SEBI Settlement: SBICAP Trustee Company Ltd Agrees To Rs 25.08 Lakh Payment Over Regulatory Violations
SBICAP Trustee Company Ltd, a subsidiary of SBI Capital Markets Ltd, has reached a settlement with the Securities and Exchange Board of India (SEBI) concerning alleged violations of debenture trustee regulations. The settlement, prompted by an application from SBICAP to SEBI, requires the company to make a payment of Rs 25.08 lakh.
The resolution pertained to SEBI's issuance of a show cause notice which alledged that SBICAP inadequately disclosed information on its website regarding the maintenance of a 'recovery expense fund' and the schedule of interest/redemptions. SEBI also highlighted that there were improper disclosures related to asset cover certificates.
Section 15JB of the SEBI Act grants SEBI the authority to dispose of adjudication proceedings through settlement. It allows SEBI to accept settlement terms proposed by the parties involved, provided they meet the prescribed criteria and are in accordance with the law.
Regulation 23(1) of the Settlement Regulations elaborates on the process of settling adjudication proceedings. It states the conditions under which SEBI may dispose of proceedings through settlement and provides the framework for such settlements to be made effective.
SBICAP, while not admitting or denying the findings of SEBI, proposed settlement terms to resolve the proceedings. Following discussions and revisions to the proposed terms, the settlement amount of Rs 25.08 lakh was recommended by the High Powered Advisory Committee (HPAC) and which was approved by SEBI's Panel of Whole Time Members.
Upon remittance of the settlement amount by SBICAP, confirmed by SEBI on June 7, 2024, the adjudication proceedings against SBICAP were formally disposed of according to SEBI Act and Settlement Regulations.