SEBI SHOULD EXTEND THE SEBI SETTLEMENT SCHEME 2020 FROM OCTOBER 31 2020 ...

What is SEBI Settlement Scheme 2020 ?

 

Hence , SEBI has decided to come out with Settlement Scheme (“the Scheme”) in the  the SEBI Settlement Scheme – 2020,

 

The Hon’ble SAT vide its Order dated October 14, 2019 in the matter of R S Ispat Ltd Vs SEBI, has inter alia directed as follows: “…We are adjourning this matter today, so that SEBI may consider holding a LokAdalat or adopting any other alternative dispute resolution process with regard to the Illiquid Stock Options.

 

SEBI Settlement Scheme 2020 – One time Settlement scheme Securities Exchange Board of India (SEBI) vide Public notice dated 27th July, 2020 has issued Public notice in respect of SEBI-Settlement Scheme 2020 to provide one time settlement opportunity to the entities that have executed trade reversals in the stock options segment of BSE during the period from April 1, 2014 to September 30, 2015 against whom any proceedings are pending.

 

There should be wide spread awareness of SEBI Settlement Scheme 2020. The Settlement amount proposed in the Scheme is very high and this Scheme has not evoked good response from more than 14000 entities who had traded in illiquid stock option segment of BSE during 01.04.2014 to 30.09.2015 against whom proceedings are deemed to have been initiated by SEBI.

 

S. No.	Particular	No. of Entities
1	Total entities executed trades on BSE Stock Options Segment	21,652
2	Entities involved in generation of artificial volume by executing non-genuine/reversal trades	14,720
3	No of Companies against which SEBI has initiated  SEBI adjudication proceedings	567

 

 

 

 

The Supreme Court of India ruled in Adjudicating Officer, SEBI v. Bhavesh Pabari (Bhavesh Pabari) granting back the discretionary power to Adjudicating Officer (AO) under supervision and scrutiny of the court.

 

 Supreme Court  overruled its previous decision in Roofit Industries v. SEBI ( Roofit Industries). The highlight of the case is that it provided with controlled discretionary power to the AO, granting them the authority to determine the quantum of the penalty when there is non-compliance of any rules mentioned in the SEBI Act or SCR Act.

 

Criteria for Indicative Settlement Amount for SEBI

1. artificial volume

2. number of non-genuine trades and

 3. number of contracts resulting in creation of artificial volume/ non-genuine trades

4. 0.55 in all cases wherein the entities had executed reversal trades, would be applicable while arriving at the Indicative Settlement Amounts.

 

FAQs on SEBI Settlement Scheme

 

1.What are the Eligibility Criteria?

 the entities who have executed trade reversals on the stock options segment of BSE during the period from April 1, 2014 to September 30, 2015 against whom any proceedings are pending are eligible to avail the one time settlement opportunity.

2. Validity of the Scheme?

Shall commence on August 01, 2020 and end on October 31, 2020 (both days inclusive).

 3. Settlement Application details?

Submit a Settlement application along with an application fee of Rs. 15,000 in case of individuals and Rs. 25,000 in case of body corporates in the specified format, available on the SEBI website and also on the BSE website.

4. Mode of Payment ?

Via online platform as available on the website of SEBI