NSDL pays Rs 3.12 crore to settle allegations of non-compliance of SAT order

The depository applied to settle the matter without admitting or denying the findings.

The National Securities Depository Ltd (NSDL) has settled allegations of regulatory violations by paying Rs 3.12 crore.

The settlement order was issued by the Securities and Exchange Board of India (Sebi) on October 17, in the matter of the depository's non-compliance of an order issued by the Securities Appellate Tribunal (SAT).

The SAT order in question was dated October 12, 2022.

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In regard to this, Sebi started adjudication proceedings against NSDL for the following alleged violations:
a) Regulation 7(g) of SEBI (Depositories and Participants) Regulations, 2018
This section states: "the depository shall redress the grievances of the participants and the beneficial owners within thirty days of the date of receipt of any complaint from a participant or a beneficial owner and keep the Board informed about the number and the nature of redressals".

b) Regulation 17 read with Clause (1), (5) and (9) of Code of conduct as specified in Part D of the Third Schedule of (Depositories and Participants) Regulations, 2018 (till August 27, 2023).
These sections deal with the depository's responsibility in safeguarding the investors' interests, integrity of the depository system and the securities market; and with the responsibility of the depository with regard to the acts and omissions of its employees in the conduct of its business.

c) Regulation 17 read with Clause (a), (g) and (l) of Code of conduct as specified in Part D of the Third Schedule of (Depositories and Participants) Regulations, 2018 (From August 28, 2023 till November 03, 2023)

The depository applied for a settlement on March 12, 2024, and then filed a revised application on August 2, 2024.

The regulator's High Powered Advisory Committee (HPAC) in its meeting held on August 14, 2024, considered the settlement terms proposed and recommended that the case may be settled upon payment of Rs  3.12 crore.

The Panel of Whole Time Members of Sebi approved HPAC's recommendation on September 08, 2024, and this was communicated to the depository on September 20, 2024.

On October 14, NSDL informed the regulator that the settlement amount had been remitted.