Markets News

SEBI probes on major violations of market regulations

According to reports, market regulator SEBI is set to penalise on major violations of market regulations.

This includes suspensionof trading taking over two years to complete despite fall in thetotal number of pending investigations.

The aim is to complete all probes in a time-bound manner besides instances causing unprecedented delay.

This is due to exponential expansion of the capital market and entry of many new players multiplying it’s workload.

Moreover, litigation is also one of the major causes of delay.

Around 506 or 45.4 percent of investigations are pending for more than two years. However, this is out of 1,114 pending investigations and enquiries SEBI has initiated so far.

These cases represent enforcement actions the regular initiated comprising adjudication proceedings and enquiry proceedings.

It further involves those under Section 11, 11B and 11D of the SEBI Act respectively.

The clauses empower SEBI to bar entities from the securities market and suspend trading in the shares of a company.

Besides these, they also help impose a monetary penalty for violating capital market regulations.

Investigations and enquires of this category constitute the largest share of matters that has slowed down over the years.

As on 31 March 2020, around 63% of the cases falling under the clauses category were older than two years.

In fact, the share of such pending cases in this category has witnessed a steady hike over the years.

Also, 2015-16 saw less than 21% of the matters under these sections as older than two years. This surged to 34.34% in 2016-17 and 49.15% in 2017-18.

In the financial year 2018-19, the share of such matters increased to 53.40%.

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