Short title and commencement.

regulations · 1992 · State unknown

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Parent: THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 (7c4c1f5343adab106c3a94cafc08a5ecf5957ae7)

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Short title and commencement. (1) These regulations may be called the Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018. They shall come into force on the 1 st day of January 2019. GAZETTE OF INDIA SECURITIES AND EXCHANGE BOARD OF INDIA EXTRAORDINARY PART – – III – – SECTION 4 PUBLISHED BY AUTHORITY NEW DELHI, NOVEMBER 30, 2018 NOTIFICATION Mumbai, the 30 th November, 2018 SECURITIES AND EXCHANGE BOARD OF INDIA (SETTLEMENT PROCEEDINGS) REGULATIONS, 2018 No. SEBI/LAD -NRO/GN/ 2018/48 . -In exercise of the powers conferred by Section 15JB of the Securities and Exchange Board of India Act, 1992, Section 23JA of the Securities Contracts (Regulation) Act, 1956 and Section 19-IA of the Depositories Act, 1996 read with Section 30 of the Securities and Exchange Board of India Act, 1992, Section 31 of the Securities Contracts (Regulation) Act, 1956 and Section 25 of the Depositories Act, 1996, the Securities and Exchange Board of India hereby makes the following regulations to provide for the terms of settlement and the procedure of settlement and matters connected therewith or incidental thereto, namely:— CHAPTER I PRELIMINARY Definitions. 2. (1) In these regulations, unless the context otherwise requires, the terms defined herein shall bear the meanings assigned to them below and their cognate expressions shall be construed accordingly, – (a) "Act" means the Securities and Exchange Board of India Act, 1992 (15 of 1992); (b) "alleged default" means an alleged or probable contravention of any provision of the securities laws; (c) "Board" means the Securities and Exchange Board of India established under the provisions of Section 3 of the Act; (d) "Panel of Whole Time Members" means the panel consisting of two or more Whole Time Members of the Boar

Rule TOC

2 · (1) In these regulations, unless the context otherwise requires, the terms defined herein shall bear the meanings assigned to them below and their cognate expressions shall be construed accordingly, –

3 · (1) A person against whom any specified proceedings have been initiated and are pending or may be initiated, may make an application to the Board in the Form specified in Part-A of the Schedule -I.

4 · (1) An application in respect of any specified proceeding pending before the Board shall not be considered if it is made after sixty days from the date of service of the notice to show cause or supplementary notice(s) to show cause , whichever is later.

1 · Omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022 , w.e.f. 14 -01 -2022. Prior to its omission, the provision read as below:

2 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022.

6 · (1) An application may 3 [also] at any time be rejected on the following grounds:

3 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022.

4 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022.

7 · (1) An application may be withdrawn at any time prior to the communication of the decision of the Panel of Whole Time Members under regulation 15.

8 · (1) The filing of an application for settlement of any specified proceedings shall not affect the continuance of the proceedings save that the passing of the final order shall be kept in abeyance till the application is disposed of.

9 · (1) The settlement terms may include a settlement amount and/or non-monetary terms, in accordance with the guidelines specified in Schedule-II.

5 · Substituted for the symbol '.' by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14-01-2022.

10 · While arriving at the settlement terms, the factors indicated in Schedule-II may be considered, including but not limited, to the following:

6 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022.

11 · (1) The Board shall constitute a High Powered Advisory Committee for consideration and recommendation of the terms of settlement.

12 · (1) Internal Committee(s) shall be constituted by the Board.

13 · (1) Save as otherwise provided in these regulations, an application shall be referred to an Internal Committee to examine whether the proceedings may be settled and if so to determine the settlement terms in accordance with these regulations.

7 · [(ba) require the applicant to comply with certain condition precedent(s) within a specified time period for consideration of the application for settlement.]

7 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022.

8 · Substituted for the word 'ten' by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14-01-2022.

9 · Substituted for the symbol ':' by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14-01-2022.

10 · Omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022. Prior to its omission, the provision read as below:

14 · (1) The High Powered Advisory Committee shall consider the proposed settlement terms placed before it along with the following:

15 · (1) The Panel of Whole Time Members shall consider the recommendations of the High Powered Advisory Committee and may accept or reject the same:

11 · Substituted for the word "fifteen" by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020 .

12 · Omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022. Prior to its omission, the provision read as below:

15 · [***]

13 · The words "by way of a demand draft drawn in favour of 'Securities and Exchange Board of India' payable at Mumbai or" omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020 .

14 · Substituted for the words "direct credit in the specified bank account through NEFT/RTGS/IMPS or any other authorized electronic mode of payment" by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020 .

2022 · Prior to its omission, the provision read as below:

17 · Substituted for the word "ninetieth" by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020.

16 · (1) Notwithstanding anything contained in Chapter VI, before initiating any specified proceeding, the Board may issue a notice of summary settlement in the format as specified in Part -A of Schedule -III, calling upon the noticee to file a settlement application under ChapterII and submit the settlement amount and/or furnish an undertaking in respect of other nonmonetary terms or comply with other non-monetary terms, as may be specified in the summary settlement notice in respect of the specified proceeding(s) to be initiated for the following defaults, -

17 · Notwithstanding anything contained in these regulations, where a noticee does not file a settlement application under this Chapter or remit the settlement amount and/or comply with other non -monetary terms to the satisfaction of the Board or withdraws the settlement application at any time prior to the communication of the decision of the Board, the specified proceedings may be initiated, and such a noticee shall only be permitted to file a settlement application in respect of the proceedings pending before the Court or Tribunal, after conclusion of proceedings before the Adjudicating Officer or the Board, as the case may be.

