The Securities and Exchange Board of India (SEBI) has introduced a new circular on August 05, 2025 to streamline the mechanism for reviewing, appealing, or waiving penalties imposed by Market Infrastructure Institutions (MIIs) like stock exchanges, clearing corporations, and depositories.
Presently, under the SEBI Master Circular dated December 30, 2024, it was provided that ‘๐๐ฏ๐บ ๐ณ๐ฆ๐ท๐ช๐ฆ๐ธ, ๐ข๐ฑ๐ฑ๐ฆ๐ข๐ญ ๐ฐ๐ณ ๐ธ๐ข๐ช๐ท๐ฆ๐ณ ๐ฐ๐ง ๐ฑ๐ฆ๐ฏ๐ข๐ญ๐ต๐บ ๐ง๐ช๐ญ๐ฆ๐ฅ ๐ด๐ฉ๐ข๐ญ๐ญ ๐ฃ๐ฆ ๐ฑ๐ญ๐ข๐ค๐ฆ๐ฅ ๐ฃ๐ฆ๐ง๐ฐ๐ณ๐ฆ ๐๐ ๐ง๐ฐ๐ณ ๐ช๐ต๐ด ๐ค๐ฐ๐ฏ๐ด๐ช๐ฅ๐ฆ๐ณ๐ข๐ต๐ช๐ฐ๐ฏ’. The updated framework seeks to further streamline and formalize this process, bringing clarity and accountability to internal review mechanisms within MIIs.
๐๐๐ฒ ๐ฎ๐ฉ๐๐๐ญ๐๐ฌ:
1. ๐๐ง๐ญ๐๐ซ๐ง๐๐ฅ ๐๐จ๐ฆ๐ฆ๐ข๐ญ๐ญ๐๐ (๐๐) & ๐๐๐ฆ๐๐๐ซ ๐๐จ๐ฆ๐ฆ๐ข๐ญ๐ญ๐๐ (๐๐) ๐๐๐ญ๐ข๐จ๐ง๐ฌ: Requests for review/appeal against penalties imposed by the IC or MIIs (as per pre-approved policies) will be placed before the Member Committee.
2. ๐๐ ๐๐๐๐ข๐ฌ๐ข๐จ๐ง๐ฌ: Appeals against penalties imposed by the MC itself will be handled by a new mechanism set up by the MIIโs Governing Board, involving Public Interest Directors or Independent External Professionals (who are not part of the MC).
3. ๐ ๐ฎ๐ซ๐ญ๐ก๐๐ซ ๐๐ฉ๐ฉ๐๐๐ฅ๐ฌ: Members retain the right to approach higher authorities including Securities Appellate Tribunal under applicable laws if unsatisfied with the MIIโs decision.
The new rules come into effect 45 days from the circularโs issuance (August 05, 2025).
This circular effectively introducesย an additional layer of reviewย before a party approaches theย Honโble Securities Appellate Tribunal. Itโs important to note that the Honโble SAT in the matter of ๐ช๐๐๐๐๐ ๐ฌ๐๐๐๐๐ ๐ฉ๐๐๐๐๐๐ ๐ท๐๐๐๐๐๐ ๐ณ๐๐๐๐๐๐ ๐. ๐ด๐ช๐ฟ (2023 SCC OnLine SAT 1845) had also remarked the Exchange to have a proper laid down procedure to impose penalties.
A copy of the circular is attached.
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