of the Companies Act to be decriminalised. This will ease the burden on courts and tribunals. Seven compoundable offences under Companies Act being dropped, 5 offences to be dealt under alternative framework.

53. Listing norms: Companies can now list securities directly in foreign jurisdictions

54. New Public Sector Policy: Public sector enterprise policy: All sectors are open to the private sector while public sector enterprises will play an important role in defined areas. Govt will notify strategic areas and in them at least one PSE will remain but private sector will be allowed. In other sectors, PSEs will be privatised.

55. Additional resources to States: Centre has decided to increase borrowing limit of states from 3% to 5% for FY21. This will give extra resources of Rs 4.28 lakh crore to states. This despite, states having borrowed only 14% of the limit authorised to them. 86% remains unutilised. The additional borrowing limit has been linked with initiating reforms.

The finance minister also gave a break up of how the Rs 20 lakh crore was allocated among the five tranches and the previous schemes as well as the RBI measures.

Govt approval must for all FDIs from neighboring countries including China, in same lines as made by several countries

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ASSOCHAM Secretary said that by amending the FDI rules through the Press Note No 3 , the Department for Promotion of Industry and Internal Trade, has not only brought the FDI proposals for greenfield investments but also infusion into the existing projects, under the ‘government route’

The government has amended the Foreign Direct Investment (FDI) policy to discourage opportunistic investment in Indian companies by neighbouring countries in the midst of the Coronavirus pandemic.

This comes after China’s central bank recently raised stake in Housing Development Finance Corporation (HDFC) to a little over 1 percent.

As per the new amendment, FDI investments into Indian companies from the neighbouring countries will now require a nod from the government. This will be applicable to all countries that share a land border with India – such as China among others.

The amendment specifies that transfer of ownership of Indian companies arising out of FDI investments from neighbouring countries will now also be subject to government approval.

Similar FDI restrictions were earlier placed on Pakistan and Bangladesh.

These changes were notified via a Press Note by the Department for Promotion of Industry and Internal Trade (DPIIT).

As per the note, “Government has reviewed the FDI policy for curbing opportunistic takeovers or acquisitions of Indian companies due to the current COVID-19 pandemic.”

The note states: “A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route.”

“Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment,” it said.

“In the event of the transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the restriction/purview of the mentioned sectors, such subsequent change in beneficial ownership will also require Government approval,” it added.

The decision will take effect from the date of Foreign Exchange Management Act (FEMA) notification.

Earlier, reports said that market regulator Securities and Exchange Board of India (SEBI) was monitoring equity transactions in India by Chinese companies and banks. Such transactions have come under the scanner at a time when the share prices of companies have dropped due to the economic impact of the coronavirus pandemic.

Globally, transactions by Chinese firms and institutions have come under scrutiny recently since the assets are being purchased at low valuations. Nations such as the US, Japan and Australia have already placed restrictions on Chinese companies buying assets.

Source:Amendment of FDI Policy

Government releases compliance schedule to ensure MSME payments

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With a spate of corporate irregularities coming to the fore, the Centre has decided to make disclosure norms more stringent. Specified Companies (Furnishing of information about the payment to micro and small enterprise suppliers)
Every specified company shall file in MSME Form I details of all outstanding dues to Micro or small enterprises suppliers (whose payment is due or not paid within 46 days) dealing with MSME shall mandatorily file a return with MCA in e-form MSME-1.

Directors of companies delaying payments for supplies made by small businesses will face imprisonment up to six months or pay fines between Rs 25,000 and Rs 3,00,000.

The Ministry of Corporate Affairs has notified new guidelines to address the concerns of small businesses over delayed payments that not only makes it mandatory for all companies to file half yearly returns detailing outstanding dues to MSME suppliers but also assign reasons if such delays are for more than 45 days.

The new rules have been implemented to put pressure on companies to pay up.

Under the proposed changes, every private and public company will mandatorily file “MSME FORM I” with the the Registrar of Companies (RoC) by February 22 with details of all outstanding dues to MSME suppliers existing on the date of notification of rules on January 22.

In addition, all entities will also have to file a return as per MSME Form I by October 31 for the period from April to September and by April 30 for the period from October to March.

If there are any delays in payments, it has to be mentioned in the returns with the MCA reserving the right to penalise defaulting entities.

In order to ensure adherence to the new rules, MCA has also proposed a fine of up to Rs 25,000 on companies defaulting in filing the information or delaying payments.

