scorecardresearchBrokers plan to legally challenge SEBI’s amnesty scheme: Report

Brokers plan to legally challenge SEBI’s amnesty scheme: Report

Updated: 14 Nov 2022, 12:02 PM IST
TL;DR.

They said the scheme lacks legal sanctity since it defies the principles of natural justice by excluding them from the amnesty being extended to their clients.

SEBI's chairperson Madhabi Puri Buch

SEBI's chairperson Madhabi Puri Buch

Several stock brokers are planning to challenge the Amnesty Scheme 02 of market regulator SEBI, reported Business Line. 

The scheme, which closes on November 21, was made available by SEBI in August as a one-time settlement opportunity to nearly 15,000 entities accused of the same offence, which is unfair trading in illiquid stock options on the BSE.

Brokers said the scheme lacks legal sanctity since it defies the principles of natural justice by excluding them from the amnesty being extended to their clients. Moreover, the scheme is only limited to one exchange, BSE, while it leaves out other exchanges and their clients and brokers.

SEBI intended to collect a minimum of 750 crore from the scheme if all the entities settled by paying a fine, which is based on the count of offences committed. The maximum collection from it is anticipated to be worth several thousands of crore.

A major racket was busted by SEBI in 2015 when its former member Rajeev Kumar Agarwal passed an order against 59 entities for trading in illiquid options of stocks on the BSE.

Then, certain entities consistently made losses in trading, executed among themselves and even reversed some of them. In 2018, Madhabi Puri Buch, SEBI’s then whole-time member followed it up and promised action against entities for sham transactions.

First Published: 14 Nov 2022, 12:02 PM IST