Sebi to provide greater clarity to justify quantum of fines

To ensure greater transparency, market regulator Sebi has started providing additional clarity in its orders to justify the quantum of penalties imposed for defaults and other violations.

Sebi, which can levy penalties of up to Rs 25 crore or three times any ill-gotten gains (whichever is higher), has decided that its adjudicating officers would clearly mention the mitigating factors in their orders to justify the fines they impose for violation of norms, official sources said.

The decision was taken as part of efforts to streamline the interpretation of the monetary penalty provisions under securities laws. Besides, opinions given by the Attorney General on this issue were also taken into account.

Sebi's decision follows instances where the Securities Appellate Tribunal (SAT) had asked the regulator to justify the quantum of penalty imposed. There have been cases when SAT has set aside or modified the penalty imposed by Sebi and the move is helped at improving the chances of a penalty standing legal scrutiny.

Besides, it would help bring in greater transparency in the enforcement actions of the capital markets regulator.

The Securities and Exchange Board of India (Sebi) can impose penalties for failure to furnish information, fraudulent and unfair trade practices, and defaults.

In most cases, the penalty is Rs 1 lakh for each day of failure, subject to a maximum of Rs 1 crore. For insider trading, the fine can go up to Rs 25 crore.

EDITORIAL OF THE DAY

  • Public musn’t pay for domestic servants for our diplomats

    Nothing seems to have changed in the year and half since the fur that flew thick and fast over the case of diplomat Debjani Khobragade and her maid Sa

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

Economic integration in east Asia

As trade agreements within a global framework have become increasingly ...

Rajgopal Nidamboor

Up the ante of your conscious existence

It sounds cryptic, but is not as complex as it ...

Gautam Gupta

The ‘fake’ issue needs to be taken seriously

E-commerce players are witnessing unbelievable growth globally. Competition is increasing ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture