Section 34, SEBI (Settlement Proceedings)…

(1) On and from the commencement of these regulations, Securities and Exchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations, 2014 shall stand repealed.

(2) Notwithstanding any such repeal:

(a) Notice of settlement issued under the Securities and Exchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations, 2014 shall be deemed to have been filed in accordance with these regulations and shall be dealt with in accordance with the provisions of these regulations;

(b) All applications filed under the Securities and Exchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations, 2014 and pending with the Board shall be deemed to have been filed in accordance with these regulations and shall be dealt with in accordance with the provisions of these regulations;

(c) All settlement orders passed under the Securities and Exchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations, 2014 shall be deemed to have been passed under these regulations;

(d) The Internal Committee(s) and the High Powered Advisory Committee constituted by the Board in accordance with the Securities and Exchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations, 2014, shall be deemed to have been constituted under these regulations;

(e) The proposals of the Internal Committees and the recommendations of the High Powered Advisory Committee in accordance with the Securities and Exchange Board of India (Settlement of Administrative and Civil Proceedings) Regulations, 2014 and any action taken by the Board on the basis of these recommendations shall be deemed to have been made under these regulations.

(3) Notwithstanding anything contained in Chapters VI to Chapter VIII, with respect to specified proceedings pending as on the date of commencement of this Chapter, the Board may issue a notice of summary settlement or settlement under Chapter VII or Chapter VIII, as the case may be, in respect of such proceedings and in such cases the procedure specified in Chapter VII or Chapter VIII shall apply mutatis mutandis, as the case may be:

Explanation. -For the purposes of this sub-regulation, it is clarified that a specified proceeding is not deemed to be initiated and pending, unless the Board has communicated the matter to the authority who shall conduct such proceedings.

SCHEDULE-I (See regulation 3) Part-A FORM Application for settlement (To be filed only after conclusion of investigation, inspection, inquiry or audit, as the case may be) (For Office use only) Date of receipt of the application:

Application Registration Number:

(Instructions: All particulars, including submission regarding details of loss caused to investors, profit made and proposed settlement amount must be filled, else application shall be returned. Put ‘NA’ only where NOT APPLICABLE.)

Before the Securities and Exchange Board of India In the matter of …………………………..

1. Name/Trade name of the applicant/co-applicants:

(a) Registration no., if applicable :

(b) Date of Registration, if applicable :

(d) Paid-up capital of applicant:

2. If stock broker, name of the stock exchange:

3. If sub-broker/authorised person, name of stock broker with whom affiliated and name of the stock exchange:

4. Name of the segment (Cash/derivative etc.):

5. Form of organization: corporate body/ sole proprietorship / partnership / LLP/ financial institution (if listed co., details of listing):

6. Names of promoters/directors/proprietors/partners:

7. Key management personnel(s):

8. Address/correspondence address, contact no./fax no. and email (any changes in aforesaid details shall be communicated to the Board promptly):

9. Name and contact details (including e-mail) of the contact person (s):

10. Other registration(s) with the Board, if applicable:

(a) Trade name :

(b) Registration type :

11. Case(s) pending with the Board/SAT/Court (Pl. specify):

12. Case(s) pending under 11B/Adjudication/Enquiry/others (pl. specify):

13. Stage at which pending:

14. Interim order(s) in the pending proceedings (gist of the orders passed), if any:

15. Other actions pending with/concluded by the Board, if any (with their details):

(a) Against the applicant :

(b) Against its associates :

(d) Against its other promoters/directors:

(e) Other details, if any:

16. Date of show cause notice/summons/communication indicating probable cause of action, if any, against which the settlement is sought (PLEASE ENCLOSE COPIES)*:

17. Full and true disclosure of facts (including the loss caused, profit made, loss avoided, gross fees, brokerage, commissions, etc., in respect of the cause of action, with manner of calculation thereof):

[APPLICANT TO TAKE INTO ACCOUNT THE GUIDELINES PROVIDED IN

SCHEDULE-II]

18. Specific charges alleged:

19. Submissions in respect of sub-regulations (2), (3) & (4) of Regulation 5:

20. Terms of settlement proposed by the Applicant:-

(a) Monetary terms, with manner of calculation:-

(b) Non-monetary terms, including manner of calculation of terms of disgorgement due:-

21. Original documents to be enclosed:

(a) Undertakings and waivers (as per Format specified in Part C).

(b) Authority letter/Board resolution.

22. List of other enclosures:

(a) A copy of the notice to show cause/summons/communication/other notices indicating the probable cause of action, if any, against which the settlement is sought;

(b) Complete Annual Reports / other relevant financial details for the last three financial years and the quarterly audited financial results of the current year;

(c) A statement showing net worth of the applicant (only for those applicants who are required to comply with the networth requirements as specified by the Board or by the stock exchanges), gross annual income before tax, the amount of gross profit made/loss avoided, including the gross brokerage, fees, management/performance/transaction fee, carried interest, compensation, etc., in respect of the said default;

(d) Copy of PAN card/ DIN/CIN details;

(e) Complete Income-tax Returns of the applicant for the last three financial years;

(f) In case of a foreign body corporate applicant, include details relating to incorporation, place of business, registration details with any non-Indian financial sector regulatory authority.

(g) In case of a non-resident applicant, include details relating to passport and national identity document, if any.

(h) Any other relevant document (s)/submissions.

(Signature of the applicant) (Stamp and Seal of body corporate applicant) Verification I, ………………………………………………son/daughter/wife of (Name in block letters) Shri …………………………………..being the applicant/authorised representative (in case of body corporate) of ……………………. do hereby verify and affirm on oath that this application and the contents thereof are true to my knowledge and belief and as per the records 27 and that I have not suppressed any material facts and shall keep the Board informed without delay, of any other relevant information that may come to my notice.

(Signature of the applicant) Date:

Place :

Part-B Every applicant under Chapter II of these regulations shall pay a non-refundable processing fee of fifteen thousand rupees, by way of a demand draft in favour of 'Securities and Exchange Board of India' payable at Mumbai or by way of direct credit in the bank account through NEFT/RTGS/IMPS or any other mode allowed by RBI.

Provided that, where the applicant is a body corporate, the non-refundable processing fee shall be Twenty-five thousand rupees.

Part-C Undertakings and Waivers Format Undertaking to be submitted by each applicant, along with the application with stamp duty duly paid and duly notarized at the time of execution.

I/We, …………………, the applicant(s) herein, as a condition for making the enclosed application to the Board for examining and consideration of the application, hereby declare that I/we agree and undertake that:

(1) I/We admit the jurisdiction and right of the Securities and Exchange Board of India to initiate appropriate proceedings in respect of the alleged default.

(2) I/We further agree and undertake that the time spent during the settlement proceedings shall be excluded for computing the limitation period or laches, if any, for initiating or continuing or restoring any legal proceedings, if any, against me/us, and waive any objections in this regard.

(3) The Securities and Exchange Board of India may enforce any claims against me/us arising from or/in relation to any violation of the settlement order passed pursuant to this application.

(4) Nothing in the settlement order shall preclude any other person from pursuing any other legal remedy to which such person may be entitled against me/us as per law.

(5) The settlement proposed by me/us does not limit or create any private rights or remedies for any person who is not a party to these proceedings, against me/us.

(6) The settlement amount including legal costs, if any, shall be paid by me/us to the Board within the period stipulated by the Board.

(7) The settlement order shall be construed and enforced in accordance with the Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018, as amended from time to time.

(8) I/We agree that subsequent to the passing of the settlement order, I/We shall not take any action or make or permit to be made any public statement denying, directly or indirectly, any finding of the Board including that recorded in the settlement order or creating impression that the settlement order is without factual basis.

(9) I/We hereby declare that nothing in the waiver and undertaking given by me/us shall affect my/our (i) testimonial obligations, or (ii) right to take legal or factual positions in defence of litigation or in defense of a claim or in any other legal proceeding in which the Board is not a party.

(10) I/We for the limited purpose of settlement under these regulations ‘admit the findings of fact and conclusions of law’ or ‘neither admit nor deny the findings of fact and conclusions of law’ (strike off whichever is not applicable), and agree to abide by the settlement order as may be passed in accordance with the Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018 and guidelines and circulars issued by the Board in that regard:

Provided that, in relation to defaults related to disclosures other than relating to a prospectus or a letter of offer or a similar such document required to be made in relation to an issue of securities, I/we do not deny the alleged default.

(11) I/We waive my/our right of taking any legal proceedings against the Securities and Exchange Board of India concerning any of the issue covered in the settlement order that may be passed.

(12) I/We further waive the following:

(a) the findings of fact and conclusions of law;

(b) the proceedings before the Board or any officer of the Board;

(d) appeal/review before the Tribunal/courts;

(e) any plea relating to such provisions of the regulations or other requirements of law, including conflict of interest, as may be construed to prevent any member or officer of the Securities and Exchange Board of India from participating in the proceedings, including settlement proceedings or assisting or advising the Internal Committee, High Powered Advisory Committee or Panel of Whole Time Members, as to, any order, opinion, finding of fact, or conclusion of law, etc.;

(f) any plea of bias or pre-judgment by the Securities and Exchange Board of India, the officers or the High Powered Advisory Committee, based on the consideration of or discussions concerning settlement of all or any part of the internal proceedings; and

(g) any plea of limitation or laches for initiating or restoring of the proceedings, if the applicant violates the settlement order.

(13) I/We undertake as a condition of settlement to not seek, directly or indirectly, any set-off, reimbursement by way of indemnification, insurance coverage or any other form of non-tax reimbursement.

(Signature of the applicant with stamp and seal of the body corporate) Before me.

Notary.

SCHEDULE-II (See regulation 10)

CHAPTER I GUIDELINES FOR ARRIVING AT SETTLEMENT TERMS

1. The settlement amount (SA) shall comprise of the Indicative Amount (IA) arrived at in terms of these guidelines and the factors provided in regulation 10, wherever applicable.

2. The IA shall not be less than Rupees 3 lakh for first time applicants or Rupees 7 lakh for others, as the case may be:

Provided that in case of individual applicants who submit to the satisfaction of the IC or HPAC or Panel of WTMs that, without knowledge of the illegal activity, they had lent the use of their securities account to the key operator or intermediary or securities market infrastructure institution involved in such activity, the SA may not exceed the minimum penalty for that violation under securities laws.

Explanation.-A ‘first time applicant’ is a person against whom no order has been passed by the adjudicating officer or by the Board or who has never obtained a settlement order from the Board as on the date of the present application.

3. Based on the stage at which the proceeding(s), for which the application is made, is/are pending, the proceeding conversion factor (PCF) shall be applied when calculating the IA.

4. In cases, where an existing business or activity of a person is either corporatized or converted into an LLP or partnership or merged or taken over by a new management, the existing record of the erstwhile entity shall be deemed to be the record of the new entity. Considerations including insolvency, change of name or management or ownership, etc., shall be considered in accordance with the guidelines issued by the Board, if any, from time to time.

5. PCF for Applications made voluntary or seeking settlement with confidentiality: Where an entity desires to obtain the benefit of a lower PCF, it may, suo motto, before the receipt of any notice to show cause, intimate the Board of such default hereinafter referred to as ‘intimation defaults’ and co-operate with the Board in the investigation, inquiry, inspection or audit. Such an application shall be deemed to have been made ‘Pre- issue of notice to show cause’ for the purpose of calculating the PCF.

6. The IA shall be calculated per count of default, jointly or separately as per the facts and circumstances of the case, in accordance with these guidelines.

7. While considering the application, the alleged default(s) detailed in the Inspection Report or the Investigation Report or the Report of the Designated Authority (DA) or the notice to show cause, including any supplementary notice to show cause issued by any authority in a pending proceeding, or the facts/findings detailed in the order of the Designated Member (DM) or the Whole Time Member (WTM) or the Adjudicating Officer (AO) or the Securities Appellate Tribunal (SAT), as applicable, may be the basis for calculating the IA.

