SEBI Clears Fourth Round Of Settlement For Illiquid Stock Options Cases, Sets Settlement Amount
Add Preferred News Source
SEBI’s fourth settlement scheme for illiquid stock options cases will cover eligible entities with pending proceedings, with the settlement amount linked to the number of contracts involved in trades executed on the BSE between April 2014 and September 2015.
The Securities and Exchange Board of India (SEBI) will introduce a fourth settlement scheme for cases linked to illiquid stock options, giving eligible entities another opportunity to settle regulatory proceedings arising from trades executed on the BSE between April 2014 and September 2015.
The latest scheme will cover cases involving non-genuine trades where proceedings are still pending before adjudicating officers, the Securities Appellate Tribunal (SAT), courts or recovery officers.
SEBI has already introduced three settlement schemes for illiquid stock options cases in 2020, 2022 and 2024. The latest scheme comes as several matters from the old stock options segment remain pending.
SEBI illiquid stock options settlement amount
The settlement amount under the fourth scheme will depend on the number of contracts involved. Entities with one to five contracts will have to pay ₹1.44 lakh, while those with six to 50 contracts will have to pay ₹2.88 lakh.
For entities with 51 contracts or more, the settlement amount will be ₹7.2 lakh plus ₹14,400 for each additional contract. For example, an entity with 51 contracts would have to pay ₹14.544 lakh under the proposed structure. SEBI said details on how applications will be filed will be announced separately.
What is the SEBI illiquid stock options case?
The cases relate to trading in illiquid stock options on the BSE between April 1, 2014 and September 30, 2015.
SEBI has taken action against entities in these matters over non-genuine or reversal trades in the stock options segment. The regulator had earlier created settlement schemes to allow eligible entities to resolve such proceedings by paying a prescribed settlement amount.
The first major settlement framework was introduced in 2022 after the Securities Appellate Tribunal directed SEBI to consider a one-time scheme for the class of entities involved in the cases.
SEBI subsequently introduced another settlement scheme in 2024 as proceedings continued against entities that had not settled their cases earlier. Under that scheme, the settlement amount was ₹1.2 lakh for one to five contracts, ₹2.4 lakh for six to 50 contracts, and ₹6 lakh plus ₹12,000 per contract for 51 contracts and above.
Why is SEBI bringing another settlement scheme?
The latest scheme is aimed at giving eligible entities another route to close pending proceedings and reduce the backlog of illiquid stock options cases.
SEBI said the fourth scheme was approved by its competent authority following recommendations from the High Power Advisory Committee (HPAC). The proposal was subsequently placed before the SEBI Board for information.
The scheme has been introduced under Section 15JB of the SEBI Act, 1992, read with Regulation 26 of the SEBI (Settlement Proceedings) Regulations, 2018.
SEBI has not yet announced the application process or the dates for the new settlement window. The regulator is expected to provide the details separately.
Also Read - PB Fintech Shares Crash 36% As IRDAI Proposal Wipes Out ₹31,000 Crore Market Value, What To Watch Today
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
Right Tools, Rich Insights
