Attached below is the press release:
Streamlining
of the consent process
SEBI had issued Circular
No.EFD/ED/Cir.-01/2007 dated 20th April 2007, providing the
framework for passing of consent orders and for considering requests for
composition of offences. On the basis of
the experience gained and with the purpose of providing more clarity on its
scope and applicability, the circular has been modified.
The salient features of the modified circular
are as under:
1. Certain
defaults including insider trading, front running, failure to make an open
offer, redress investor grievances and respond to the summons issued by SEBI
are excluded from the consent process. The defaults falling in the category of
fraudulent and unfair trade practices, which in the opinion of SEBI are very
serious and/or have caused substantial losses to the investors, shall also not
be consented.
2. No
consent application shall be considered, if any violation is committed within a
period of two years from the date of any consent order. However, if the
applicant has already obtained more than two consent orders, no consent
application shall be considered for a period of three years from the date of
the last order.
3. No
consent application shall be entertained by SEBI before the completion of investigation
/ inspection, if any.
4. In
respect of proceedings pending before the SEBI, no consent application shall be
considered if filed after 60 days from the date of the service of the show
cause notice.
5. The consent terms shall be determined in terms of the
guidelines (annexed with the above
referred circular), which inter alia, provide for the following objective
parameters for determining the consent terms:
a)
A minimum Benchmark Amount for each category
of default attributable to the default/violation for which the show cause
notice is issued or may be issued.
b)
The Benchmark Amount to take into
consideration the penalty imposed by the AO and the order passed by the WTM as
the case may be.
c)
Additional amounts for previous
defaults/track record of the applicant.
d)
Weightage given to the stage of the
proceeding, nature of the default/violation, gravity of the default/violation,
volume traded, price impact, networth, profits made, nature of disclosure not
made, its impact, etc.
6. The consent terms may also include other
directives viz. disgorgement of ill-gotten profits, etc if considered
necessary.
7. The HPAC/ Panel of WTMs considering the
facts and circumstances of the case and the gravity of the charges, may-
(i)
enhance the settlement amount in serious
cases as per the scheme of the SEBI Act, or
(ii)
reduce the settlement amount if the
settlement amount is disproportionately higher considering the nature of
violation, or
(iii)
refuse to consider the case under the consent
process.
8. The HPAC shall consist of a Chairman who
shall be a retired judge of a High Court and three other external experts.
9. Internal Committee/s, shall comprise of a
Chief General Manager not administratively associated with the case and
Division Chiefs of the concerned Operational Department and Enforcement
Department respectively to assist the HPAC.
10. In case of rejection of the consent
application, no subsequent application with respect to the same default shall
be considered by SEBI at any stage thereafter.
11. SEBI shall dispose of the consent
application expeditiously preferably within a period of six months from the
date of registration of the consent application.
The
Circular is available on the website: www.sebi.gov.in
Mumbai
May
25, 2012
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