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SEBI HLC Report on Settlement Mechanism

SEBI seeks public comments on the ‘Report on the Settlement Mechanism’ submitted by the High Level Committee (HLC) under the Chairmanship of Justice A. R. Dave (retd.)

SEBI seeks public comments on the ‘Report on the Settlement Mechanism’ submitted by the High Level Committee (HLC) under the Chairmanship of Justice A. R. Dave (retd.)

1. BACKGROUND

1.1 Settlement for securities laws violations, was introduced in India in the year 2007. It has weathered the challenges in their implementation and facilitated the market regulator to provide a more effective mechanism; the essential concomitants of a legal proceeding, without compromising on deterrence or providing equitable remedies to the affected investors. The Settlement process was codified and the SEBI (Settlement of Administrative and Civil Proceedings) Regulations were notified on January 9, 2014. In pursuit of the objectives of SEBI (to protect the interests of investors in securities and to promote the development of and to regulate the securities market), as new challenges arise it is important to have a convergence or integration of the quasi-judicial processes within SEBI with the alternate dispute resolution process of settlement, to bring forth a more effective harmonized scheme to operate without any conflict and delay. The 2014 Regulations were a major advancement in introducing a mathematical and transparent system of calculating the settlement amount, however certain shortcomings were noticed over a period of time.

1.2 Securities and Exchange Board of India (“SEBI”) has constituted a High Level Committee under the Chairmanship of Justice A. R Dave (retd. Supreme Court of India) assisted by Shri Pratap Venugopal, Advocate on Record, Supreme Court of India, as Member of the Committee.

1.3 The High level Committee was constituted to review the SEBI (Settlement of Administrative and Civil Proceedings) Regulations,  2014 and the Enforcement mechanism of SEBI and to suggest suitable recommendations as it considers necessary. The 2014 Regulations have been examined by the Committee and comprehensively re-worked after taking into account developments in domestic and foreign jurisdictions.

1.4 The Committee has submitted its ‘Report on Settlement Mechanism’ to SEBI on August 10, 2018 wherein it has inter alia recommended issuance of revised regulations for settlement proceedings

2. PUBLIC COMMENTS

Comments from the public are invited on the recommendations contained in the aforesaid Report in the following format:

Name:
Sr. No. Relevant       Chapter       and sub-heading/ regulation / clause/ point Comments and suggested changes, if any Rationale

The comments may either be forwarded by email to settlementdop@sebi.gov.in or may be sent by post to the following address latest by September 1, 2018.

Vijayakrishnan G
General Manager
Legal Affairs Department, Division of Policy
Securities and Exchange Board of India
SEBI Bhavan, Plot No. C4-A, “G” Block,
Bandra Kurla Complex,
Bandra (East), Mumbai -400 051

Issued on: August 13, 2018

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