SEBI Settlement scheme 2020

SEBI Settlement scheme 2020

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Created By Admin Last Updated Wed, 30-Dec-2020

Securities Exchange Board of India (SEBI) issued a notice in respect of SEBI- Settlement scheme 2020 to provide one-time settle opportunity to the entities that have executed trade reversals in stock options the segment of BSE during the period from April 1, 2014, to September 30, 2015 against whom any proceedings are pending.

SEBI came across several instances wherein a set of entities were consistently making losses by their trading in options on individual stocks which are listed on the Bombay Stock Exchange and that’s the reason behind the settlement scheme, 2020.

Regulation 26 of SEBI regulations, 2018 empowers SEBI to specify settlement schemes as and when desirable for defaults conducted by entities. SEBI for the purpose of reducing the administrative burden of pending proceedings relating to trading in the illiquid stock option issued a public notice on 27th July 2020 for the introduction of the settlement scheme. Further information related to the scheme is discussed below:

Process of availing the settlement scheme:

1.    For availing the scheme, an individual can submit the documents in the SEBI portal by online mode. For this entity require a PAN card copy, Undertakings and waivers, income tax returns for 3 years.

2.    After submission of documents they have to process for fee payment which has been discussed by us above.

3.    The payment of settlement amount has to be deposited by the entity further which is determined on the basis of reversal trades executed by the company.

4.    The last step is the filing of the physical copy of the application in which settlement application, PAN card copy, undertakings, and waivers, income tax returns for last 3 years, proof of payment of processing fees, proof of payment of the settlement amount is required to attach by the entity.

Eligibility criteria for the scheme-

The entities who have executed trade reversals on the stock options segment of BSE during the period from April 1, 2014, to September 30, 2015 against whom any proceedings are pending are eligible to avail the one time settlement opportunity.

Validity of the scheme-

The scheme shall commence on August 1, 2020, and end on October 31, 2020.

Settlement application details of the scheme-

The entities need to submit a settlement application along with an application fee of Rs 15,000 in case of individuals and Rs 25,000 in case of a body corporate in the specified format, available on the SEBI website and also on the BSE website.

Mode of payment for the application fee-

Entities can submit fee via an online platform on the website of SEBI.