SEBI resolved 107 cases in FY 22 under settlement mechanism

7 Nov 2022 , 08:52 AM

Up to 107 applications involving violations of securities legislation were resolved, and in 2021—2022, the capital markets regulator SEBI collected settlement fees totalling Rs59 crore.

According to the most recent information provided by SEBI in its annual report, this was significantly less than 216 applications that were resolved by passing suitable settlement orders, and the regulator received Rs68.23 crore in 2020—21.

The settlement orders were issued in cases involving alleged violations of various laws, including the Alternative Investment Funds (AIF) Act, mutual fund regulations, insider trading laws, the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP), and the Listing Obligations and Disclosure Requirements (LODR) Act.

An alleged offender may use the settlement mechanism to resolve a pending matter with the regulator by paying a settlement fee without admitting or denying guilt.

A tool for assuring quick and effective conflict resolution is the settlement process.

150 cases were pending at the start of the 2021—22 term, but 345 settlement applications were received by SEBI during that time.

While 167 applications were refused or withdrawn throughout the year, 107 were resolved by passing the proper settlement orders. Following this, at the end of the time period, 221 applications were still outstanding.

Additionally, under the Settlement Scheme 2020, consolidated settlement decisions were made against 1,018 businesses, and Rs87.38 crore in settlement fees were paid.

These 1,018 organizations made settlement payments totalling between Rs5 and Rs42 lakh.

Additionally, during the year under review, disgorgement charges were Rs24.2 crore. The businesses that were involved in reverse transactions in the stock options segment on the BSE in 2014 and 2015 and against whom enforcement proceedings were launched were given a one-time settlement chance under Settlement Scheme 2020 by SEBI.

To improve the system, SEBI changed the rules governing consent settlements in January of this year. The window for submitting settlement requests has shrunk from 180 to 60 days.

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