TaxTMI 
TaxTMI 
Guidelines for arriving at settlement terms
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....isting 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 cau....
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....ve amount (IA) shall be calculated as follows: IA= A X B + Legal Costs^# #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. '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 f....
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....ication. In case multiple proceedings have been initiated for the same cause of action, the value shall be added for each final order passed. 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 *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 FINAL ORDER AGAINST INTERMEDIARY OR SECURITIES MARKET INFRASTRUCTURE INSTITUTION, FOR WHICH APPLIED FINAL ORDER AGAINST ANY PERSON OTHER THAN INTERMED....
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....ay take into account the following general aggravating factors with a base value of '0.2' ^9[for each of them wherever applicable, subject to a maximum limit of 3]: 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 shal....
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....hout 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' ^10[for each of them wherever applicable, subject to a maximum limit of 3]: 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 ap....
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.... 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 *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. '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 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 'P' = VALUE FOR HIGHEST % OF PRICE CHANGE DURING THE ENTIRE PERIOD OF VIOLATION In case of more than one scrip, the scrip with ....
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....cquisition 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%. TABLE-VI BA FOR ALLEGED DEFAULT RELATING TO OPEN OFFER NATURE OF VIOLATION BA FOR ACQUIRER AND PERSONS ACTING IN CONCERT DELAYED OPEN OFFER Rs. 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) Rs. 50 LAKH OR 0.5% OF THE OPEN OFFER SIZE, WHICHEVER IS HIGHER ^2[WHERE THE MAKING OF THE OPEN OFFER IS INFRUCTUOUS INFRUCTUOUS BY AN ACT OF THE ACQUIRER INFRUCTUOUS BY AN ACT OF THE COMPANY OR BY ANY OTHER REASON RUPEES 1 CRORE OR OPEN OFFER SIZE, WHICHEVER IS HIGHER ANY AMOUNT BETWEEN RUPEES 10 LAKHS TO RUPEES 35 LAKHS; WITH A MULTIPLIER BETWEEN 1 TO 3 AS DECIDED BY THE IC OR HPAC OR THE PANEL OF WTMS] ....
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....e after a period of more than 4 Quarters, then the value for 4 Quarters would be taken as maximum value for that specific disclosure violation. 5. If there are multiple transaction attracting disclosure requirement in a Quarter, then the value of highest change and max. delay may be considered for arriving at the base amount irrespective of count of violations.] ^12[Table-VIII BASE AMOUNT - ALLEGED DEFAULT RELATING TO TRANSACTION SPECIFIC DISCLOSURES UNDER REGULATIONS 13(3), 13(4), 13(4A) AND 13 (6) OF 1992 PIT REGULATIONS [INCLUDES CORRESPONDING TRANSACTION SPECIFIC DISCLOSURES UNDER 2015 PIT REGULATIONS] PERCENTAGE OF SHAREHOLDING OR VOTING RIGHTS ACQUIRED OR DISPOSED BUT NOT DISCLOSED OR PERCENTAGE OF ENCUMBERED SHARES BUT NOT DISCLOSED, ETC. BASE AMOUNT Less than 2% Rs. 2 lakh + Rs. 7,500/- For every three months delay or part thereof 2% to less than 5% Rs. 4 lakh + Rs. 12,500/- For every three months delay or part thereof 5% to less than 10% Rs. 7 lakh + Rs. 17,500/- For every three months delay or part thereof 10 % to less than 15% Rs. 9 lakh + 0.1 % of the value of the holding not disclosed, etc. + Rs. 22,500/- For every ....
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....very three months delay or part thereof, if applicable 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. ^14[Table-X RESIDUARY BASE AMOUNT, 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) BASE AMOUNT WHERE: NAME LENDERS# (I) BODY CORPORATES & INDIVIDUALS (WHEN NOT IN I, III-V) (II) INTERMEDIARY INCLUDING PRINCIPAL OFFICERS (III) MARKET INFRASTRUCTURE INSTITUTIONS INCLUDING PRINCIPAL OFFICERS (IV) FUND RELATED DEFAULTS I NCLUDING PRINCIPAL OFFICERS (V) DEFAULTS RELATE RUPEES 10 RUPEES 40 RUPEES 20 Rs. 2 CRORE RUPEES 40 TO FUTP OR IT, FALSE/ MISLEADING/ INCORRECT/ INCOMPLETE DISC....
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....ance Act, 2018. 3. 'Fund' means an Alternative Investment Fund (AIF), Mutual Fund (MF), Collective Investment Scheme (CIS) and any other pooling arrangement required to be registered with the Board. 4. Body Corporate in (II) in this Table includes, any applicant not covered in (I) and (III) to (V).] 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 se....
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.... 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 Rs. 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" 3. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/24 dated 22-07-2020 before it was read as "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) INDIVIDIUAL (PRINCIPAL OFFICERS NOT INCLUDED) (I) BODY CORPORATE & FIRM (AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE BODY CORPORATE /FIRM) (II) PRINCIPAL OFFICERS & COMPLIANCE OFFICERS [WHEN NOT IN II, IV-VII] (III) SECTION 15B AND 15F OF SEBI ACT & SIMILAR DEFAULTS (AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INT....
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....r securities laws." 6. Omitted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as "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 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." 7. Substituted vide Notification No. SEBI/LAD-NRO/GN/2....
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.... every three months delay^# or part thereof 2% to less than 5% Rs. 5 lakh + Rs. 10,000/- For every three months delay or part thereof 5% to less than 10% Rs. 10 lakh + Rs. 15,000/- For every three months delay or part thereof 10 % to less than 15% Rs. 15 lakh + 0.1 % of the value of the holding not disclosed, etc. + Rs. 20,000/- For every three months delay or part thereof 15% and above Rs. 20 lakh + 0.1 % of the value of the holding not disclosed, etc. + Rs. 25,000/- For every three months delay or part thereof 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 annua....
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....MOTERS AND PRINCIPAL OFFICERS NOT INCLUDED) (I) BODY CORPORATE & FIRM (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE BODY CORPORATE /FIRM) (II) PROMOTE, PRINCIPAL OFFICERS & COMPLIANCE OFFICERS [WHEN NOT IN II, IV-VII] (III) SECTION 15B AND 15F OF SEBI ACT & SIMILAR DEFAULTS (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INTERMEDIAR Y) (IV) FAILURE IN REDRESSING INVESTOR GRIEVANCES (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INTERMEDIA RY/ ISSUER) (V) (FOR DELAY REDUCE TO 1/4) MARKET INFRASTRUCTUR E INSTITUTIONS (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INSTITUTION) (VI) FUND RELATED DEFAULTS (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE FUND) (VII) BA WHERE: DEFAULT RELATES TO FUTP OR IT, FALSE/ MISLEADING/ INCORRECT/INCOMPL ETE DISCLOSURES IN OFFER DOCUMENTS, FAILURE BY MARKET INFRASTRUCTURE INSTITUTIONS TO CONDUCT BUSINESS IN THE REQUIRED MANNER, A RECKLESS VIOLATION, OR A DISGORGEMENT/REF UND IN EXCESS OF RUPEES 1 CRORE (M) RUPEES 15 ....