An employee checks documents (Photographer: Balint Porneczi/Bloomberg)

SEBI To Issue Settlement Notice To Entities Under Scrutiny

To fast-track cases, markets regulator SEBI will issue settlement notice to entities undergoing probe against violations like delay in making shareholding disclosures and filing of returns and reports.

Also among other violations is non-disclosure in relation to companies exclusively listed on regional stock exchanges which have exited, besides delay in complying with any other norms set by the Securities and Exchange Board of India.

The board may issue a notice of settlement...calling upon the noticee (entity) to file a settlement application in respect of the specified proceeding(s) to be initiated, upon payment of the settlement amount and or furnishing an undertaking in respect of other non-monetary terms or compliance with other non-monetary terms.
SEBI Notification

However, SEBI said that these proceedings will not be settled in case the applicant failed to make a full and true disclosure of facts.

Explaining the procedure, the regulator said the entity will need to file a settlement application, in a specified form, along with non-refundable fee and further remit the settlement amount within 30 days from the date of receipt of the notice of settlement.

In case of any discrepancy in calculation of settlement amount specified in the settlement notice, the entity will have to seek rectification of the same at the time of filing the application and in such cases SEBI’s decision will be final and remittance will need to be done within 30 days from the date of receipt of the decision of the regulator.

Further, SEBI, in some cases, may grant an extension of a further 15 days for filing of the settlement application, remittance of the settlement amount and furnishing an undertaking in respect of any of the non-monetary terms.

If remittance of the settlement amount is not made or any of the non-monetary terms are not complied, then SEBI may initiate proceedings against the entity.