Sebi plans to open consent doors for serious violations

Sebi plans to open consent doors for serious violations

The Securities and Exchange Board of India (Sebi) is broadening the scope of the consent mechanism to reduce the number of cases it is handling. According to sources, the regulator is planning to allow serious offences such as insider trading, front running, or fraudulent and unfair practices to be settled under the mechanism. Sources privy to the development said Sebi would take a fresh look at the pricing formulae to decide the settlement amount under consent.

Currently, the formulae prescribed by Sebi have too many variables, making the process ambiguousThe regulator is working on simple formulae to arrive at settlement fees, sources say, adding that the new consent framework will be introduced in less than two months

During the last board meeting, the Sebi chief had acknowledged the need for tweaking the consent rules.“We are revisiting the settlement norms and have started rewriting certain regulations,” Ajay Tyagi, chairman, Sebi, had said.The move comes when the regulator is grappling with pending cases. According to the Sebi Annual Report for FY17, there are more than 7,000 cases with Sebi.

The consent mechanism is the process under which an alleged wrongdoer can settle a violation with Sebi without admitting or denying the transgression. The settlement involves penal action, which could be fees, a market ban, or both.

A large number of these cases involve serious violations such as insider trading, which, at the outset, shuts the consent door in the current framework. However, in a lot of them, the loss incurred by investors or damage caused is very minimal. The new framework is being designed primarily to address such cases.

“Opening up the consent mechanism for all violations would help in reducing the burden of cases. There are many cases involving unlawful gains worth even less than Rs 1.5 million. However, due to statutory limitations, Sebi is unable to settle them,” said a source

Bringing serious violations under the consent mechanism has been a contentious issue for the regulator. Sebi came up with a circular for settling cases through the consent mechanism first in 2007. The circular talked about the basic procedure that needed to be adopted for consent. However, it didn’t exclude any of the violations from the ambit of consent

In 2011, Sebi settled a case against Anil Ambani and his ADA Group, which were allegedly accused of routing money raised through overseas bonds to the stock market in 2007. Ambani had paid settlement fees of Rs 500 million.

However, following the backlash for the settlement, Sebi revisited the regulations in 2012 with a new circular, which said serious violations like insider trading, fraudulent and unfair trade practices that have a marketwide impact, failure to make open offers, and front running were excluded from the consent process. Later in 2014, it enacted a regulation termed Settlement of Administrative and Civil Proceedings to give more legal sanctity to the consent framework.

“Under the Sebi settlement regulations, serious offences which have marketwide impact or have caused substantial losses to or have affected the rights of in investors in securities, especially retail and small shareholders cannot be settled,” said Yogesh Chande, partner, Shardul Amarchand Mangaldas.

Simplifying the price formulae to determine the settlement fees is another key aspect that Sebi is looking to revamp. The current method of calculation is complex and open to interpretation. The current scheme takes into consideration more than 10 factors, including the value of violation and the stage of the case. Legal experts say Sebi could come up with a simpler approach wherein there would be three variables.

Globally, consent is a popular route adopted by market regulators to reduce the burden of investigation and prosecution. For instance, in the US markets, close to 90 per cent of the alleged violations are settled through the consent mechanism.

The Business Standard, New Delhi, 22th January 2018

New income tax slab and rates for new tax regime FY 2023-24 (AY 2024-25) announced in Budget 2023

Basic exemption limit has been hiked to Rs.3 lakh from Rs 2.5 currently under the new income tax regime in Budget 2023. Further, the income tax slabs in the new tax regime has been changed. According to the announcement, 5 income tax slabs will be there in FY 2023-24, from 6 income tax slabs currently. A rebate under Section 87A has been enhanced under the new tax regime; from the current income level of Rs.5 lakh to Rs.7 lakh. Thus, individuals opting for the new income tax regime and having an income up to Rs.7 lakh will not pay any taxes The income tax slabs under the new income tax regime will now be as follows: Rs 0 to Rs 3 lakh - 0% tax rate Rs 3 lakh to 6 lakh - 5% Rs 6 lakh to 9 lakh - 10% Rs 9 lakh to Rs 12 lakh - 15% Rs 12 lakh to Rs 15 lakh - 20% Above Rs 15 lakh - 30% The revised Income tax slabs under new tax regime for FY 2023-24 (AY 2024-25) Income tax slabs under new tax regime Income tax rates under new tax regime O to Rs 3 lakh 0 Rs 3 lakh to Rs 6 lakh 5% Rs 6

Jaitley plans to cut MSME tax rate to 25%

Income tax for companies with annual turnover up to ?50 crore has been reduced to 25% from 30% in order to make Micro, Small and Medium Enterprises (MSME) companies more viable and also to encourage firms to migrate to a company format. This move will benefit 96% or 6.67 lakh of the 6.94 lakh companies filing returns of lower taxation and make MSME sector more competitive as compared with large companies. However, bigger firms have shown their disappointment since the proposal for reducing tax rates was to make Indian firms competitive globally and it is the large firms that are competing globally. The Finance Minister foregone revenue estimate of Rs 7,200 crore per annum for this for this measure. Besides, the Finance Minister refrained from removing or reducing Minimum Alternate Tax (MAT), a popular demand from India Inc., but provided a higher period of 15 years for carry forward of future credit claims, instead of the existing 10-year period. “It is not practical to rem

Don't forget to verify your income tax return in August: Here's the process

An ITR return needs to be verified within 120 days of filing of tax return. Now that you have filed your income tax return, remember to verify it because your return filing process is not complete unless you do so. The CBDT has reduced the time limit of ITR verification to 30 days (from 120 days) from the date of return submission. The new rule is applicable for the returns filed online on or after 1st August 2022. E-verification is the most convenient and instant method for verifying your ITR. However, if you prefer not to e-verify, you have the option to verify it by sending a physical copy of the ITR-V. Taxpayers who filed returns by July 31, 2023 but forget to verify their tax returns, will get the following email from the tax department, as per ClearTax. If your ITR is not verified within 30 days of e-filing, it will be considered invalid, and may be liable to pay a Late Fee. Aadhaar OTP | EVC through bank account | EVC through Demat account | Sending duly signed ITR-V through s

CA Online

Search This Blog