In case, the Internal Committee (IC) or the High Powered Advisory Committee (HPAC) or the Panel of Whole Time Members (WTMs) are of the opinion that the facts disclose a different default, the modification of the charge(s) may be sought.

8. The alleged defaults shall, wherever applicable, be categorised based on the facts and circumstances by the IC or HPAC or the Panel of WTMs.

9. Notwithstanding anything contained in these guidelines, the IC or HPAC or Panel of WTMs shall have the discretion to recommend acceptance or rejection or accept or reject an application, to recommend an amount, lower or higher than the amounts arrived at in terms of these guidelines, for reasons to be recorded, in accordance with the provisions of securities laws, considering the facts and circumstances of the case and the gravity of the charges.

10. In case the applicant is body corporate, the IC or HPAC or Panel of WTMs may require that the SA payable by a body corporate is to be paid by the officers in default including 32 the persons in charge of the body corporate to avoid burdening investors holding securities issued by the body corporate:

Explanation. – The principle in clause 10 may be applied mutatis mutandis to the sponsor, manager, or trustee (by whatever name called) of a trust, the karta of a Hindu Undivided Family, the office bearers of an association of persons, as the case may be.

11. In cases where the formulae for calculating the IA are inapplicable or cannot be adapted due to the peculiar nature of the default or the facts and circumstances of the case or where the defaults detailed in the Tables in these guidelines are not covered, the IC or HPAC or Panel of WTMs may arrive at the SA, as they deem fit.

12. In case of an amendment(s) or repeal of the securities laws, these guidelines shall continue to apply to similar provisions under the amended or new laws, mutatis mutandis.

Chapter II INDICATIVE AMOUNT AND THE SETTLEMENT AMOUNT Indicative amount (IA) shall be calculated as follows:

#Legal costs of the Board may be applicable to an application made at the stages mentioned in points “b”, “d” and “e” as provided in Table I.

Where:

‘A’ = PCF + RAF A: Multiplying Factor.

PCF: Proceeding Conversion Factor.

RAF: Regulatory Action Factor.

IA= A X B + Legal Costs# 33 ‘B’ = BV x BA B: Applicable Benchmark Amount, is the amount attributable to every count of the alleged default in accordance with these guidelines;

‘BV’: Aggregate of the base values given to the relevant factors including the aggravating and mitigating factors in respect of a particular charge.

‘BA’: Base amount attributable to every count of the alleged default in accordance with these guidelines.

1. The IA shall not exceed the maximum penalty under securities laws that may be levied for each count of violation multiplied by the counts of alleged default in accordance with these guidelines.

2. (a) Where an order of penalty has been passed prior to making an application, then ‘B’ shall not be less than the penalty so awarded;

(b) In case more than one proceeding arising from the same cause of action has been initiated against the applicant, the IA shall be increased by 20%;

3. In case of grant of confidentiality, the IA arrived in accordance with this Schedule shall, be further reduced as follows, - i. those marked first in priority status may be granted reduction of up to or equal to ninety percent of the IA;

ii. those marked second in priority status may be granted reduction of upto or equal to fifty percent of the IA; and iii. those marked third or subsequent in the priority status may be granted reduction upto or equal to twenty five percent of the IA.

4. The amount which is finally approved by the Panel of Whole Time Members is the SA.

5. Notwithstanding anything in this Schedule, - i. where a compounding application has been filed in respect of an offence under securities laws for non-payment of penalty, the proposal agreeing to the composition of the offence may be made to the court in lieu of such penalty and 34 interest as deemed appropriate along with legal charges as determined by the Board;

ii. where a compounding application has been filed in respect of an offence under securities laws other than for non-payment of penalty, the proposal agreeing to the composition of the offence may be made to the court in lieu of terms as may be approved by the Panel of Whole Time Members; and iii. where a compounding application is filed after framing of the charges by the court, the proposal agreeing to the composition may be made after increasing the amount calculated under this Schedule by atleast twenty-five per-cent along with legal charges and along with any other terms as may be approved by the Panel of Whole Time Members.

CHAPTER III PROCEEDING CONVERSION FACTOR The values assigned on the basis of the stage of the proceedings, as on the date of the application, shall be the PCF as per Table I:

Provided that where multiple proceedings arising out of the same cause of action are sought to be settled, the value of the proceeding which is at the most advanced stage, irrespective of the stage of progress of the other proceedings, shall be taken as the PCF.

TABLE- I PCF STAGE OF THE PROCEEDING(S) WHEN THE SETTLEMENT APPLICATION IS MADE VALUE OF PCF a. Voluntary or for seeking settlement with confidentiality 0.65 35

CHAPTER IV REGULATORY ACTION FACTOR -VALUE FOR ALL ORDERS AND REGULATORY DIRECTIONS The sum of all the values assigned to the order and regulatory direction(s) issued in the past, if any, shall be ‘RAF’.

‘RAF’= X + Y b. Pre- issue of the notice to show cause (including applications filed on receipt of the settlement notice/summary settlement notice) [Or Compounding application filed pre-summoning]

0.75 c. Post-issue of the first notice to show cause pertaining to any pending proceeding in the same cause of action (including applications filed after period provided in settlement notice) [Or Compounding application filed before the framing of charge]

0.85 d. Proceeding pending after the submission of the report by the Designated Authority [Or Compounding application filed after framing of charge]

0.9 e. Proceedings pending after passing of a final order imposing penalty or issuing civil and administrative directions, as the case may be

1.10 f. Proceedings pending after the passing of the order by the Securities Appellate Tribunal or Court

1.20 36 “TABLE II -VALUE for ORDERS AND REGULATORY DIRECTIONS ISSUED X* * To also include those orders and directions which have been stayed by the Securities Appellate Tribunal or Court, as on the date of the application. In case multiple proceedings have been initiated for the same cause of action, the value shall be added for each final order passed.

In this schedule an ‘intermediary or securities market infrastructure institutions’ includes any person required by securities laws to be registered or recognised by the Board.

