Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022

On January 14, 2022 Securities and Exchange Board of India has notified SEBI (Settlement Proceedings) (Amendment) Regulations, 2022 in order to amend Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018.

 

Key points:

  • Clause 2 of Regulation 4 has been omitted which provides an exception of sufficient cause for delay in filing an application within 60 days from the date of service of the notice to show cause.
  • Clause (j) has been inserted to Regulation 9 dealing with Settlement Terms providing:
“Restraining from accessing the securities market and/or prohibiting from buying, selling or otherwise dealing in securities, directly or indirectly and associating with the securities market in any manner for a specific period; “
  • A new clause has been inserted in Regulation 13 dealing with Proceedings before the Internal Committee:
“(ba) require the applicant to comply with certain condition precedent(s) within a specified time period for consideration of the application for settlement.”
  • The amendment modifies the period for permitting the applicant to submit revised settlement terms from 10 working days to 15 working days;
  • The proviso to (c) of Regulation 13(2) has been omitted. The proviso stated:

Provided that the revised settlement terms received after ten working days, but within twenty working days may be considered subject to an increase of ten per cent over the recommended settlement amount.

  • Modified the Table specifying mathematical basis for calculating the settlement amount under Chapter III under the regulations:

    1. Reducing the value of Proceeding Conversion Factor (PCF) which was earlier ‘0.65’ for voluntary or confidential settlement, and now reduced to ‘0.40’.
    2. Base amount for each unit of alleged default or on joint liability basis has been revised such as for each count of violation for a body corporate, in a case not involving FUTP or Insider Trading etc. has been revised to Rs. 10 lakhs in comparison to earlier Rs. 15 lakhs.

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