Settlement mechanism: Sebi sets grounds for granting confidentiality to applicants

Markets regulator Sebi has set various grounds on the basis of which an applicant can be assured confidentiality while filing a plea under the settlement mechanism. In a circular, the regulator also listed the factors that can adversely affect the applicant's claim for confidentiality.

"In order to assure confidentiality to an applicant who provides assistance in examination proceedings, the Board may assess the information/assistance/cooperation rendered during such examination proceedings" by considering various factors such as nature of assistance provided and gravity of the matter," Sebi said in the circular on Tuesday.

For the confidentiality, the regulator will assess whether the co-operation was provided before the applicant had knowledge of any pending proceedings.


The other factors such as whether the provided information was truthful, complete and reliable will be ascertained.

While taking into cognisance the gravity of matter, factors like nature and type of defaults under the securities laws, age of applicant, repetitive nature of defaults and the effect of defaults on investors will be considered.

Further, the regulator while laying down the grounds for rejection of confidentiality said that history of securities laws' violations by the applicant, and the plausibility of the reasons for the applicant to delay reporting of the violations of the securities laws, among other factors, will be taken into account.