TABLE III- VALUE FOR ORDER OR DIRECTION PASSED OR ISSUED FOR WHICH THE APPLICATION IS FILED – Y ORDERS AND REGULATORY DIRECTIONS ISSUED TO THE APPLICANT X PER ORDER Exonerated cases (i.e. cases where applicant was exonerated in an order or appeal or review) and any settlement order involving confidentiality 0 Any other Settlement Order 0.01 ALL OTHER ORDERS (EXCEPT FOR WHICH THE APPLICATION IS FILED) Cease and desist order 0.02 Final order issued against other persons associated with the securities markets 0.05 Final order issued against an intermediary or securities market infrastructure institutions or listed companies, and their principal officers

0.075 FINAL ORDER AGAINST INTERMEDIARY OR SECURITIES MARKET INFRASTRUCTURE INSTITUTION, FOR WHICH APPLIED FINAL ORDER AGAINST ANY PERSON OTHER THAN INTERMEDIARY OR SECURITIES MARKET INFRASTRUCTURE INSTITUTION, FOR WHICH APPLIED ‘Y’ PER ORDER Warning issued 0.05 Suspension/Debarment upto 1 month Debarment upto 6 calendar months 0.1 Suspension/Debarment for 1 month or more, but less than 6 months Debarment for 6 calendar months or more, but less than 1 year

0.15 37

CHAPTER V APPLICABLE BASE VALUES AND FACTORS BV= 1+ SUM OF APPLICABLE BASE VALUES I. While assessing the relevant factors, the IC or HPAC or Panel of WTMs may take into account the following general mitigating factors with a base value of ‘-0.2’ applied once for all or any of them:

1. The quantum of IA would affect the ability of the applicant to make restitution to investors:

Explanation. - In such cases higher IA may be sought from the officer who is in default.

2. The applicant had minimal participation in the alleged default;

3. Proactive and exceptional cooperation, including:

a. Prompt and detailed self-identification of suspected or uncovered misconduct;

b. Early self-identification of contraventions followed by thorough internal reviews and sharing of discovered facts;

c. Substantial assistance to an investigation or inquiry by obtaining and providing evidence.

4. Acceptance of responsibility and acknowledgement of misconduct to the Board prior to detection and intervention by truthfully admitting the conduct;

Suspension/Debarment for 6 month or more but less than 1 year Debarment for 1 year or more but less than 2 years

0.2 Suspension/Debarment for 1 year or more but less than 2 years Debarment for 2 years or more but less than 3 years

0.25 Suspension/Debarment for 2 years or more Debarment for 3 years or more 0.3 38

5. Voluntarily employing subsequent substantial corrective measures to avoid recurrence of misconduct;

6. Where the delay in complying with the reporting requirement was less than 7 days and non-reporting did not result in undue gain or loss to any person;

7. Voluntary acts of compensation, disgorgement of commission, profits and payment of restitution to investors;

8. Disclosure made in the incorrect format;

9. Applicant is a unit of governmental authority including a public-sector unit.

II. While assessing the relevant factors, the IC or HPAC or Panel of WTMs may take into account the following general aggravating factors with a base value of ‘0.2’ applied once for all or any of them:

1. Efforts to frustrate or prolong an investigation, inquiry or a civil and administrative proceeding, including settlement proceedings:

2. Providing inaccurate or misleading testimony or information or wilfully failing to provide information that he was bound to provide;

3. Misconduct over an extended period of time which is not less than 30 days;

4. Significant monetary loss to the clients which exceeds in aggregate of Rs 5 crores;

5. Applicant had failed to heed prior regulatory guidance and prior warnings;

6. Evidence of planning, pre-meditation or sophisticated means:

Explanation: Conducting default across different jurisdictions, hiding assets or transactions, or both, through the use of fictitious entities, corporate shells or offshore financial accounts ordinarily indicates sophisticated means.

7. A listed intermediary or securities market infrastructure institution was substantially jeopardized:

Explanation. - A listed intermediary or securities market infrastructure institution shall be deemed to have been substantially jeopardized if as a result of the alleged default:

a. it has become insolvent or an application under the Insolvency and Bankruptcy Code, 2016 was admitted;

b. it was unable on demand to refund fully any public deposit, payment or investment; or c. it is so depleted of assets that it is forced to merge with another institution in order to continue active operations.

8. The liquidity of the securities of a publicly traded company was substantially endangered i.e. it was delisted or trading of the company’s securities was halted for more than one full trading day;

9. The applicant abused a position of trust or used a special skill, in a manner such that significantly facilitated the commission or concealment of the alleged default:

Explanation 1. - This factor applies if the applicant occupied and abused a position of trust. It does not apply to an ordinary tippee.

Explanation 2. - This factor applies if the applicant’s position involved regular participation or professional assistance in creating, issuing, buying, selling, or trading securities or products was used to facilitate significantly the commission or concealment of the default. It does not apply to clerical staff in an organisation; as such position ordinarily does not involve special skill.

Explanation 3. - ‘Special skill’ refers to a skill not possessed by members of the general public and requires professional education, training or licensing, e.g. chartered accountant, advocate, auditor, compliance officer, etc.

Explanation 4. - This factor also applies where the applicant has represented himself to hold a position of trust when, in fact, he does not.

10. The applicant was the key-operator, whether or not he himself traded:

Explanation 1. - A person is a key-operator if he was an organizer or leader of an illegal activity or the main beneficiary of the default:

Provided that, if a person is merely a manager or supervisor (but not an organizer or leader or the main beneficiary) then he is not a key-operator.

Explanation 2. - The IC or HPAC or Panel of WTMs may take into account factors such as share of profits, the recruitment of accomplices, the degree of control and authority exercised over others.

