SEBI to come up with fourth settlement scheme for illiquid stock options cases

New business data points to the fact that Market regulator Securities and Exchange Board of India (SEBI) Board will launch fourth settlement scheme for cases related to illiquid stock options (ISO), providing another opportunity to entities facing regulatory proceedings arising from trades in the segment.

The scheme will provide eligible entities an opportunity to settle proceedings related to non-genuine trades executed on BSE between April 1, 2014 and September 30, 2015, where enforcement proceedings are pending before an adjudicating officer, the Securities Appellate Tribunal (SAT), courts or a recovery officer.

SEBI had earlier introduced three settlement schemes for such cases in 2020, 2022 and 2024, under which a large number of concerned entities settled the proceedings initiated against them. The latest scheme was approved by SEBI's competent authority following recommendations from the High Power Advisory Committee (HPAC) and was placed before the Board for information.

The settlement amount will be linked to the number of contracts involved. For entities with one to five contracts, the settlement amount will be Rs 1.44 lakh. For six to 50 contracts, it will be Rs 2.88 lakh.

For entities with 51 contracts or more, the amount will be Rs 7.2 lakh plus Rs 14,400 for each contract. For example, an entity with 51 contracts will have to pay Rs 14.544 lakh. SEBI stated the modalities for filing applications under the scheme will be announced separately.

The scheme has been introduced under Section 15JB of the SEBI Act, 1992, read with Regulation 26 of the SEBI (Settlement Proceedings) Regulations, 2018.