From now on, persons or entities accused of minor violations would be allowed to settle enforcement proceedings against them even before they are served formal show cause notices by the market regulator.

The move would help save on cost and time, said market regulator.

SEBI will send intimation to the entity under scrutiny in case of minor violations, before issuing a formal enforcement show cause notice. The initial notice will enable the entity to settle the administrative and civil proceedings through the consent mechanism.

Currently, settlement of proceedings commences after the issue of show cause notice.

According to SEBI, the practise of providing the first opportunity to settle administrative and civil proceedings only post the show cause notice stage results in delay in conclusion of proceedings and resultant wastage of resources.

“SEBI, has, therefore decided that in minor violations intimations will be sent about impending enforcement action to the concerned parties upon arrival of the said actions by the competent authority and before a show cause notice is issued,” the regulator said.

“This would enable parties to seek settlement of proceedings or make voluntary submissions even prior to receipt of a detailed show cause notice.

“If any party avails such an opportunity to respond to such notice, the proposed proceedings may be settled or discontinued on the basis of submission of the noticee,” it added.

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