SEBI proposed changes to country’s consent settlement rules

Vastavam web: India’s capital markets regulator has proposed changes to the country’s consent settlement rules, according to a review panel report, as it tries to reduce recourse to the courts and make it easier to do business in Asia’s third largest economy. Under consent proceedings, parties involved in disputes with the Securities and Exchange Board of India (SEBI) can settle them without admission of guilt.

It is also a speedy alternate arrangement that ensures financial markets function uninterrupted without the delays typical of courtroom battles. The panel, headed by a former Supreme Court judge, recommended that companies should be barred from re-applying for resolution of the same dispute if their first application is rejected. The system could also be used in cases of alleged serious fraud – including insider trading, front-running and mis-statements in offer documents – depending on the merits of each case, the panel said.

The need for revisions arose because part of the existing regulations were seen as discouraging the “settlement of certain matters deemed to be too important”, and because there was no clear guidance for dealing with certain types of cases, the panel said.