The fines for directors, chief financial officer and company secretary of a defaulting company has been specified at not less than Rs 25,000 up to Rs 3,00,000 per person with provision also for imprisonment up to six months.

The new rules will be applicable for every company that received goods or services ‘from’ MSME segment for which payment is due for 45 days or more.

The companies that have no outstanding payments to MSMEs or such outstanding payments are not for more than 45 days are not required to file details in the specified form.

For the purpose of new rules, MSMEs are defined on the basis of capital investment made in plant and machinery, excluding investments in land and building.

Manufacturing units having investment below Rs 25 lakh were termed Micro, those between Rs 25 lakh and Rs 5 crore termed as Small and from Rs 5 crore to Rs 10 crore as Medium.

Similarly, for Service units, corresponding investment thresholds were upto Rs 10 lakh Micro, between Rs 10 lakh to Rs 2 crore Small and between Rs 2 crore to Rs 5 crore Medium.

Source: Business Standard

President promulgates Unregulated Deposit Scheme Ordinance

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The law provides for attachment of properties or assets and subsequent realisation of assets for repayment to depositors.

The President on Thursday promulgated the Banning of Unregulated Deposit Scheme Ordinance which seek to curb the menace of ponzi schemes and make such unregulated deposit scheme punishable.

The Ordinance will help put a check on illicit deposit taking activities like Saradha scam and Rose Valley chit fund scam in the country that dupe poor and the financially illiterate of their hard earned savings.

The legislation contains a substantive banning clause which bans deposit takers from promoting, operating, issuing advertisements or accepting deposits in any unregulated deposit scheme.

“No deposit taker shall directly or indirectly promote, operate issue any advertisement soliciting participation or enrolment in or accept deposits in pursuance of an unregulated deposit scheme,” the Ordinance said.

The law also proposes to create three different types of offences — running of unregulated deposit schemes, fraudulent default in regulated deposit schemes, and wrongful inducement in relation to unregulated deposit schemes.

The Ordinance also provides for severe punishment ranging from 1 year to 10 years and pecuniary fines ranging from Rs 2 lakh to Rs 50 crore to act as deterrent. It too has adequate provisions for disgorgement or repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally.

The law provides for attachment of properties or assets and subsequent realisation of assets for repayment to depositors. Clear-cut timelines have been provided for attachment of property and restitution to depositors.

It also enables creation of an online central database for collection and sharing of information on deposit-taking activities in the country.

Being a comprehensive union law, it adopts best practices from state laws, while entrusting the primary responsibility of implementing the provisions of the legislation to the state governments.

HIGHLIGHTS OF BUDGET 2019

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HIGHLIGHTS OF BUDGET 2019

1. Within 2 years, Tax assessment will be done electronically
2. IT returns processing in just 24 hours
3. Minimum 14% revenue of GST to states by Central Govt.
4. Custom duty has been abolished from 36 Capital Goods
5. Recommendations to GST council for reducing GST rates for home buyers
6. Full Tax rebate upto 5 lakh annual income after all deductions.
7. Standard deduction has been increased from Rs. 40,000 to Rs. 50,000
8. Exemption of tax on second self-occupied house
9. Ceiling Limit of TDS u/s 194A has increased from Rs.10,000 to Rs. 40,000
10. Ceiling Limit of TDS u/s 194I has increased from Rs. 1,80,000 to Rs. 2,40,000
11. Capital Gains Tax Benefit u/s 54 has increased from investment in one residential house to two residential houses.
12. Benefit u/s 80IB has increased to one more year i.e. 2020
13. Benefit has been given to unsold inventory has increased to one year to two years.

Other Areas

14. State share has increased to 42%
15. PCA restriction has abolished from 3 major banks
16. 2 lakhs seats will increase for the reservation of 10%
17. 60000 crores for MANREGA
18. 1.7 Lakh crore to ensure food for all
19. 22nd AIIMS has to be opened in Haryana
20. Approval has to be given to PM Kisan Yojana
21. Rs. 6,000 per annum to be given to every farmer having upto 2 hectare land. Applicable from Sept 2018. Amount will be transferred in 3 installments
22. National Kamdhenu Ayog for cows. Rs. 750 crores for National Gokul Mission
23. 2% interest subvention for farmers pursuing animal husbandry and also create separate department for fisheries.
24. 2% interest subvention for farmers affected by natural calamities and additional 3% interest subvention for timely payment.
25. Tax free Gratuity limit increase to Rs. 20 Lakhs from Rs. 10 Lakhs
26. Bonus will be applicable for workers earning Rs. 21,000 monthly
27. The scheme, called Pradhan Mantri Shram Yogi Mandhan, will provide assured monthly pension of Rs. 3,000 with contribution of Rs. 100 per month for workers in unorganized sector after 60 years of age.
28. Government delivered 6 crores free LPG connections under Ujjawala scheme
29. 2% interest relief for MSME GST registered person
30. 26 weeks of Maternity Leaves to empower the women
31. More than 3 Lakhs crores for defence
32. One lakh digital villages in next 5 years
33. Single window for approval of India film maker.

