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The Securities and Exchange Board of India (Sebi) has rejected 15 attempts at settling regulatory proceedings through monetary payment during June and July. With this, the number of such rejections since the new rules came into effect in May 2012 is less than 10 short of the 200-mark.
The latest breaches sought to be settled through the so-called consent mechanism include those on rules against fraudulent and unfair trade practices, according to a disclosure on the regulator’s website.
SIC Stock and Services, Sumeet Industries and Sitaram Prints were among those which had applied, it said.
“The pending proceedings in these cases will continue in accordance with law. The rejection of consent application, however, shall not prejudice the pending proceedings in any manner,” said the order. The 15 applications were between June 11 and July 23.
The regulator has rejected 194 applications since May 25, 2012, when it came out with revised guidelines for the consent order process. These had severely curtailed its own power to allow monetary settlement in the case of serious charges such as insider trading. However, it still allowed for such settlement by a high powered advisory committee or a panel of wholetime members (WTMs).
Recent changes in securities’ law through an ordinance also brought the consent order norm under the regulatory framework.
Other offences kept out of the regular purview of the consent mechanism included manipulation of the net asset value of a mutual fund, front running and failure to make an open offer.
The consent proceedings can also have a bearing on the progress of the investigation. The investigation or proceedings against the entity applying for consent is not supposed to issue a final order till the consent proceedings are on. The relevant person or authority is informed of the application and may continue the proceedings, except passing the final order, according to the Sebi circular on the consent process.
“In cases where the criminal complaint has not yet been filed but is envisaged, the filing of a complaint may be kept in abeyance till the conclusion of the consent proceedings. In case of rejection of the terms of consent by the panel of WTMs, the said proceedings shall be continued from the stage at which it was pending,” said the Sebi circular.
