Sebi to issue settlement notice to firms under lens for delayed disclosures

To fast-track cases, markets regulator Sebi will issue settlement notice to entities undergoing probe against violations like delay in making shareholding disclosures and filing of returns and reports.

Also, among other violations is non-disclosure in relation to companies exclusively listed on regional stock exchanges which have exited, besides delay in compliance of any other Sebi norms.

"The board may issue a notice of settlement...calling upon the noticee (entity) to file a settlement application in respect of the specified proceeding(s) to be initiated, upon payment of the settlement amount and or furnishing an undertaking in respect of other non-monetary terms or compliance with other non-monetary terms," Sebi said in a notification dated December 27.

However, the Securities and Exchange Board of India (Sebi) said that these proceedings would not be settled in case the applicant failed to make a full and true disclosure of facts.

Explaining the procedure, the regulator said the entity will need to file a settlement application, in a specified form, along with non-refundable fee and further remit the settlement amount within 30 days from the date of receipt of the notice of settlement.

In case of any discrepancy in calculation of settlement amount specified in the settlement notice, the entity will have to seek rectification of the same at the time of filing the application and in such cases Sebi's decision will be final and remittance will need to be done within 30 days from the date of receipt of the decision of the regulator.

Further, Sebi, in some cases, may grant an extension of a further 15 days for the filing of a settlement application, remittance of the settlement amount and furnishing an undertaking in respect of any of the non-monetary terms.

If remittance of the settlement amount is not made or any of the non-monetary terms are not complied with, then Sebi may initiate proceedings against the entity.