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CS Professional · IFSCA - Regulations, Listing and Compliances · Listing and Issuance of Securities

Kaveri Infra Ltd's debt securities are listed on an exchange in GIFT IFSC. The company repeatedly fails to pay listing fees and file periodic disclosures despite notices. What is the most appropriate step the exchange can take under its listing rules to protect investors while the default continues?

The exchange may suspend trading for continuing non-compliance and, if the default persists, move to compulsory delisting after giving the company a hearing. Delisting without notice violates natural justice, and bonus issues do not remedy the default.

  1. ASuspend trading in the securities, and if default persists, consider compulsory delisting after giving the company an opportunity of being heardCorrect
  2. BPermanently delist the securities without any notice since fees are a minor matter
  3. CIgnore the default since only IFSCA can ever act on listed entities
  4. DRequire the company to issue bonus shares to cure the default

Explanation

Exchanges can suspend trading for continuing non-compliance and may proceed to compulsory delisting, but only following natural justice, i.e. notice and a hearing. Immediate delisting without notice breaches this principle, and bonus shares do not cure disclosure defaults.

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