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Market regulator Securities and Exchange Board of India (Sebi) today issued draft regulation-- Sebi(Settlement of Administrative and Civil Proceedings) Regulations, 2013--for settling disputes under the so-called consent mechanism.
Similar to an out-of-court settlement, under the consent process Sebi settles charges against violators, without admission or denial of guilt, for a penalty.
The proposed regulations are in line with a circular issued by Sebi in May 2012 detailing the consent mechanism framework.
Sebi has kept serious offenses like insider trading and front running out of the ambit of consent settlement.
Sebi has also said that an entity will have apply for a settlement within 60 days from it gets served with a show cause notice.
The consent process had attained legal sanity when an ordinance was promulgated by the president of India in October to give Sebi more powers.
Earlier, due to lack of legislative backing, public interest litigation were filed in high courts for scrapping Sebi's consent circulars.
Sebi has invited public comments on the draft Sebi (Settlement of Administrative and Civil Proceedings) Regulations till October 30.