11. Exercising management control by use of fraudulent or forged securities or securities issued without appropriate approvals;

12. Reporting of false information.

III. While assessing the relevant factors, the IC or HPAC or Panel of WTMs may take into account the following factors tending to show the alleged default was deliberate with a base value of ‘0.25’ applied once for all or any of them:

1. The actions were not in accordance with the applicable internal procedures;

2. The individual knowingly took decisions relating to the violation beyond his field of competence;

3. The individual intended to benefit financially from the violation, either directly or indirectly;

4. The alleged default was repetitive.

IV. While assessing the relevant factors, the IC or HPAC or Panel of WTMs may take into account the following factor tending to show the alleged default was reckless with a base value of ‘0.3’:

1. The body corporate or the responsible person, appreciated there was a risk that their actions or inaction could result in a violation of securities laws and failed adequately to mitigate that risk:

Explanation. – The following shall be deemed to be reckless, - a. failure to appoint competent officials for discharge of their duties, including a compliance officer;

b. failure to put in place adequate systemic safeguards; or c. failure to put in place a code of conduct.

V. While considering the various factors and the aggregate base values, the following specific base values shall also be taken into account, - TABLE IV- GENERAL BASE VALUES, APPLICABLE IN ALL CASES NATURE OF VIOLATION BASE VALUE a.

Fraudulent and unfair trade practice (FUTP); or Insider trading, including tipping (IT); or violation

0.25 41 of code of conduct noted in an investigation or inquiry related to FUTP or IT Or FUTP or IT in combination with the violation of code of conduct or any other regulation Or FUTP in combination IT or in combination with a violation of requirement relating to anti-money laundering and know your client.

Or Failure by a market infrastructure institution or its principal officers to conduct its business in a fair manner.

Or Failure by a market infrastructure institution or its principal officers to conduct its business in a fair manner in combination with FUTP or IT or the violation of code of conduct or any other regulation

0.3

0.35

0.50

0.75 [In case multiple are applicable, only the highest value shall be applied.]

42 *Factor ‘c’ is applicable only in cases where the actual profit and/or loss avoided (approx.) is determinable and disgorgement with interest is not ordered. While calculating the period, the fractions may be ignored.

b. Factors for volume traded and/or price change for the default Sum of ‘V’, ‘P’ and ‘Q’, wherever applicable, to be applied to each member of group or the applicant when he acts alone, only if the volume traded or price change, quantity traded in respect of the group, of which the applicant is a part of or the applicant when he acts alone, as the case may be, can be calculated from the findings brought out in the investigation report or inquiry or notice to show cause or order, as the case may be.

In case multiple trading periods are involved, the highest change has to be considered.

c. Time value of ill-gotten gains* 0.09 × multiple of calendar years from the date of commission of the default d.

Reputation risk applicable in all settlements without admitting violation of securities laws All applicants: 0.25 e. Violation in illiquid scrip 0.3 f. Persons who are indigent or undergoing liquidation or bankruptcy process or whose resolution/repayment plan has been submitted to the adjudicating authority for approval - 0.3 43 ‘V’ = VALUE FOR THE HIGHEST % OF VOLUME TRADED IN ANY TRADING PERIOD DURING THE ENTIRE PERIOD OF VIOLATION In case of more than one scrip, the scrip with the highest volume traded is to be considered ‘P’ = VALUE FOR HIGHEST % OF PRICE CHANGE DURING THE ENTIRE PERIOD OF VIOLATION In case of more than one scrip, the scrip with the highest price change is to be considered TABLE IVA- SPECIAL BASE VALUES, IN ADDITION TO GENERAL BASE VALUES % VOLUME TRADED (ILLIQUID SCRIP) ‘V’ % VOLUME TRADED (LIQUID SCRIP) Upto 50% 0.1 Upto 2% 50 -60% 0.15 2-5% 60-75% 0.2 5-10% 75% or more 0.25 10% or more TABLE IVB- SPECIAL BASE VALUES, IN ADDITION TO GENERAL BASE VALUES % PRICE CHANGE (ILLIQUID SCRIP) ‘P’ % PRICE CHANGE (LIQUID SCRIP) Upto 50% 0.1 Upto 5% 50-100% 0.15 5-10% 100-200% 0.2 10-20% 200% or more 0.25 20% or more 44 ‘Q’ = VALUE FOR HIGHEST % OF PRICE CHANGE, DURING THE PERIOD OF DEFAULT FOR F&O & LEVERAGED PRODUCTS In case of more than one product, the contract with the highest price change is to be considered TABLE IVC- SPECIAL BASE VALUES, IN ADDITION TO GENERAL BASE VALUES % PRICE CHANGE ‘Q’ Upto 0.5% 0.1

0.5-1% 0.15 1-5% 0.2 5% or more 0.25 TABLE V- SPECIAL BASE VALUES, IN ADDITION TO GENERAL BASE VALUES FOR DISCLOSURE AND OPEN OFFER DEFAULTS NATURE OF VIOLATION BASE VALUE a. In Non-disclosure (including incorrect or incomplete disclosure) charge under any regulation relating to takeover, insider trading or issue or listing of securities in combination with any other charge

0.20 b. In Non-Disclosure (including incorrect or incomplete disclosure) matters: Applicant has made related disclosure under any other regulation or is a body corporate with paid-up equity share capital (including reserves) below Rupees Ten crores (not applicable to companies which are exclusively holding companies) - 0.5 c. In open offer violations: acquirer not in control of target company, prior to triggering the takeover

0.25 45 VI. In cases of multiple applicants where joint and several liabilities exists, a single IA may be based on the factors and the weightages applicable to the default in general, as the IC or HPAC or Panel of WTMs may deem fit and any other factor may also be considered while imposing any limit in respect of amounts that may be required from a particular applicant, in respect of the IA calculated for multiple applicants.

CHAPTER VI APPLICABLE BASE AMOUNT GENERAL GUIDELINE: In case the applicant is charged for non-disclosure under Regulations relating to Open Offer [SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, and any subsequent similar regulations] and PIT [Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, SEBI (Prohibition of Insider Trading) Regulations, 2015, and any subsequent similar regulations], the highest of the Base Amount arrived at for such charges shall be reduced by 75%.

APPLICABLE BA = 'The illegal profits’ + ‘loss caused to investors' [quantified as per the guidelines, if any, issued by the Board] Or The BA as per the Tables in this Chapter, whichever is higher.

