SEBI mulls summary proceedings for breach of norms by intermediaries
This story was originally published at 20:45 IST on 16 July 2024
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--SEBI mulls summary proceedings for breach of norms by intermediaries
--SEBI paper: Summary proceedings only for breach obvious in nature
MUMBAI – The Securities and Exchange Board of India today released a public consultation paper proposing to bring back summary proceedings against intermediaries for obvious violations, or where the cases need minimal evidence to corroborate facts. This, according to the SEBI paper, would cover violations such as non-payment of fees to keep their registration in force, or failure to submit periodic reports within SEBI-specified timelines.
SEBI said that summary proceedings were earlier a part of erstwhile regulations on procedure of holding enquiry by enquiry office and imposing penalty. However, these regulations were repealed in May 2008 when new regulations for intermediaries were promulgated.
The market regulator proposed in the paper that provisions for summary proceedings to handle cases of specific violations of securities laws be incorporated in the intermediaries regulations.
The SEBI paper detailed the procedure for summary proceedings. The intermediary will be given 21 days to submit its response and SEBI will pass an order within 21 days of receipt of response.
The specific conditions under which these proceedings could take place, according to the SEBI paper, include cases where an intermediary has admitted the violation, and of misleading claims of returns or performance, fee non-payment, failure to submit periodic reports for three or such consecutive periods as may be specified, expulsion of a member by stock exchange or clearing corporation, and intermediary not being traceable. End
Reported by Rajesh Gajra
Edited by Deepshikha Bhardwaj
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