Sebi's consent settlement proceeds rise 3-fold

Capital markets regulator Sebi has collected nearly Rs 2 crore as charges and fees for settlement of various probes under its 'consent' mechanism in the first four months of current fiscal.

This is over three times the amount garnered in the same period of the preceding fiscal, 2012-13.

An analysis of consent orders passed by Securities and Exchange Board of India (Sebi) shows that it collected Rs 1.92 crore by approving 16 consent applications between April and July of 2013.

In comparison, the market watchdog had garnered about Rs 61 lakh by settling 10 cases in the same period year-ago.

Sebi has also rejected 19 consent pleas for settlement of ongoing proceedings against the concerned entities under its 'consent mechanism' between April 5 and July 23, 2013.

The market regulator had introduced the consent mechanism in April 2007, with a view to cutting down on its costs, time and efforts in taking up the enforcement actions.

Under the mechanism, entities facing proceedings from Sebi, pay settlement charges, as also legal and administrative expenses, without admission or denial of guilt.

These norms were tightened in May 2012, pursuant to which certain defaults such as insider trading, front running, failure to make an open offer, redress investor grievances and respond to the summons issued by Sebi have been excluded from the consent process.

Further, the defaults falling under norms for fraudulent and unfair trade practices would also not be consented.

Sebi's powers with regard to consent settlement have been further strengthened through an ordinance promulgated by the government last month.