In a welcome move aligned with long-standing industry requests, SEBI has rolled out a settlement scheme to resolve proceedings initiated against registered stock brokers associated with algorithmic trading platforms.
SEBI has introduced a Settlement Scheme to streamline compliance and reduce litigation. This initiative follows the issuance of show cause notices to over 110 stock brokers, including several prominent market participants. The Scheme will be open from June 16, 2025, to September 16, 2025.
The scheme allows the eligible stockbrokers to pay a fixed settlement amount of โน1 lakh, along with registration charges, without contesting the proceedings. The scheme to entities against whom enforcement proceedings are pending before the Adjudicating Officer, SAT or courts.
Those who have already filed a settlement application need not reapply-they must simply pay the specified amounts and submit the required undertakings online through SEBIโs portal. Entities choosing not to avail the scheme will face continued regulatory action under applicable SEBI laws.
In this context, Mr. Sumit Agrawal, Managing Partner at Regstreet Law Advisors and former SEBI officer, has been quoted in a moneycontrol.com coverage by Brajesh Kumar titled “๐๐น๐ฑ๐ญ๐ข๐ช๐ฏ๐ฆ๐ฅ: ๐๐๐๐โ๐ด ๐๐ฆ๐ต๐ต๐ญ๐ฆ๐ฎ๐ฆ๐ฏ๐ต ๐๐ค๐ฉ๐ฆ๐ฎ๐ฆ ๐ง๐ฐ๐ณ ๐๐ณ๐ฐ๐ฌ๐ฆ๐ณ๐ด ๐ช๐ฏ ๐๐ญ๐จ๐ฐ ๐๐ณ๐ข๐ฅ๐ช๐ฏ๐จ ๐๐ข๐ด๐ฆ.”
Mr. Sumit Agrawal is of the view that the scheme offers a structured mechanism by way of fixed settlement amount of โน1 lakh and compliance parameters, that reduces litigation, brings procedural closure, and provides much-needed regulatory certainty to over a hundred stockbrokers.
He is also of the view that the requirement to waive off appellate rights and provide sweeping undertakings, even under a โneither admit nor denyโ construct, poses legal dilemmas, particularly for brokers with cross-border businesses or fiduciary obligations.
Mr. Agrawal suggests the need for stronger safeguards around API integrations and warns against regulatory overreach, calling for measures to restore trust in the enforcement process.
The full quote and article of moneycontrol.com can be accessed at: https://lnkd.in/dSWHcUP2