SEBI specifies additional penalty for repeated delivery default
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- Last Updated on 19 August, 2021
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CIRCULAR NO. SEBI/HO/CDMRD/DRMP/CIR/P/2021/619, Dated 17.08.2021
In order to put in place a sufficient deterrent mechanism to handle instances of repeated delivery defaults, the SEBI has stated that in the case of a ‘repeated default’ by a seller or a buyer, an extra penalty of 3% of the total value of the delivery default will be imposed. Here, the term Repeated Default shall be defined as an event, wherein a default on delivery obligations takes place 3 times or more during a six months period on a rolling basis.
The penalty levied on Repeated Default shall be transferred to the Settlement Guarantee Fund (SGF) of the Clearing Corporation. However, the circular shall be effective after one month from the date of issuance of the circular.
Read the Full Circular Here
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