TABLE-VI BA FOR ALLEGED DEFAULT RELATING TO OPEN OFFER NATURE OF VIOLATION BA FOR ACQUIRER AND PERSONS ACTING IN CONCERT 47 DELAYED OPEN OFFER RUPEES 25 LAKH OR

0.25% OF THE OPEN OFFER SIZE, I.E. MAX NUMBER OF SHARES FOR WHICH OPEN OFFER MUST BE GIVEN X APPLICABLE OPEN OFFER PRICE, WHICHEVER IS HIGHER DELAYED OPEN OFFER (AFTER DIRECTION FROM THE BOARD) RUPEES 50 LAKH OR

0.5% OF THE OPEN OFFER SIZE, WHICHEVER IS HIGHER WHERE THE MAKING OF THE OPEN OFFER IS INFRUCTUOUS I.E. WHEN COMPANY HAS BEEN DELISTED, WHEN OPEN OFFER IS NOT BENEFICIAL TO SHAREHOLDERS, ETC INFRUCTUOUS BY AN ACT OF THE COMPANY REQUIRED TO MAKE AN OPEN OFFER INFRUCTUOUS DUE TO OTHER REASON, INCLUDING WHEN OPEN OFFER IS NOT BENEFICIAL TO SHAREHOLDERS 48 RUPEES 1 CRORE OR OPEN OFFER SIZE, WHICHEVER IS HIGHER ANY AMOUNT BETWEEN THE MINIMUM PENALTY TO PROBABLE COST OF OPEN OFFER AS RECOMMENDED BY THE CORPORATE FINANCE DEPARTMENT OF THE BOARD TABLE-VII BA FOR ALLEGED DEFAULT RELATING TO DISCLOSURES UNDER SECURITIES EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS -1997/2011 49 PERCENTAGE OF SHAREHOLDING OR VOTING RIGHTS ACQUIRED OR DISPOSED BUT NOT DISCLOSED OR PERCENTAGE OF ENCUMBERED SHARES BUT NOT DISCLOSED, ETC.

BA FOR VIOLATION OF REGULATION 7 OF 1997 REGULATIONS OR REGULATION 29 OF 2011 REGULATIONS (I) REGULATION 8 OF 1997 REGULATIONS OR REGULATION 30 OF 2011 REGULATIONS (II) REGULATION 8A OF 1997 REGULATIONS OR REGULATION 31 OF 2011 REGULATIONS (III) Less than 2% Rupees 2 lakh + Rupees 5,000/- For every three months delay# or part thereof 2% to less than 5% Rupees 5 lakh + Rupees 10,000/- For every three months delay or part thereof 50 Notes to Table VII:

1. Table VII is not applicable in cases where the disclosure related violation is in combination with FUTP or IT.

Explanation: Dealing while in possession of material financial or shareholding information may be treated as IT.

2. The BA for violation at (II) shall only be as per the lowest slab, irrespective of change in shareholding over the reporting period.

In case of violations related to disclosures that are required to be made annually\ the amount for delay for every three months or part thereof shall be computed only for the first disclosure violation. In case the noticee complies with the annual reporting 5% to less than 10% Rupees 10 lakh + Rupees 15,000/- For every three months delay or part thereof 10 % to less than 15% Rupees 15 lakh + 0.1 % of the value of the holding not disclosed, etc.

+ Rupees 20,000/- For every three months delay or part thereof 15% and above Rupees 20 lakh + 0.1 % of the value of the holding not disclosed, etc.

+ Rupees 25,000/- For every three months delay or part thereof 51 requirements for a few years, such compliance will not result in a higher amount than would have otherwise be calculated for continuous violations.

3. The period of delay is to be calculated from the last day, when the disclosure ought to have been made, as required by the regulations.

TABLE VIII BA – ALLEGED DEFAULT RELATING TO TRANSACTION SPECIFIC DISCLOSURES UNDER REGULATIONS 13(3), 13(4), 13(4A) AND CORRESPONDING 13 (6) OF 1992 PIT REGULATIONS [INCLUDES, CORRESPONDING TRANSACTION SPECIFIC DISCLOSURES UNDER REGULATIONS OF 2015 PIT REGULATIONS] PERCENTAGE OF SHAREHOLDING OR VOTING RIGHTS ACQUIRED OR DISPOSED BUT NOT DISCLOSED OR PERCENTAGE OF ENCUMBERED SHARES BUT NOT DISCLOSED, ETC.

BA Less than 2% Rupees 2.5 lakh + 52 Rupees 7,500/- For every three months delay or part thereof 2% to less than 5% Rupees 6 lakh + Rupees 12,500/- For every three months delay or part thereof 5% to less than 10% Rupees 12 lakh + Rupees 17,500/- For every three months delay or part thereof 10 % to less than 15% Rupees 18 lakh + 0.1 % of the value of the holding not disclosed, etc.

+ Rupees 22,500/- For every three months delay or part thereof 15% and above Rupees 25 lakh + 0.1 % of the value of the holding not disclosed, etc.

+ Rupees 25,000/- For every three months delay or part thereof 53 Notes to Table VIII:

1. In cases of disclosure related violations by connected persons or by key managerial persons, the BA may be increased by 25%.

2. Table VIII is not applicable in cases where the disclosure related violation is in combination with FUTP or IT.

Explanation: Dealing while in possession of material financial or shareholding information may be treated as IT.

TABLE IX BA - DISCLOSURES RELATED VIOLATIONS NOT COVERED IN TABLES VII AND VIII NATURE OF ALLEGED DEFAULT BASE AMOUNT TYPE OF DISCLOSURE RELATED VIOLATION PIT REGULATIONS Periodical and other disclosures Rupees 5 lakh + Rupees 5,000/- for every three months delay or part thereof, if applicable 54 OPEN OFFER REGULATIONS Reporting requirements or disclosures for which exemptions are available, except cases of noncompliance of a condition precedent for availing exemption would result in triggering of an open offer obligation (The Regulation 6 of 1997 Regulations are dated and no amount may be imposed for its violation, except in case of standalone violations of Regulation 6 the minimum SA may be applicable) Rupees 5 lakh + Rupees 10,000/- for every three months delay or part thereof, if applicable VIOLATIONS UNDER REGULATIONS RELATED TO FOREIGN INSTITUTIONAL INVESTORS Failure to provide information Rupees 20 lakh per default Intimation of material changes Rupees 10.0 lakh per default RESIDUARY Code of conduct reporting requirements or Rupees 5 lakh 55 Notes to Table IX:

1. In cases of disclosure related violations by key managerial persons, the Benchmark Amount may be increased by 25%.

2. Table IX is not applicable in cases where the disclosure related violation is in combination with FUTP or IT.

Explanation: Dealing while in possession of material financial or shareholding information may be treated as IT.

