SEBI launches amnesty scheme for 150 brokers

November 28, 2022 

Window will open for brokers on December 19

Market regulator SEBI, on Monday, announced an amnesty scheme for 150 stock brokers of the BSE against whom enforcement proceedings were pending for trading in illiquid scrips on the exchange. SEBI’s announcement came after businessline reported on November 13 that brokers were planning to challenge SEBI’s amnesty scheme for clients since they were not included in it despite the same offence.

SEBI’s scheme for brokers will commence on December 19 and close on January 19, 2023.

One-time settlement

SEBI’s Amnesty scheme–02 for clients was extended up to January 21 after it expired on November 21. It was made available to various retail traders in August this year as a one-time settlement opportunity to nearly 15,000 entities accused of the same offence, which is unfair trading in illiquid stock options on the BSE.

Experts said that as per the law, a broker’s liability in respect of his/her clients’ trade is proportionate. Simply put, brokers and clients are equal if found violating norms. So, if there is an amnesty scheme for clients, it is natural that SEBI extends the same to brokers.

‘No legal sanctity’

Brokers had told businessline that the scheme lacked legal sanctity since it defied the principles of natural justice by excluding them from the amnesty being extended to their clients. Moreover, the scheme was only limited to one exchange, BSE, while it left out other exchanges and their clients and brokers.

SEBI intended to collect a minimum of ₹750 crore from the scheme if all the entities settled by paying a fine, which is based on the count of offences committed. The maximum collection is expected to be worth several thousands of crores of rupees.

[The Hindu Business Line]