Auditors barred from putting a value on companies they are auditing

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An income tax tribunal has barred auditors from issuing valuation certificates to the companies they are auditing. This is set to impact several tax disputes around valuations in companies including angel tax disputes involving start-ups.

The Bangalore Income Tax Appellate Tribunal (ITAT) said that auditors of a company cannot double up as accountants especially in situations while dealing with “share valuation for the purpose of excess share-premium taxability.”

In several cases the income tax department has disputed valuations of companies around the time of investments.

The ITAT ruling came in a case where the tax department had challenged valuation of a company by its auditor.

In most cases, valuations of startups were challenged by the tax department, leading to “angel tax.” The angel tax controversy surrounds the valuations during various rounds of startup funding. In several cases, the revenues at startups kept reducing or remained stagnant, but their valuations increased. The taxman is questioning the premiums paid by the investors and wants to categorise them as income that would be taxable at 30%. In most cases, the investments made by angel investors, venture capital funds or any other investor have been challenged by the taxman.

Many accountants and valuers are already facing heat from the tax department. ET had, on December 25, reported that the tax department has started issuing show-cause notices to valuation experts, questioning the premiums several startups fetched during their investments rounds.

Valuation experts, however, say that they merely projected and calculated future growth, using the facts and figures provided by the startups. Many tax experts point out that the tax department’s approach to the fair value as a benchmark for calculating premiums may not be accurate in the context of startups.

Income tax officers claim that the scrutiny on startups is mainly due to concerns that black money may have changed hands.

ITAT Ruling

SEBI puts in place new framework to check non-compliance of listing rules

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Sebi has 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 move is aimed at maintaining consistency and adopting a uniform approach in the matter of levy of fines for non-compliance with certain provisions of the listing regulations.

Under the new framework, exchanges would have the power to freeze the entire shareholding of the promoter and promoter group in non-compliant listed entity also holding in other securities, the Securities and Exchange Board of India (Sebi) said in a circular.

Besides, exchanges can levy fines on non-compliant company, move the stocks of such firms to restricted trading category and suspend trading in the shares of such entities.

Further, in case an entity fails to comply with the requirements or pay the applicable fine within six months from the date of suspension, the exchange will need to initiate the process of compulsory delisting.

The new rules would come into force with effect from compliance periods ending on or after September 30, 2018.

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.

According to new rules, Sebi has asked stock exchanges to impose penalties ranging from Rs 1,000-5,000 per day on violation of certain clauses of the listing agreement like non-submission 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.

Such fines will continue to accrue till the time of rectification of the non-compliance to the satisfaction of the concerned recognized stock exchange or till the scrip of the listed entity is suspended from trading for non-compliance with the provisions of Listing Regulations.

Such accrual will be irrespective of any other disciplinary or enforcement action initiated by stock exchanges or Sebi.

Further, if a non-complaint entity is listed on more than one exchanges, the concerned bourses need to take uniform action in consultation with each other.

The board of directors need to be informed about the non-compliance and their comments need be made public so that investors can make informed decisions.

The exchanges would have to disclose on their websites the action taken against the listed entities for non-compliance of the listing conditions, including the details of respective including the details of respective requirement, amount of fine, period of suspension, freezing of shares, among others.

Every bourse is required to review the compliance status of the listed entities within 15 days from the date of receipt of information. Also, exchanges need to issue notices to the non-compliant listed entities to ensure compliance and pay fine within 15 days from the date of the notice.

If any non-compliant listed entity fails to pay the fine despite receipt of the notice, the exchange will initiate appropriate enforcement action including prosecution.

If the non-compliant listed entity complies with the Sebi’s requirement and pays applicable fine within three months from the date of suspension, the exchange will have to revoke the suspension of trading of its shares after seven days of such compliance and trading would be permitted only in ‘trade to trade’ basis for a week from revocation.

Source: Times of India