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Introduction: The Securities and Exchange Board of India (SEBI) has announced the introduction of a third Settlement Scheme aimed at resolving trading irregularities in the illiquid stock options segment of the Bombay Stock Exchange (BSE). This article delves into the specifics of the scheme, its objectives, and its implications for entities involved in the specified trading activities.

Detailed Analysis:

1. Background: SEBI’s decision to introduce the Settlement Scheme stems from the need to address trading activities conducted by certain entities in the illiquid stock options segment between April 01, 2014, and September 30, 2015. These entities have been subject to proceedings initiated by various authorities or forums, including Adjudicating Officers, the Securities Appellate Tribunal (SAT), Courts, and Recovery Officers.

2. Scheme Details: The Settlement Scheme offers an opportunity for entities involved in reversal trades during the specified period to settle proceedings pending against them. By availing of this scheme, entities can expedite the conclusion of proceedings and avoid prolonged legal processes and associated expenses.

3. FAQ Availability: To provide clarity and guidance, SEBI and BSE will make frequently asked questions (FAQs) regarding the Scheme available on their respective websites starting March 11, 2024. These FAQs will address common queries and assist entities in understanding the scheme’s intricacies.

4. Validity Period: The Scheme will be operational from March 11, 2024, to May 10, 2024, inclusive of both dates, unless extended by the Competent Authority. Entities interested in availing of the settlement opportunity must adhere to the specified timeframe.

5. Consequences of Non-Participation: Entities failing to utilize the Settlement Scheme within the stipulated period will be subject to actions in accordance with relevant securities laws. This includes continued proceedings and potential legal consequences for non-compliance.

Conclusion: SEBI’s ISO Settlement Scheme 2024 presents a significant opportunity for entities involved in illiquid stock options trading to resolve pending proceedings and mitigate legal risks. By opting for settlement, entities can streamline the resolution process and avoid prolonged litigation. However, it is imperative for eligible entities to assess the Scheme’s terms and act within the specified timeframe to benefit from its provisions. Stay informed through SEBI and BSE’s official channels for further updates and clarifications.

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Securities and Exchange Board of India

ISO Settlement Scheme, 2024

1. Securities and Exchange Board of India (SEBI) has decided to introduce a third Settlement Scheme (hereinafter referred to as “the Scheme”) in the matter of trading activities of certain entities in the illiquid stock options segment of Bombay Stock Exchange (BSE) in terms of Section 15JB of the SEBI Act, 1992 read with Regulation 26 of SEBI (Settlement Proceedings) Regulations 2018. The Scheme would provide a settlement opportunity to all the entities that have executed reversal trades in the stock options in the period between April 01, 2014 and September 30, 2015, against whom proceedings have been initiated and are pending before any authority or forum, viz. Adjudicating Officer/ the Hon’ble Securities Appellate Tribunal (SAT)/ Hon’ble Courts/ Recovery Officer (provided an appeal has been filed and the same is pending before the Hon’ble SAT/Court). By availing the benefit of the scheme, the entities may settle such proceedings and avoid further delay in the conclusion of the said proceedings and the associated long drawn legal processes/ expenses, etc.

2. The frequently asked questions with respect to the Scheme shall be available on the websites of SEBI and BSE on March 11, 2024.

3. Validity of the Scheme: The Scheme shall commence on March 11, 2024 and end on May 10, 2024 (both days inclusive) or such other date as approved by the Competent Authority.

4. Upon expiry of the Scheme period, actions as per the relevant provisions of securities laws shall be continued against the entities who do not avail this opportunity for settlement.

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