Sebi gets back discretionary powers on penalties

Relief for companies as regulator can now reduce fines, a power Supreme Court took away in 2015

Ashley Coutinho  |  Mumbai 

The Finance Bill 2017 has inserted an explanation that does away with the ambiguity regarding the discretionary powers of the Securities and Exchange Board of India (Sebi) in deciding the quantum of penalty levied against companies. This will provide relief to several companies reeling under heavy penalties post the Supreme Court’s Roofit judgment in 2015. The SC had, in its ruling in the matter of Roofit Industries in November 2015, said that Sebi had no discretionary power under Section 15J of the SEBI Act, 1992 to reduce penalties imposed on companies. Following the ...

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Sebi gets back discretionary powers on penalties

Relief for companies as regulator can now reduce fines, a power Supreme Court took away in 2015

In a development that could provide relief to several companies reeling under heavy penalties post the Supreme Court's Roofit judgment in 2015, the Finance Bill 2017 has inserted an explanation that does away with the ambiguity regarding the discretionary powers of the Securities and Exchange Board of India (Sebi) in deciding the quantum of penalty against companies. The Supreme Court had in its ruling in the matter of Roofit Industries in November 2015 said that Sebi had no discretionary powers under Section 15J of the SEBI Act, 1992 to reduce penalties imposed on companies. Following the judgment, penalty of crores of rupees was levied by Sebi in different matters. This led to Securities Appellate Tribunal (SAT) remanding several matters back to Sebi and quite a few appeals being withdrawn by the appellants fearing higher penalties. The Bill has clarified that the "power of an adjudicating officer to adjudge the quantum of penalty under sections 15A to 15E, clauses (b) and (c) of ... The Finance Bill 2017 has inserted an explanation that does away with the ambiguity regarding the discretionary powers of the Securities and Exchange Board of India (Sebi) in deciding the quantum of penalty levied against companies. This will provide relief to several companies reeling under heavy penalties post the Supreme Court’s Roofit judgment in 2015. The SC had, in its ruling in the matter of Roofit Industries in November 2015, said that Sebi had no discretionary power under Section 15J of the SEBI Act, 1992 to reduce penalties imposed on companies. Following the ... image
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