Notifications (July 2021)

Notifications

PENALTIES TO BE IMPOSED BY SEBI FOR EXCHANGE GLITCHES

The Securities and Exchange Board of India (SEBI), India’s securities market regulator, has imposed penalties on stock exchanges for technical problems that result in financial losses for investors. With an increased reliance on technology, a large system failure would result in economic disruptions and the loss of services. It has decided to penalize bourses after assessing the importance of maintaining the systems’ ongoing operation from the perspective of market participants. It’s a good idea to set a limit on how long MIIs can be offline (market infrastructure institutions).

MIIs, the chief technology officer and managing director of MIIs, will incur a financial penalty if the downtime exceeds a predetermined level. MIIs are needed to constantly assess the efficiency and functionality of their systems as a result of the tightening of requirements, avoiding technical glitches. 

If an event causes a business disruption, the bourse must disclose the reasons to SEBI within two hours, according to SEBI regulations. Within 24 hours following the occurrence, the exchange must produce a preliminary report, and within 21 days, a complete root-cause analysis and corrective actions must be submitted. A financial penalty of Rs 1 lakh per business day is applied if the exchange fails to submit the root-cause study. Furthermore, if the exchange is unable to address the error, it will be penalized. SEBI recently required that if essential systems are disrupted, the affected bourse must declare the situation a disaster within 30 minutes, failing which the bourse must declare the incident a disaster. 

If the exchange does not resume operations within 45 minutes of the incident being declared, a penalty of 10% of the exchange’s average standalone net profit for the previous two financial years, or Rs 2 crore, whichever is greater, would be imposed. Aside from that, the exchange’s chief technology officer and managing director would be penalized 10% of their annual compensation.

TO READ THE OFFICIAL NOTIFICATION CLICK HERE

WHOLESALERS AND RETAILERS ARE FREE TO SWITCH TO THE NEW UDYAM PORTAL AND REGISTER ANEW

Following the government’s announcement that retail and wholesale trades would be reclassified as MSME, the Reserve Bank of India (RBI) has written to banks requesting that they include the two in priority sector financing. The RBI also told all banks that retail and wholesale enterprises will be permitted to register on the MSME registration site. According to the RBI, those who work in the retail and wholesale trade and repair of motor vehicles and motorcycles with NIC code 45, wholesale trade except for motor vehicles and motorcycles with NIC code 46, and retail trade except for motor vehicles and motorcycles with NIC code 47 will be eligible for the revised guideline. Enterprises that have a Udyog Aadhaar Memorandum (UAM) under one of the three NIC Codes can now migrate to the Udyam Registration Portal or file a new Udyam Registration.

TO READ THE OFFICIAL NOTIFICATION CLICK HERE

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