Capital markets regulator Sebi is planning to make its settlement rules more attractive to help fast-track cases by offering confidentiality and lenient terms for approvers but would not settle cases of wilful defaulters and fugitive economic offenders.
Sebi to overhaul settlement rules
A key amendment includes introduction of confidentiality clause and lesser settlement amount for those offering information about an ongoing or possible violation. Besides, Sebi may give an opportunity to an entity facing possible charges and enforcement actions in certain cases to file a settlement application within 15 days of such a notice.
If an entity fails to file a plea after Sebi's settlement notice, any further settlement attempt will be permitted only after the proceedings are completed at Sebi's end and the matter is pending before a court or a tribunal. Also, the settlement fees and charges have been proposed to be increased as per a "transparent and predictable method of calculation", while the amount would be even higher in cases of delayed filing of application, officials said.
There has been an increase in the number of cases being settled over the past few years and the regulator is keen to further encourage this route to close cases that are not very serious in nature, officials said.
As many as 200 cases were settled for a total amount of over Rs 30 crore in 2017-18, up from 103 cases for Rs 13.5 crore in 2016-17 and 34 cases in 2015-16 for Rs 4.42 crore. Under the proposed changes, an applicant would need to make one application for settlement of all proceedings that have been initiated or may be initiated and make "full and true disclosures" about the alleged defaults.