The Securities and Exchange Board of India (SEBI) has issued a circular on June 18, 2019, prescribing factors which will be considered by the regulator for assuring confidentiality of a settlement proceeding under the SEBI (Settlement Proceedings) Regulations, 2018.
To avail the benefit of confidentiality, the violation should be other than disclosure related violations covered in Table VII to IX of Schedule II of the SEBI (Settlement Proceedings) Regulations, 2018. If a person has committed such a violation, and makes full disclosure, in addition to providing substantial assistance in examination proceedings may be eligible for confidentiality of settlement proceedings and reduced settlement charge.
SEBI will assess the information provided by the applicant during the examination proceedings prior to extending confidentiality based on the following factors:-
1)Assistance provided by the applicant
The timing of the assistance, the materiality and significance of the information provided, and if the assistance was offered proactively and the consequences to the person for offering such assistances are some of the factors considered by SEBI
2)Gravity of the subject matter:-
- The nature and type of defaults under the securities laws;
- The age and repetitive nature of defaults.
- The adverse effect upon investors due to the defaults involved.
3) Factors which may adversely affect the applicant’s claim for confidentiality:-
The Past history of securities laws violations by the applicant, repetition of the violation, the extent of involvement or knowledge in committing the violation, extent to which the person played in role in prevention or delaying the detection of the reported violation and the efforts undertaken to remediate/mitigate/indemnify the harm caused by the violations will be considered by SEBI.
Click here to download the Circular.
