SEBI Probe
CDSL settles SEBI probe in defaulted debt ISIN case for 13 mln rupees
This story was originally published at 16:32 IST on 27 August 2024
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--CDSL settles SEBI probe in debt securities case for 13 mln rupees
MUMBAI – Central Depository Services (India) Ltd has settled for 13 mln rupees a probe by the Securities and Exchange Board of India into alleged violation of the regulator's circulars on handling of defaulted debt securities, and the debt securities issue and listing regulations.
The specific provisions where breach was alleged by SEBI pertained to the operational framework for transactions in defaulted debt securities post maturity or redemption date. Apart from corporate debt issuers, stock exchanges, and other intermediaries, certain obligations were also cast upon depositories in the SEBI circulars.
In the settlement order issued today, SEBI said it had issued a show-cause notice to CDSL in November 2023, alleging "irregularities in compliance" by the depository with respect to a defaulted debt security. The name of the defaulting issuer was, however, not specified in the settlement order.
SEBI's show-cause notice alleged that CDSL did not comply with the provision on temporary restriction on transactions in debt securities from the maturity or redemption date till the time its status of payment is not determined. Further, according to SEBI's show-cause notice, CDSL did not comply with the provision requiring depositories to coordinate with stock exchanges in updating the security identification number within two working days from the date of intimation from issuer or debenture trustee that the issuer has defaulted on its payment obligations.
With the settlement order being passed, SEBI's regulatory proceedings against CDSL in the matter are deemed to be disposed of.
At 1517 IST, shares of CDSL were flat at 1,539 rupees on the National Stock Exchange. End
Reported by Rajesh Gajra
Edited by Avishek Dutta
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