2 weeks ago
Sebi proposes settlement overhaul with fast-track route for small cases
Sebi is like a referee for the stock market in India.
When companies break the rules, Sebi can punish them.
Sometimes companies want to pay a fine and move on instead of having a long fight.
Sebi wants to make this settling process easier and faster.
For small cases up to Rs 10 lakh, there will be a quicker route.
These small cases will not need a big committee meeting anymore.
Sebi also wants to remove an extra 20 per cent charge for some cases.
It wants the fines to be fair and match the rules better.
This way, companies can settle quickly and Sebi can still keep everyone in line.
Sebi proposed replacing its 2018 Settlement Proceedings Regulations with a new framework to make settlements simpler, faster and more predictable.
A new fast-track route would handle settlement cases involving up to Rs 10 lakh without a High Powered Advisory Committee meeting.
Sebi plans to scrap the additional 20 per cent settlement charge currently applied when multiple enforcement proceedings are settled together.
Settlement amounts would be linked to minimum penalties prescribed under securities laws, with multipliers based on the applicant's category.
Sebi found settlement amounts were on average about eight times final penalties; the proposed framework could bring the ratio down to around four times.
- Who
- The Securities and Exchange Board of India (Sebi), the country's securities market regulator.
- What
- Proposed an overhaul of its settlement framework, including a fast-track route for cases up to Rs 10 lakh and removal of an additional 20 per cent settlement charge.
- Where
- India, with the consultation paper reported from New Delhi.
- When
- Not specified in the article.
- Why
- To make settlement of enforcement proceedings simpler, faster and more predictable while retaining deterrence.
Key facts
- Regulator
- Securities and Exchange Board of India (Sebi)
- Proposal
- Overhaul of settlement framework via consultation paper
- Fast-track threshold
- Up to Rs 10 lakh
- Charge removal
- Additional 20 per cent settlement charge for multiple-proceedings cases
- Current regulation
- Sebi (Settlement Proceedings) Regulations, 2018
- Settlement-to-penalty ratio
- About 8 times currently; proposed around 4 times
- Approval route
- Internal Committee to panel of Whole Time Members, skipping HPAC for small cases
Quotes
Securities and Exchange Board of India (SEBI)
Regulator overseeing securities market enforcement
“the settlement amounts proposed were, on average, about eight times the penalties finally imposed. Under the proposed framework, the ratio could come down to around four times, the Securities and Exchange Board of India (SEBI) said, adding that the revised approach would retain deterrence while making settlement more attractive.”
thehansindia.com
Sources
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