CDSL Pays Rs 1.3 Crore To Settle SEBI Regulatory Violations
CDSL, when issued with a show case notice on Nov. 13, 2023, opted to settle the matter through SEBI's settlement mechanism without admitting or denying the findings.
Central Depository Services (India) Ltd. has agreed to pay Rs 1.3 crore to settle allegations brought forward by the Securities and Exchange Board of India about violations of the regulator's directives.
The allegations stem from SEBI's investigation into potential mismanagement and improper handling of debt securities by CDSL. Specific areas of concern included the company's procedures for managing debt securities, handling defaulted securities, and ensuring compliance with regulations post-maturity or redemption of these securities.
In response to these allegations, SEBI appointed a series of adjudicating officers, with the latest being Shashi Kumar Valsakumar, who was tasked with enquiring into the potential violations under the SEBI Act.
CDSL was issued a show cause notice on Nov. 13, 2023, requiring the company to explain why an inquiry should not be held and penalties should not be imposed.
However, during the pending adjudication process, CDSL opted to settle the matter through SEBI's settlement mechanism without admitting or denying the findings.
Following meetings with SEBI's Internal Committee and subsequent approval from the High Powered Advisory Committee, it was agreed that CDSL would pay a settlement amount of Rs 1.3 crore. This amount was confirmed as received by SEBI on Aug. 12, 2024, leading to the disposal of the adjudication proceedings.
The settlement order, effective immediately, resolves the current proceedings but leaves the door open for SEBI to take further action if it is found that CDSL has not made full disclosures or has violated any undertakings or waivers.
