Lok Sabha Question No. 1905 (UNSTARRED), answered on 2018-12-21
Subject: New Settlement Rules of SEBI
Ministry: FINANCE
Asked by: SAUGATA ROY

## GOVERNMENT OF NNDA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO: 1905 TO BE ANSWERED ON FRIDAY, DECEMBER, 2018/ AGRAHAYANA 30, 1940 (SAKA) 21ST

## NEW SETTLEMENT RULES OF SEBI

## 1905. PROF. SAUGATA ROY:

## QUESTION

Will the Minister of Finance be pleased to state:

- (a): whether the Securities ad Exchange Board of India   (SEBI) has   introduced an alternative new settlement rules;
- (c): whether the new rules are likely to help the investors to make their transactions more transparent; and

## ANSWER

## (SHRI PON. RADHAKRISHNAN)

(a): SEBI has   introduced the SEBI (Settlement   Proceedings) Regulations, 2018 that   have been   notified on 30.11.2018 and will come into effect from 01.01.2019. On the date of commencement of these Regulations the existing SEBF (Settlement of Administrative and Civil Proceedings) Regulations, 2014 shall stand repealed

- (b): In pursuit of the objectives of SEBI (to the interests of investors in  securities and to promote the development of and to regulate the securities market)as new challenges arise it is important to have a convergence or integration of the quasi-judicial processes within SEBI with the alternate dispute resolution process; to forth a more effective harmonized scheme to  operate without The SEBI  (Settlement  of Administrative ad Civil  Proceedings) Regulations, 2014 introduced a mathematical and transparent  system of calculating the settlement amount: However over & period of time it was noticed that: there was a need for revision due to changes in securities laws, new products and increase in settlement amounts. protect bring delay.

SEBI constituted a High Level Committee under the Chairmanship of Retd. Justice A. R Dave (Supreme Court of India) to   examine the SEBI   (Settlement of Administrative and Civil   Proceedings)   Regulations, 2014 and comprehensively re-work the   regulations after   taking into account   developments in domestic and foreign jurisdictions   The SEBI (Settlement Proceedings) Regulations, 2018 provide a essential concomitants of & legal proceeding, without compromising on deterrence or providing equitable remedies to the affected investors.

- (c) (d): The Settlement process is an alternative enforcement process that is beneficial to the alleged defaulter; investors and the regulator. Settlement allows the enforcement proceedings to be fitalized at the earliest without a long drawn litigation while ensuring that the investors rights are protected  The SEBI (Settlement Proceedings) Regulations, 2018 inter alia provide the following;
- a Disclosure related violations are settled after making the required disclosures;
- b. Refund to investors is made wherever required in compliance with securities laws;
- C. Investors are provided the required exit or purchase in compliance with securities laws; option

Thus the SEBI (Settlement Proceedings) Regulations, 2018 are likely to make all settlements transactions relating to investors more transparent:

- (b): if so, the details thereof and the objectives ofnew settlement rules;
- (d): if s0, the details thereof?