SEBI is nearing the completion of a Standard Operating Procedure (SoP) for managing settlement cases, with the aim of establishing a consistent approach and improving transparency in the process, according to whole-time member Kamlesh Chandra Varshney.
Speaking at a conference on the economics of competition law organised by the Competition Commission of India, Varshney revealed that the SoP is almost finalised and will provide a framework for handling various types of settlement cases. Additionally, SEBI is exploring the development of a formula for settlements.
SEBI has had significant success with settlement cases over the past 18 years, with Varshney noting that settlements often result in higher payments compared to litigation. He highlighted the shift in settlement trends, noting that while only 10% of enforcement orders were settled five years ago, the figure has now increased to 45%.
The regulator is aiming to streamline the settlement process to reduce discretion and ensure fair outcomes for all parties involved. Varshney emphasized the importance of settlements in alleviating the burden on regulatory bodies, pointing out that if settlement cases were to go to the Securities Appellate Tribunal instead, it would further strain the system.
To boost efficiency, SEBI has set a target of resolving 60 cases per month in the upcoming fiscal year, up from the current rate of 45 cases per month. The emphasis is on matching the inflow of cases with an equal outflow to maintain a steady pace of resolution.
Under the SEBI (Settlement Proceedings) Regulations, individuals and entities can resolve securities law violations by agreeing to pay a settlement amount and abide by any necessary remedial measures.
The growing number of settlement applications in recent years has underscored the need for a standardized approach to handling such cases. By introducing an SoP, SEBI aims to enhance market integrity, improve regulatory efficiency, and ensure that violations are addressed promptly and fairly.
