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Sep 15, 2017 07:04 PM IST | Source: PTI

Sebi to streamline internal mechanism for enforcement actions

The proposal assumes significance against the backdrop of various high profile cases, including those related to the NSE and PwC, were settlement are being sought

Sebi to streamline internal mechanism for enforcement actions

To reduce the high pendency of cases, Sebi plans to expedite settlement proceedings and streamline its internal mechanism to better decide whether they need soft or hard enforcement actions, a senior official said. To select cases for enforcement actions, the markets regulator will soon put in place internal guidelines, which would also be made applicable for pending cases.

The proposal assumes significance against the backdrop of various high profile cases, including those related to the NSE and PwC, were settlement are being sought. The regulatory official said the plan to prepare the internal guidelines on selection of cases for enforcement actions would be discussed during Sebi's board meeting on September 18.

It would be optimum for Sebi to select only those cases which would send strong signal against market misbehaviour rather than pursue even "technical and venial breach of laws", the official said. According to the official, having internal guidelines for selecting cases for enforcement action would help optimise utilisation of regulatory resources as well as minimise litigation costs.

Noting that quality enforcement has more deterrent value than quantity of such proceedings, the official said internal guidelines would help in "selecting appropriate cases for soft or hard enforcement action in a uniform way". The soft actions being considered include issuance of administrative warning and caution letters.

Besides, the regulator is looking to have expedited settlement process for late filings and delayed compliance, among others. As it cracks the whip on various securities laws violations, the regulator is also faced with rising number of pending cases. Currently, around 380 appeals against Sebi's rulings are pending before the Securities Appellate Tribunal while the number of appeals before the Supreme Court is over 250, the official said. As on March 31 this year, a total of 3,156 hard enforcement actions were pending, including 1,265 prosecution proceedings.
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