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 ₹1 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 SEBI’s 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 “𝘌𝘹𝘱𝘭𝘢𝘪𝘯𝘦𝘥: 𝘚𝘌𝘉𝘐’𝘴 𝘚𝘦𝘵𝘵𝘭𝘦𝘮𝘦𝘯𝘵 𝘚𝘤𝘩𝘦𝘮𝘦 𝘧𝘰𝘳 𝘉𝘳𝘰𝘬𝘦𝘳𝘴 𝘪𝘯 𝘈𝘭𝘨𝘰 𝘛𝘳𝘢𝘥𝘪𝘯𝘨 𝘊𝘢𝘴𝘦.”
Mr. Sumit Agrawal is of the view that the scheme offers a structured mechanism by way of fixed settlement amount of ₹1 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 ‘neither admit nor deny’ 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