Sebi To Introduce Settlement Scheme For Stock Brokers The settlement scheme shall commence on December 19, 2022, and end on January 19, 2023, (both days inclusive) or such other date as approved by the competent authority
By Teena Jose •
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The capital markets regulator, Securities and Exchange Board of India (SEBI), will introduce a settlement scheme for stock brokers' against whom the enforcement proceedings have been initiated and are pending for executing trade in illiquid stock options in BSE, as per reports.
According to a Sebi notice, it is stated that the settlement scheme shall commence on December 19, 2022, and end on January 19, 2023, (both days inclusive) or such other date as approved by the competent authority.
The notice, released on Friday, added that, "SEBI has decided to introduce a Settlement Scheme for 150 stock brokers, 2022 (Scheme 2022) for Stock Brokers against whom enforcement proceedings have been approved/initiated and are pending for executing trades in illiquid stock options at BSE. Such entities may avail the Scheme 2022 as per its terms and conditions."
As per reports, the scheme provides an opportunity for the entities who have executed reversal trades in the illiquid stock options segment from April 1, 2014, to September 30, 2015, and against whom enforcement action initiated by Sebi is pending to settle the case.
The present scheme has been made easier as the entities can apply online instead of submitting the physical papers. The scheme was also made attractive so that many entities could avail the same. Majority of the entities can settle their proceedings by paying only INR 1 lakh as a settlement amount.
According to the earlier reports available, Sebi had observed that over 14,000 entities had indulged in reversal trades in options that were illiquid. Its investigation had found that entities entered into reversal trades with each other on the same day at different prices, thereby shifting gains from one to the other. A reversal trade is where a person buys a particular stock and sells it back to the same person. The reports had further asserted that Sebi ruled these trades as non-genuine and a misuse of the stock exchange platform. It initiated adjudication proceedings against these entities.
