SEBI Extends One-time Stock Settlement Scheme on Illiquid Option Cases to 21st January amid Good Response
Moneylife Digital Team 22 November 2022
Market regulator Securities and Exchange Board of India (SEBI) said the SEBI Settlement Scheme 2022 for entities related to trading in illiquid stock options has been extended to 21 January 2023, thanks to a large number of entities having shown interest in availing the scheme.
 
“It has been observed that during the last few days, large number of entities have shown interest in availing the Scheme. Considering the interest of entities in availing the Scheme, the competent authority has extended the period of the Scheme till 21 January 2023," SEBI said. The settlement scheme commenced on 22nd August and was to end on Monday.
 
On 19th August, SEBI had introduced the Settlement Scheme, 2022, which provided a one-time settlement opportunity to those entities that have executed trade reversals in the stock options segment of Bombay Stock Exchange (BSE) during the period from 1 April 2014 to 30 September 2015 and against whom adjudication proceedings were initiated and were pending before any forum or authority.
 
Entities against whom orders have been passed levying penalty that has not been paid and against whom recovery proceedings have been initiated, were eligible for the scheme, only if an appeal is filed and it is pending before the courts/ securities appellate tribunal (SAT).
 
According to sources, a total of 7,000 entities had already applied under the scheme till last week. Most of the entities can settle their proceedings by paying only Rs1 lakh as a settlement amount.
 
This is not the first time the regulator has given the chance to the entities to settle cases. In 2020, the capital market regulator had provided a one-time settlement scheme for such entities. Initially, the scheme was available from 1st August to 31 October 2020, but later extended till 31 December 2020, in view of the large-scale disruption caused by COVID.
 
The advantage of participation in the scheme is that entities are not subjected to further quasi-judicial proceedings on the same matter. The settlement is also done without admission of guilt.
 
Over 14,000 entities had indulged in reversal trades in options which were illiquid.  Reverse trades are trades in which a trader buys a particular stock and sells it back to the same person.
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