All the penalties levied will have to be transferred to the Settlement Guarantee Fund of the clearing enterprise
Our Bureau Market regulator SEBI has levied an additional penalty of 3 per cent on repeated shipping defaults of investors.

SEBI has defined repeated default as a buyer or dealer fails to meet their delivery duty three instances or greater all through a six months period on a rolling basis, a round stated on Tuesday.

The round will come into effect from September 17, it introduced.

The penalty levied may be transferred to Settlement Guarantee Fund of the Clearing Corporation. It is felt that there’s a need to install place a suitable deterrent mechanism to address instances of repeated delivery defaults. This is anticipated to similarly reinforce the delivery mechanism and make certain market integrity, said SEBI.

In March, the regulator had fixed a penalty of 4 in line with cent of the agreement rate plus replacement price on delivery default in agricultural commodities sellers.

While in non-agricultural commodities, the penalty for transport default by using sellers may be at three consistent with cent of settlement price plus replacement fee.

In agricultural and non-agricultural commodities, the provisions for levy of penalty on shipping default by way of buyer the Clearing Corporation will assessment the loss incurred by using the seller, at its sole discretion, and accordingly, levy penalty on the defaulting consumer. However, such penalty shall be in the universal cap of transport margins collected via the Clearing company from such defaulting purchaser, it had stated.