Sebi plans to put in place revised norms for recovering investors' money in cases of illegal collective investment schemes, wherein a registered insolvency professional will be appointed as administrator to undertake sale of assets.

A senior official said the regulator is looking to revise the procedures to be followed after passing of orders in cases related to unregistered collective investment schemes.

In case an entity is not traceable or is not complying with Sebi directions, the recovery officer can appoint an administrator for the purpose of selling the properties attached.

According to the official, only an entity registered with the IBBI as insolvency resolution professional would be considered eligible for appointment as administrator.

The Insolvency and Bankruptcy Board of India (IBBI) is implementing the Insolvency and Bankruptcy Code.

Before appointment as administrator, such an entity should provide an undertaking with Sebi that it does not have any "conflict of interest with the unregistered collective investment scheme entity, its directors, promoters and its group entities," the official said.

According to the official, the proposal is likely to be taken up during Sebi's board meeting scheduled for June 21.

The expenses pertaining to the administrator would be borne by the entity or come from the sale proceeds of the entity's assets.

The official said the administrator can appoint an independent chartered accountant to verify the details of money raised, including payment already made to investors.

The proposed norms would also be applicable in instances of refunding investors in deemed public issues and cases where a particular entity has failed to comply with directions to disgorge ill-gotten gains.

In case the administrator is not able to raise the entire dues by sale of the entity's assets, then repayment would be done on a pro-rata basis.