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Markets regulator SEBI, has decided to ease its settlement and compounding norms as to make sure that the cases are closed faster where accused entities are ready to settle and pay the amount of losses faced by investors. It provides settlement for cases which are initiated or are yet to be initiated. However, there has been a drop in the number of settlements as certain provisions were making it difficult for application to be considered for settlement. The compounding process was time-consuming due to various procedural delays under the existing rules and they have also been eased now. The simplified set of norms would now allow entities under probe for ‘serious violations’ in capital markets to seek settlement of the case, provided they agree to make good the losses suffered by the investors to Sebi’s satisfaction. This would also apply for defaults with “market-wide impact” or involving significant losses to investors. Sebi would also examine the “qualitative and quantitative impact on rights of investors, including the number of complaints received, especially from retail investors and small shareholders”. In cases where violation is found to be “serious” and also involves market-wide impact or substantial losses to investors, a settlement application can be considered only if the applicant “has made or intends to make good the losses due to the investors to the satisfaction of Sebi”.



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