Market regulator SEBI (Securities and Exchange Board of India) has said it'll impose an additional penalty of 3 per cent of the total value of the delivery default in the case of 'repeated default' by a seller or a buyer. The measure has been taken to put in place a deterrent mechanism to address instances of repeated delivery defaults.
SEBI had specified delivery default norms via a circular on March 23.
"In the case of repeated default by a seller or a buyer, for each instance of repeated default, an additional penalty shall be imposed, which shall be 3% of the value of the delivery default," the SEBI circular said.
It added that repeated default will be defined as an event wherein a default on delivery obligations takes place three times or more during six months on a rolling basis.
"The penalty levied shall be transferred to Settlement Guarantee Fund (SGF) of the Clearing Corporation," the circular said.
The circular will be effective after one month from the date of its issuance.
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