Disclosures on appointment of director or Any other disclosure related violations that are not detailed in this Chapter, if deemed appropriate + Rupees 10,000/- for every three months delay or part thereof, if applicable TABLE-X RESIDUARY BA, FOR EACH UNIT OF ALLEGED DEFAULT FOR EACH APPLICANT OR ON JOINT LIABILITY BASIS (AS PER THE SUM OF APPLICABLE AMOUNTS IN CASE OF JOINT APPLICANTS) INDIVIDU AL (PRINCIPA L OFFICERS NOT BODY CORPOR ATE & FIRM PRINCIP AL OFFICER S & SECTION 15B AND 15F OF SEBI ACT & FAILURE IN REDRESS ING INVESTO R MARKET INFRAST RUCTUR E INSTITUT IONS FUND RELATED DEFAULTS (AND PRINCIPAL OFFICERS IN 56 INCLUDED ) (I) (AND PRINCIP AL OFFICER S IN CASES RELATIN G TO JOINT LIABILIT Y WITH THE BODY CORPOR ATE /FIRM) (II) COMPLI ANCE OFFICER S [WHEN NOT IN II, IV- VII] (III) SIMILAR DEFAULT S (AND PRINCIP AL OFFICER S IN CASES RELATIN G TO JOINT LIABILIT Y WITH THE INTERME DIARY) (IV) GRIEVAN CES (AND PRINCIP AL OFFICER S IN CASES RELATIN G TO JOINT LIABILIT Y WITH THE INTERME DIARY/ ISSUER) (V) (FOR DELAY (AND PRINCIP AL OFFICER S IN CASES RELATIN G TO JOINT LIABILIT Y WITH THE INSTITUT ION) (VI) CASES RELATING TO JOINT LIABILITY WITH THE FUND) (VII) 57 REDUCE TO 1/4) BA WHERE:

DEFAULT RELATE TO FUTP OR IT, FALSE/ MISLEADING/ INCORRECT/INC OMPLETE DISCLOSURES IN OFFER DOCUMENTS, FAILURE BY MARKET INFRASTRUCTU RE INSTITUTIONS TO CONDUCT BUSINESS IN THE RUPEES 15 LAKHS RUPEES 1 CRORES RUPEES 45 LAKHS RUPEES 15 LAKHS RUPEES 30 LAKHS RUPEES 5 CRORES RUPEES 33 LAKHS OR

0.01% OF THE AVERAGE ASSET UNDER MANAGEMEN T, AT TIME OF VIOLATION OR

0.5% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, 58 REQUIRED MANNER, A RECKLESS VIOLATION, OR A DISGORGEMENT /REFUND IN EXCESS OF RUPEES 1 CRORE (M) WHICHEVER IS HIGHER BENCHMARK WHERE VIOLATION INVOLVED AT (M) AND, - RUPEES 60 LAKHS RUPEES 3 CRORES RUPEES 2 CRORES RUPEES 60 LAKHS RUPEES 80 LAKHS RUPEES 10 CRORES RUPEES 60 LAKHS OR 59 SUCH VIOLATION DIRECTLY OR INDIRECTLY – (I) RESULTED IN SUBSTANTIAL LOSSES TO OTHER PERSONS, (II) CREATED A SIGNIFICANT RISK OF SUBSTANTIAL LOSSES TO OTHER PERSONS, OR (III) AFFECTED THE INTEGRITY OF THE SECURITIES MARKETS (N)

0.05% OF THE AVERAGE ASSET UNDER MANAGEMEN T, AT TIME OF VIOLATION OR

0.075% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER 60 RESIDUARY (O) RUPEES 3 LAKHS RUPEES 15 LAKHS RUPEES 10 LAKHS RUPEES 3 LAKHS RUPEES 6 LAKHS RUPEES 3 CRORES RUPEES 15 LAKHS OR

0.001% OF THE AVERAGE ASSET UNDER MANAGEMEN T, AT TIME OF VIOLATION OR

0.01% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, 61 Note to Table X:

1. In case of applicability of more than one BA, the highest is to be considered.

2. In this Schedule, ‘Principal Officer’ means a person that may be covered under Section 27 of the SEBI Act, as amended by the Finance Act, 2018.

3. ‘Fund’ means an AIF, MF, CIS, and any other pooling arrangement required to be registered with the Board.

4. ‘Body corporate’ in (II) of this Table includes, any applicant not covered in (I) and (III) to (VII).

WHICHEVER IS HIGHER 62

CHAPTER VII REPETITIVE NATURE OF DEFAULT I. The counts of defaults may be selected using one or more or a combination of the methods indicated in this Chapter.

Explanation. - Different methods may be used in respect of different persons in the same cause of action as may be required for arriving at a reasonable IA.

II. In general, the unit of alleged default may be selected from either of, or a combination of, the following, - i. the (approx.) number of purchase or sale transaction, ii. the (approx.) number of individual deceptions attempted, iii. the (approx.) number of investors involved, or iv. ‘Course of conduct’ standard -whereby each counts amounts to a complete violation. Discretion may be used to apply a different standard that is less prejudicial to a person after taking into account the interest of the investors in securities:

Provided that, where a large number of counts of a default are noted, for arriving at a reasonable IA a less prejudicial standard of selecting the unit of default may be applied.

