New Settlement Rules of SEBI

Ministry of Finance
New Settlement Rules of SEBI

21 DEC 2018

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these Regulations the existing SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2014 shall stand repealed.

In pursuit of the objectives of SEBI (to protect 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 bring forth a more effective harmonized scheme to operate without any conflict and delay. The SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2014 introduced a mathematical and transparent system of calculating the settlement amount. However over a 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.

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 more effective mechanism, the essential concomitants of a legal proceeding, without compromising on deterrence or providing equitable remedies to the affected investors.

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 finalized 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:-

• Disclosure related violations are settled after making the required disclosures;
• Refund to investors is made wherever required in compliance with securities laws;
• Investors are provided the required exit or purchase option in compliance with securities laws;

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

This was stated by Shri Pon. Radhakrishnan, Minister of State for Finance in a written reply to a question in Lok Sabha today.

PIB

Government asks Central Public Sector Enterprises to comply with woman director norms

Government asks Central Public Sector Enterprises to comply with woman director norms

New Delhi: Central public sector enterprises (CPSEs) have been asked to appoint independent women directors on their boards to comply with norms, government told the Lok Sabha today.

The remarks by Minister for Heavy Industries and Public Enterprises Anant Geete came against the backdrop of many listed CPSEs failing to meet capital market regulator Sebi’s deadline for appointing at least one woman director on their boards.

Geete said his Ministry has asked all CPSEs to ensure appointment of non-governmental (or independent) women directors on their boards.

“The process for filling up the vacancies in these CPSEs has been initiated,” Geete said and assured that public sector undertaking would have required number of independent directors in the coming days.
He said appointment of all independent directors on the boards of CPSEs have been done on the basis of “merit”.

Companies should have complied with the norms, he said, adding special attention would be given to such matters in the future.

He was responding to a query that CPSEs were struggling to appoint women directors.

Securities and Exchange Board of India (Sebi) had given a deadline till March 31 for listed companies to appoint at least one woman director on their boards but many entities, including CPSEs, failed to comply with the norms.

Under Companies Act, 2013, also firms are required to have women directors on their boards.
He said individuals having financial links with a public sector firm are not appointed on the board of that entity.

Meanwhile, 18 CPSEs, including Bharat Heavy Electricals Ltd and Cement Corporation of India, do not have requisite number of independent directors on their boards. These are entities that come under the administrative control of the Department of Heavy Industry.

While replying to a question related to NALCO, the Minister said that public sector companies are like family jewels and need to be preserved.

Responding to another query on loss-making CPSEs, Geete acknowledged that many such firms are sick and that ways are being looked on how long can they be supported by the government.

PTI