18 · [***]

18 · Chapter VIII omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020. Before the omission, the Chapter VIII read as under:

18 · (1) A notice of settlement in the format as specified in Part-B of Schedule-III, indicating the substance of the probable charges and enforcement actions, may, except in cases covered under Chapter VII, be issued by the Board prior to the issuance of the notice to show cause so as to afford the noticee an opportunity to file a settlement application under Chapter-II, within fifteen calendar days from the date of receipt of the settlement notice.

19 · (1) An applicant seeking the benefit of confidentiality in return for admitting for the limited purpose of settlement of specified proceedings to be initiated and agreeing to provide substantial assistance in the investigation, inspection, inquiry or audit, to be initiated or ongoing, against any other person in respect of a violation of securities laws, shall fulfil the conditions of this Chapter, including –

22 · Notwithstanding anything contained in Chapter X, the following shall be treated as confidential, -

23 · (1) 19 [The Whole Time Member, Adjudicating Officer or the competent officer of the Board before whom the proceedings are pending, shall dispose of the respective proceedings, by an appropriate order, on the basis of the approved settlement terms.]

19 · Substituted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2023 w.e.f. 17 -01 -2023 . Prior to its substitution , the provision read as below:

20 · Omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2023, w.e.f. 17 -01 -2023. Prior to its omission, the provision read as below:

21 · [(2A) In case of specified proceedings which may be initiated or are proposed to be initiated, the Panel of Whole Time Members shall dispose of such proceedings on the basis of the approved settlement terms.]

24 · (1) Save as otherwise provided in these regulations, the provisions with regard to settlement of specified proceedings shall mutatis mutandis apply to an application for settlement of any proceeding pending before the Tribunal or any court.

25 · Settlement orders shall be served on the applicant and shall also be published on the website of the Board:

26 · Notwithstanding anything contained in these regulations, the Board may specify 22 [***] a settlement scheme for any class of persons involved in respect of any similar specified defaults.

21 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Second Amendment) Regulations, 2023 , deemed to have come into force from 17 -01 -2023 .

22 · The words "the procedure and terms of settlement of specified proceedings under" were omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14-012022.

29 · (1) All information submitted and discussions held in pursuance of the settlement proceedings under these regulations shall be deemed to have been received or made in a fiduciary capacity and the same may not be released to the public, if the same prejudices the Board and/or the applicant.

30 · In order to remove any difficulty in the interpretation or application or implementation of the provisions of these regulations, the Board shall have the power to issue clarifications and specify procedures through circulars or guidelines.

31 · No settlement order or rejection of a settlement application shall be 2 23 [invalidated on ground of any defect in procedure or determination of the settlement terms] or on account of any vacancy in or any defect in the constitution of any committee under Chapter V:

23 · Substituted for the words "void on ground of any defect in procedure or calculation of the settlement amount" by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022.

24 · Substituted for the words "calculation of the settlement amount" by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14-01-2022.

25 · [Explanation. – For the removal of doubts, it is clarified that the power to seek the difference under this regulation shall include and always be deemed to have included the profits gained or losses avoided out of the violations for which the specified proceedings also have been initiated.]

32 · Schedule -II of these regulations shall be relevant but not bind the Board or an Adjudicating Officer in any specified proceeding and the Board or the Adjudicating Officer may apply them to the extent possible.

33 · The provisions of Chapters IV to VI and Schedule-II may be applied mutatis mutandis for 26 [determining the terms while processing] a compounding application.

34 · (1) On and from the commencement of these regulations, Securities and Exchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations, 2014 shall stand repealed.

25 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022.

26 · Substituted for the words "arriving at a proposal pursuant to" by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14-01-2022.

27 · [(4) Notwithstanding the omission of Chapter VIII, a Settlement Notice issued under regulation 18, shall be dealt with as if the Chapter VIII is still force and continue to be dealt with accordingly.]

27 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020 .

28 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020.

29 · The words "by way of a demand draft in favour of 'Securities and Exchange Board of India' payable at Mumbai or" omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020 .

30 · Substituted for the words "direct credit in the bank account through NEFT/RTGS/IMPS or any other electronic mode allowed by RBI." by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020.

31 · Inserted by the Securities and Exchange Board of India (Attestation of Documents) (Amendment) Regulations, 2024 w.e.f. 28 -11 -2024.

32 · The words "and duly notarized at the time of execution" deleted by the Securities and Exchange Board of India (Attestation of Documents) (Amendment) Regulations, 2024 w.e.f. 28-11-2024.

33 · Substituted for the symbol ":" by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020.

34 · Omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022. Prior to its omission, the provision read as below:

35 · [11A. The applicant shall be provided opportunity of hearing or meeting only before the Internal Committee.]

35 · Inserted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020

36 · [***]

36 · Omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022. Prior to its omission, the provision read as below:

37 · [TABLE-I

37 · Substituted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022. Prior to its substitution, the table read as below:

38 · Substituted for the words "applied once for all or any of them" by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020.

39 · Substituted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020. Before substitution, the words read as under:

40 · [TABLE-VII

40 · Substituted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022. Prior to its substitution, the table read as below:

41 · [Table-VIII

41 · Substituted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14 -01 -2022. Prior to its substitution, the table read as below:

1 · In cases of disclosure related violations by connected persons or by key managerial persons, the BA may be increased by 25%.

2 · Table VIII is not applicable in cases where the disclosure related violation is in combination with FUTP or IT.

42 · Substituted for the words "FOREIGN INSTITUTIONAL INVESTORS" by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14-01-2022.

43 · [Table-X

43 · "Substituted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022, w.e.f. 14-01-2022. Prior to its substitution, the table read as below:

44 · [***]

44 · Omitted by the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2020 w.e.f. 22.07.2020. Before the omission, the words read as under: