Millennium Post

Sebi proposes to tighten timeline for filing settlement applications

New Delhi: Markets regulator Sebi on Tuesday proposed to tighten the timeline of settlement mechanism, whereby it suggested fixing the total timeframe for filing the application at 60 days after receipt of the notice to show cause.

In addition, the regulator has proposed to revise the timelines with regard to remittance of the settlement amount and cumulative time period for submission of revised settlement terms.

The total timeframe for filing the application for settlement may be fixed at 60 days of the date of receipt of the show-cause notice or the supplementary notice, whichever is later, Sebi said in a consultation paper.

"This window would provide the applicant adequate time to apply for settlement and also align the regulations with the objective for which they were framed, i.e. as an effective alternative enforcement policy," it added.

The regulator has recommended that the additional period of 120 days with payment of additional settlement amount may be done away with.

Currently, the entities are provided with a window of 180 days in total to apply for settlement after receipt of the notice to show cause.

On most occasions, the applicants apply for settlement towards the end of this timeframe. Such delays not only do not serve the purpose of the enforcement process but also impede the expeditious disposal of the enforcement proceedings, Sebi noted.

"On the basis of experience gained from dealing with settlement applications since the Settlement Regulations came into effect, it is felt that the settlement terms should be refined to be further harmonised with the specific nature and gravity of violations committed by the entities," the regulator said.

Further, the constraints of the enforcement processes for all stakeholders may be overcome by providing for a more efficacious settlement mechanism that would enable Sebi to utilise its resources even more effectively, it added.

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