Sebi panel suggests confidentiality clause in settlement mechanism

A high-level Sebi panel has prosed a confidentiality clause in the settlement mechanism, wherein identity of the applicant will not be disclosed, in order to garner information of defaults as well as possible violations from defaulters in the securities.

Currently, the settlement regulation does not have a provision for settlement with confidentiality and all settlement orders contain details of the applicant and are published on Sebi website.

"There is no explicit provisions for an applicant to voluntarily provide information to the (Sebi) board relating to the fraudulent and unfair trade practices and other serious defaults that would assist the board in dealing with any inquiry, investigation, inspection, and audit," the panel said in its report submitted to the regulator.

The panel headed by retired judge A R Dave has suggested for a provision for settlement with confidentiality under the settlement norm.

It has recommended that even the settlement order in cases of settlement with confidentiality will need to be published. However, the identity of the applicant may not be disclosed.

The settlement mechanism enables entities to settle charges against them without admission or denial of guilt on payment of fee.

The Securities and Exchange Board of India (Sebi) has sought comments from public till September 1 on the committee's suggestions and final regulation will be put in place after taking into views of the stakeholders.

It also suggested not settling the case with wilful defaulters and fugitive economic offenders under settlement norms.

Besides, it has recommended that