TaxTMI 
TaxTMI 
Guidelines for arriving at settlement terms
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....le 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 pe....
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.... + 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 from the same cause of action has been initiated against the applicant, the IA shall be increased by 20%; 3. In case of grant ....
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.... 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 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 ca....
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....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 ₹ 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 t....
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.... 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 u....
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....RIP) '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 the highest price change is to be considered 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 '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 s....
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....EN 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] 11[TABLE-VII BASE AMOUNT FOR ALLEGED DEFAULT RELATING TO DISCLOSURES UNDER SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS -1997/2011 PERCENTAGE OF SHAREHOLDING OR VOTING RIGHTS ACQUIRED OR DISPOSED BUT NOT DISCLOSED OR PERCENTAGE OF ENCUMBERED SHARES BUT NOT DISCLOSED, ETC. BASE AMOUNT 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% ₹ 2 lakh + ₹ 5,000/- For every three months delay# or part thereof 2% to less than 5% ₹ 4 lakh + ₹ 10,000/- For every three months delay or part thereof 5% to less than 10% ₹ 7 lakh + ₹ 15,000/- For every three months delay or part thereof 10 % to less than 15% ₹ 9 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 20,000/- For every three months delay or part thereof 15% and above &#....
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....of 15% and above ₹ 10 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 25,000/- For every three months delay or part thereof 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 Fraudulent and Unfair Trade Practices or Insider Trading. Explanation: Dealing while in possession of material financial or shareholding information may be treated as Insider Trading. 3. If the disclosure for any violation is made after a period of 4 Quarters, then the value for 4 Quarters would be the maximum value for that specific disclosure violation. 4. If there are multiple transactions attracting disclosure requirements in a Quarter, then the value of highest change and maximum delay may be considered for arriving at the Base Amount irrespective of the count of violations.] 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 othe....
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.... - (I) RESULTED IN SUBSTANTIAL LOSSES TO OTHER PERSONS, OR (II) CREATED SUBSTANTIAL LOSSES OR A SIGNIFICANT RISK OF LOSSES TO OTHER PERSONS OR (III) AFFECTED THE INTEGRITY OF THE SECURITIES MARKETS (N)## ₹ 20 LAKHS ₹ 1 CRORE RUPEES 30 LAKHS ₹ 4 CRORES ₹ 75 LAKHS DELAY IN REDRESSING INVESTOR GRIEVANCES (O) - RUPEES 3 LAKHS ₹ 5 LAKHS ₹ 7 LAKHS ₹ 10 LAKHS RESIDUARY (P) RUPEES 3 LAKHS ₹ 10 LAKHS ₹ 10 LAKHS ₹ 1 CRORE ₹ 15 LAKHS #Name Lenders include individual applicants who submit to the satisfaction of the IC or HPAC or Panel of WTMs that, without knowledge of the illegal activity, he/she was involved in the violation to the extent of permitting/lending the use of his/her securities account or name or facility to the key operator or core entities or intermediary or securities market infrastructure institution involved in such activity. In addition, name lenders will also include individuals who are identified as such either in the investigation report or in the show cause notice or in the order of the Adjudicating Officer/SEBI/Court/Tribunal. While ar....
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....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. 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 (c) the violations resulted from a systemic problem or cause that has b....
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....D IN EXCESS OF ₹ 1 CRORE (M) ₹ 15 LAKHS ₹ 1 CRORES RUPEES 45 LAKHS ₹ 15 LAKHS ₹ 30 LAKHS ₹ 5 CRORES ₹ 33 LAKHS OR 0.01% OF THE AVERAGE ASSET UNDER MANAGEMENT, AT TIME OF VIOLATION OR 0.5% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER BENCHMARK WHERE VIOLATION INVOLVED AT (M) AND, - 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) ₹ 60 LAKHS ₹ 3 CRORES ₹ 2 CRORES ₹ 60 LAKHS RUPEES 80 LAKHS ₹ 10 CRORES ₹ 60 LAKHS OR 0.05% OF THE AVERAGE ASSET UNDER MANAGEMENT, AT TIME OF VIOLATION OR 0.075% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER RESIDUARY (O) ₹ 3 LAKHS ₹ 15 LAKHS ₹ 10 LAKHS ₹ 3 LAKHS ₹ 6 LAKHS ₹ 3 CRORES ₹ 15 LAKHS OR 0.001% OF THE AVERAGE ASSET UNDER MANAGEMENT, AT TIME OF VIOLATION OR 0.01% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER" 4. Substituted vide Notification No. SEBI/LAD-NRO/GN....
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....e 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" 8. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as "applied once for all or any of them" 9. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as "applied once for all or any of them" 10. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as "applied once for all or any of them" 11. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as "TABLE-VII BA FOR ALLEGED DEFAULT RELATING TO DISCLOSURES UNDER SECURITIES EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS -1997/2011 PERCENTAGE OF SHAREHOLDING....
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....ISCLOSED OR PERCENTAGE OF ENCUMBERED SHARES BUT NOT DISCLOSED, ETC. BA Less than 2% ₹ 2.5 lakh + ₹ 7,500/- For every three months delay or part thereof 2% to less than 5% ₹ 6 lakh + ₹ 12,500/- For every three months delay or part thereof 5% to less than 10% ₹ 12 lakh + ₹ 17,500/- For every three months delay or part thereof 10 % to less than 15% ₹ 18 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 22,500/- For every three months delay or part thereof 15% and above ₹ 25 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 25,000/- For every three months delay or part thereof 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." 13. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as "FOREIGN INSTI....