'Major offences, repeat violations can't be settled'

'Major offences, repeat violations can't be settled'

As the Sebi tightens its noose on those violating securities laws and defrauding investors, Chairman U K Sinha has warned that repeat offenders and those indulging in major offences like insider trading can't seek settlement of their cases by paying some charges.

At the same time, Sebi is open to consider the settlement pleas of those suspected of small offences in the capital markets, provided those violations are not to the detriment of retail investors or the overall marketplace, so that the regulator can sharpen its focus on probing serious cases.

The Sebi said that the regulatory authority has made a very robust settlement mechanism, which is stronger than the prevailing norms in many developed markets including the US, and is now being followed by regulators in some other countries.
A consent mechanism is in place at Sebi since 2007, which allows an entity being probed for suspected violations to settle the case after payment of settlement fees and other applicable charges, without admitting or denying the guilt.

This framework was tightened further in 2012, while newly enacted Securities Laws Amendments Act has converted it into regulation with necessary legal backing for such settlements. Sebi’s orders in these matters can not even be challenged now.
To further streamline these norms, Sebi has put in place a detailed 'mathematical' formula and has adopted a scientific approach to determine the settlement charges required to be paid by concerned entities.

DH Newsletter Privacy Policy Get the top news in your inbox
Comments (+)