Can entities avoid legal action from Sebi?
In some instances, market participants can, but the new settlement norms do not guarantee that the market regulator will drop every form of action. According to the proposal, Sebi can now issue a settlement notice before a show-cause notice, except where prosecution is proposed, giving an entity 60 days to apply. Filing an application can delay or avoid the final enforcement order while the settlement is considered. However, Sebi can reject applications, and interim directions to protect investors or market integrity can still be issued. So, settlement offers an alternative to prolonged proceedings, but it is not an automatic shield from regulatory action.
