SEBI Proposes 'Summary Proceedings' To Expedite Handling Of Securities Violations

The Securities and Exchange Board of India has put forth a proposal to introduce 'summary proceedings' in the Intermediaries Rules aimed at addressing violations of securities laws by intermediaries more efficiently.

The move is part of SEBI's efforts to streamline regulatory processes and ensure swift enforcement actions.

SEBI has issued a consultation paper seeking public feedback until Aug. 6 on the proposed amendments to the Intermediaries Rules, 2008.

The consultation paper outlines the reintroduction of summary proceedings, a mechanism previously included in the SEBI (Procedure of Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, but repealed in 2008 with the introduction of the Intermediaries Regulations.

The proposed summary proceedings aim to expedite cases where violations are straightforward and require minimal evidence for substantiation.

Such violations include non-payment of fees resulting in expired registrations and failure to submit periodic reports promptly.

SEBI highlighted that the current procedures for handling these violations under Chapter V of the Intermediaries Regulations are often lengthy and cumbersome.

According to the consultation paper:

• Summary proceedings will be applicable in cases such as expulsion by stock exchanges, termination of depository agreements, false claims about returns, and non-compliance with fee payments or periodic reporting.

• Intermediaries will have 21 days to respond in writing to notices issued by SEBI.

• SEBI aims to decide on actions within 21 days of receiving a response or after the response period expires, which may include suspension or cancellation of registration.

• Orders issued will be communicated to the intermediary directly, published on SEBI's website, and shared with relevant stakeholders for dissemination.

By implementing summary proceedings, SEBI intends to reduce procedural complexities and ensure timely enforcement actions, thereby strengthening investor protection and market integrity.

(With inputs from PTI)