Explanation. - In respect of a default relating to a report or statement, - i. each person to whom a misleading report was sent or statement made may involve a separate “act”;

ii. each distinct misleading report or statement made may be a separate “act”;

iii. each distinct misleading statement within a report may be a separate “act”;

iv. the course of conduct standard in respect of all or any such reports or statements;

or v. a combination of i, ii, iii and iv above.

63 III. Course of Conduct standard: Depending on the facts and circumstances of a case, for the purpose of arriving at a reasonable IA, “course of conduct” standard in which multiple counts of a violation are aggregated and counted as a single violation for purposes of calculating IA may be applied.

Explanation 1. - It may be reasonable to aggregate multiple counts of a default if, -

(a) the conduct did not involve manipulative, fraudulent or deceptive intent or insider trading, except where the recommended IA would otherwise be extremely disproportionate to the conduct;

Explanation. – “disproportionate” and “reasonable” refer to the appropriateness vis- à-vis the deterrence sought to be achieved and not appropriateness vis-à-vis the illegal profit made by the applicant or loss caused to investors.

(b) the conduct did not result in substantial injury to the rights of public investors, or if restitution was made in such cases; and

Explanation 2. – Depending on the facts and circumstances, the units of violation may be based on how long the violations continued, however no uniformity of the period of time (daily, weekly, fortnightly, monthly, yearly) is required. The multiple counts of violation acts may be combined into one or more than one course of conduct.

***************** 64 Schedule III Part-A (See regulation 16) Format To Date …….

Address Sub: Notice of summary settlement in the matter of .....................................

During the course of investigation/ inspection/ inquiry/ audit in the matter of ……………………………………………. the Securities and Exchange Board of India (SEBI) has prima facie observed that you have violated the following provisions of the securities laws:

(i) …………..

(ii) …………..

(iii) …………..

(iv) …………..

Extracts of the findings are enclosed.

2. In view of the aforesaid, probable proceedings against you under….(relevant provisions under which the proceedings may be initiated or continued) may be initiated or continued .

3. Notwithstanding anything contained in this notice, the Board reserves the right to modify the proceedings and charges to be brought against you and this notice shall not confer any right to seek settlement or avoid any action initiated by the Board.

4. Subject to Regulation 5 of the SEBI (Settlement Proceedings) Regulations, 2018 the aforesaid proceedings to be initiated may be settled and disposed of upon filing of a settlement application under Chapter-II of the SEBI (Settlement Proceedings) Regulations, 2018 upon remittance of a settlement amount of Rs. …………..to SEBI in terms of …..

………………… (provision) of SEBI (Settlement Proceedings) Regulations, 2018 within 30 calendar days from the date of receipt of this notice and upon complying with the following non-monetary terms (if applicable):

(i) . …………………

(ii) ......................…… (please specify any other terms)

5. In case the settlement application is not filed or the settlement amount is not remitted and/or undertaking in respect of other non-monetary terms is not furnished or other non-monetary terms are not complied with to the satisfaction of the Board or the settlement application is withdrawn, the specified proceedings may be initiated or continued, as the case may be and you shall be permitted to file a settlement application only at the next stage in respect of proceedings pending before a Court or a tribunal, after conclusion of proceedings before the Adjudicating Officer or the Board, as the case may be.

Name, designation and signature Encl: As above 66 Part-B (See regulation 18) Format To Date …….

Address Sub: Notice of settlement in the matter of .....................................

(i) …………..

(ii) …………..

(iii) …………..

(iv) …………..

Extracts of the findings are enclosed.

2. In view of the aforesaid, probable proceedings against you under….(relevant provisions under which the proceedings may be initiated or continued) may be initiated or continued.

4. Subject to regulation 5 of the SEBI (Settlement Proceedings) Regulations, 2018, the aforesaid proceedings to be initiated may, be settled and disposed of upon filing of a 67 settlement application under Chapter-II of the SEBI (Settlement Proceedings) Regulations, 2018 within 15 calendar days from the date of receipt of this notice.

5. If the settlement application is not filed, the Board may initiate any proceedings against you in accordance with law and you shall be permitted to file a settlement application only at the next stage in respect of proceedings pending before a Court or a tribunal, after conclusion of proceedings before the Adjudicating Officer or the Board, as the case may be.

Name, designation and signature Encl: As above 68

SCHEDULE IV (see Regulation 19) Application for confidentiality

1. The application for confidentiality shall be in the format convenient to the applicant and shall inter-alia, include the following, - i. name and address of the applicant or its authorized representative as well as of all other known participants involved in the alleged default;

ii. the address of the applicant for communication including the telephone numbers and the e- mail address, etc.;

iii. a detailed description of the alleged arrangement, including its aims and objectives and the details of activities and functions carried out for securing such aims and objectives;

iv. the commencement and duration of the default;

v. the names, positions, office locations and, wherever necessary, home addresses of all persons who, in the knowledge of the applicant, are or have been associated with the alleged defaulters, including those persons who have been involved on behalf of the applicant;

vi. the details of other authorities, forums or courts, if any, that have been approached or are intended to be approached in relation to the alleged violation;

vii. a descriptive list of evidence regarding the nature and content of evidence provided in support of the application for confidentiality; and viii. any other material information as may be directed by the Board.

(Signature of the applicant) (Stamp and Seal of body corporate applicant) 69 Verification I, ………………………………………………son/daughter/wife of (Name in block letters) Shri …………………………………..being the applicant/authorised representative (in case of body corporate) of ……………………. do hereby verify and affirm on oath that this application and the contents thereof are true to my knowledge and belief and as per the records and that I have not suppressed any material facts and shall keep the Board informed without delay, of any other relevant information that may come to my notice.

(Signature of the applicant) Date:

Place :

2. The undertaking and waiver as specified in Part C of Schedule-I shall be annexed to the application for confidentiality.

AJAY TYAGI CHAIRMAN SECURITIES AND EXCHANGE BOARD OF INDIA *************

Section 34

Where this provision sits

Find the provision, not just read it

Act	SEBI (Settlement Proceedings) Regulations, 2018
Section	34
Jurisdiction	Central
Status	In force as published by the source