Regulation 5 - Scope of settlement proceedings - Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018

CHAPTER III SCOPE OF SETTLEMENT Scope of settlement proceedings. 5. (1) No application for settlement of any specified proceedings shall be considered, if: (a) an earlier application with regard to the same alleged default had been rejected; (b) the audit or investigation or inspection or inquiry, if any, in respect of any cause of action, is not complete, except in case of applications involving confidentiality; or (c) monies due under an order issued under securities laws are liable for recovery under securities laws. (2) The Board may not settle any specified proceeding, if it is of the opinion that the alleged default, - i. has market wide impact, 1 [ or ] ii. caused losses to a large number of investors, or iii. affected the integrity of the market. (3) Without prejudice to the generality of the foregoing provisions, for settling any specified proceeding the Board may inter alia take into account the following factors, - (a) whether the applicant has refunded or disgorged the monies due, to the satisfaction of the Board; (b) whether the applicant has provided an exit or purchase option to investors in compliance with securities laws, to the satisfaction of the Board; (c) whether the applicant is in compliance with securities laws or any order or direction passed under securities laws, to the satisfaction of the Board; (d) any other factor as may be deemed appropriate by the Board. (4) Without prejudice to sub-regulations (1) and (3), the Board may not settle the specified proceedings where the applicant is a wilful defaulter, a fugitive economic offender or has defaulted in payment of any fees due or penalty imposed under securities laws. (5) Nothing contained in these regulations shall be construed to restrict the right of the Panel of Whole Time Members to consider or reject any application in respect of any specified proceeding without examination by the Internal Committee or the High Powered Advisory Committee. ************* NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022