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In a bid to incentivise whistleblowers, SEBI has decided to increase the maximum reward for information related to insider trading from ₹1 crore to ₹10 crore.
The actual quantum of reward will be decided on a case-to-case basis. But if the total reward payable to the informant is less than or equal to ₹1 crore, then the reward will be given by SEBI, after the final order is issued.
If the total reward payable is more than ₹1 crore, then an interim reward of up to ₹1 crore may be granted by SEBI, after the final order is issued. The remaining reward amount will be granted only upon receipt of the monetary sanctions amounting to at least twice the balance of the reward amount payable by SEBI.
Market regulator has been trying to streamline the whistle-blower mechanism over the past 2 years. In 2019, it had raised the reward to ₹1 crore. But it had also said that in case the information submitted is frivolous or vexatious, it may initiate appropriate action against the informant under securities laws and any other applicable laws.
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