SEBI Amends Enquiry Process Framework For Intermediaries
The Securities and Exchange Board of India has amended the norms pertaining to holding of enquiry against intermediaries in order to rationalise the process and avoid duplication of proceedings before designated authorities and designated members.
The move comes after the board of SEBI approved amended to intermediaries regulations last month. With regard to the process that needs to be adopted in enquiry proceedings, the regulator said an opportunity of personal hearing could be considered by the Designated Authority.
After conducting a detailed enquiry and considering all representations and the facts and circumstances of the case, the DA may submit a report recommending appropriate action, SEBI said in a notification dated Jan. 21.
Upon receipt of the report of the DA, the Designated Member may issue a show cause notice calling upon the noticee to submit a reply within 21 days as to why action as recommended by the DA or any other action may not be initiated.
On request of the noticee, the DM after recording reasons in writing may extend the time specified for submitting the reply to the notice.
After considering the submission of the noticee, the DM, if deemed fit, for reasons to be recorded in writing remit the matter to the DA to enquire afresh or to further enquire and resubmit the report.
The DM may consider granting an opportunity of personal hearing in a case where either the DA has recommended cancellation of intermediary registration or the DM is of the prima facie view that the matter is a fit case for cancellation of registration of intermediary.
SEBI also said that it would not be necessary for the DM to give the noticee any opportunity of personal hearing if neither the DA has recommended cancellation of registration nor the DM is of the prima facie view that it is a fit case for cancellation of registration. The DM needs to pass an appropriate order within 120 days from the date of receipt of submissions or the date of personal hearing, whichever is later, Sebi said.
The new norms -- Securities and Exchange Board of India (Intermediaries) (Amendment) Regulations, 2021 -- came into force from Jan. 21.