Now Reading: SEBI proposes overhaul to cut settlement costs by half
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SEBI proposes overhaul to cut settlement costs by half
SEBI has proposed a sweeping overhaul of its settlement framework, aiming to halve the gap between settlement amounts and actual penalties. The regulator found that rejected or withdrawn settlement applications demanded on…
The Story in Brief
SEBI has proposed a sweeping overhaul of its settlement framework, aiming to halve the gap between settlement amounts and actual penalties. The regulator found that rejected or withdrawn settlement applications demanded on average eight times the eventual penalty; the new formula targets a four-times ratio. A fast-track route for cases up to ₹10 lakh will skip the High Powered Advisory Committee and go directly to whole-time members. Applicants will get 60 days to settle before a show-cause notice and 90 days after one, up from 60 days. The regulator also proposes reducing the refiling penalty from 50% to 20% and allowing rejected applicants to reapply if circumstances change. Public comments are invited until 4 September.
The Indian Opinion
The narrative that SEBI is either going soft on violators or merely streamlining bureaucracy misses the point. The old settlement demands were eight times the final penalty, punitive beyond deterrence. A fairer formula that mirrors likely penalties, not inflated guesses, is overdue. The test lies in implementation: will the fast-track route for cases up to ₹10 lakh actually clear cases within months, or will procedural delays persist? Watch the first batch of fast-track settlements to see if speed matches promise.
Sources (2): thehindubusinessline.com, livemint.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
