SCHEDULE II - GUIDELINES FOR ARRIVING AT SETTLEMENT TERMS - Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018

SCHEDULE-II (See regulation 10) CHAPTER I GUIDELINES FOR ARRIVING AT SETTLEMENT TERMS 1. The settlement amount (SA) shall comprise of the Indicative Amount (IA) arrived at in terms of these guidelines and the factors provided in regulation 10, wherever applicable. 2. The IA shall not be less than ₹ 3 lakh for first time applicants or ₹ 7 lakh for others, as the case may be 4 [ . ] 5 [ **** ] Explanation.-A first time applicant is a person against whom no order has been passed by the adjudicating officer or by the Board or who has never obtained a settlement order from the Board as on the date of the present application. 3. Based on the stage at which the proceeding(s), for which the application is made, is/are pending, the proceeding conversion factor (PCF) shall be applied when calculating the IA. 4. In cases, where an existing business or activity of a person is either corporatized or converted into an LLP or partnership or merged or taken over by a new management, the existing record of the erstwhile entity shall be deemed to be the record of the new entity. Considerations including insolvency, change of name or management or ownership, etc., shall be considered in accordance with the guidelines issued by the Board, if any, from time to time. 5. PCF for Applications made voluntary or seeking settlement with confidentiality: Where an entity desires to obtain the benefit of a lower PCF, it may, suo motto, before the receipt of any notice to show cause, intimate the Board of such default hereinafter referred to as intimation defaults and co-operate with the Board in the investigation, inquiry, inspection or audit. Such an application shall be deemed to have been made Pre- issue of notice to show cause for the purpose of calculating the PCF. 6. The IA shall be calculated per count of default, jointly or separately as per the facts and circumstances of the case, in accordance with these guidelines. 7. While considering the application, the alleged default(s) detailed in the Inspection Report or the Investigation Report or the Report of the Designated Authority (DA) or the notice to show cause, including any supplementary notice to show cause issued by any authority in a pending proceeding, or the facts/findings detailed in the order of the Designated Member (DM) or the Whole Time Member (WTM) or the Adjudicating Officer (AO) or the Securities Appellate Tribunal (SAT), as applicable, may be the basis for calculating the IA. In case, the Internal Committee (IC) or the High Powered Advisory Committee (HPAC) or the Panel of Whole Time Members (WTMs) are of the opinion that the facts disclose a different default, the modification of the charge(s) may be sought. 8. The alleged defaults shall, wherever applicable, be categorised based on the facts and circumstances by the IC or HPAC or the Panel of WTMs. 9. Notwithstanding anything contained in these guidelines, the IC or HPAC or Panel of WTMs shall have the discretion to recommend acceptance or rejection or accept or reject an application, to recommend an amount, lower or higher than the amounts arrived at in terms of these guidelines, for reasons to be recorded, in accordance with the provisions of securities laws, considering the facts and circumstances of the case and the gravity of the charges. 10. In case the applicant is body corporate, the IC or HPAC or Panel of WTMs may require that the SA payable by a body corporate is to be paid by the officers in default including the persons in charge of the body corporate to avoid burdening investors holding securities issued by the body corporate: Explanation. The principle in clause 10 may be applied mutatis mutandis to the sponsor, manager, or trustee (by whatever name called) of a trust, the karta of a Hindu Undivided Family, the office bearers of an association of persons, as the case may be. 11. In cases where the formulae for calculating the IA are inapplicable or cannot be adapted due to the peculiar nature of the default or the facts and circumstances of the case or where the defaults detailed in the Tables in these guidelines are not covered, the IC or HPAC or Panel of WTMs may arrive at the SA, as they deem fit. 1 [ 11A. The applicant shall be provided opportunity of hearing or meeting only before the Internal Committee. ] 12. In case of an amendment(s) or repeal of the securities laws, these guidelines shall continue to apply to similar provisions under the amended or new laws, mutatis mutandis. Chapter II INDICATIVE AMOUNT AND THE SETTLEMENT AMOUNT Indicative amount (IA) shall be calculated as follows: IA= A X B + Legal Costs # #Legal costs of the Board may be applicable to an application made at the stages mentioned in points b , d and e as provided in Table I. Where: A = PCF + RAF A: Multiplying Factor. PCF: Proceeding Conversion Factor. RAF: Regulatory Action Factor. B = BV x BA B: Applicable Benchmark Amount, is the amount attributable to every count of the alleged default in accordance with these guidelines; BV : Aggregate of the base values given to the relevant factors including the aggravating and mitigating factors in respect of a particular charge. BA : Base amount attributable to every count of the alleged default in accordance with these guidelines. 1. The IA shall not exceed the maximum penalty under securities laws that may be levied for each count of violation multiplied by the counts of alleged default in accordance with these guidelines. 2. (a) Where an order of penalty has been passed prior to making an application, then B shall not be less than the penalty so awarded; (b) In case more than one proceeding arising from the same cause of action has been initiated against the applicant, the IA shall be increased by 20%; 3. In case of grant of confidentiality, the IA arrived in accordance with this Schedule shall, be further reduced as follows, - i. those marked first in priority status may be granted reduction of up to or equal to ninety percent of the IA; ii. those marked second in priority status may be granted reduction of upto or equal to fifty percent of the IA; and iii. those marked third or subsequent in the priority status may be granted reduction upto or equal to twenty five percent of the IA. 4. The amount which is finally approved by the Panel of Whole Time Members is the SA. 6 [ **** ] CHAPTER III PROCEEDING CONVERSION FACTOR The values assigned on the basis of the stage of the proceedings, as on the date of the application, shall be the PCF as per Table I: Provided that where multiple proceedings arising out of the same cause of action are sought to be settled, the value of the proceeding which is at the most advanced stage, irrespective of the stage of progress of the other proceedings, shall be taken as the PCF. 7 [ TABLE-I PROCEEDING CONVERSION FACTOR STAGE OF THE PROCEEDING ( S ) WHEN THE SETTLEMENT APPLICATION IS FILED VALUE OF PCF a. Voluntary or for seeking settlement with confidentiality 0.40 b. Pre- issue of the notice to show cause/Summary Settlement 0.50 c. Post-issue of the first notice to show cause pertaining to any pending proceeding in the same cause of action 0.65 d. Proceeding pending after the submission of the report by the Designated Authority 0.80 e. Proceedings pending after passing of a final order imposing penalty or issuing civil and administrative directions, as the case may be 1.20 f. Proceedings pending after the passing of the order by the Securities Appellate Tribunal or Court 1.50 ] CHAPTER IV REGULATORY ACTION FACTOR -VALUE FOR ALL ORDERS AND REGULATORY DIRECTIONS The sum of all the values assigned to the order and regulatory direction(s) issued in the past, if any, shall be RAF . RAF = X + Y TABLE II -VALUE for ORDERS AND REGULATORY DIRECTIONS ISSUED X* * To also include those orders and directions which have been stayed by the Securities Appellate Tribunal or Court, as on the date of the application. In case multiple proceedings have been initiated for the same cause of action, the value shall be added for each final order passed. ORDERS AND REGULATORY DIRECTIONS ISSUED TO THE APPLICANT X PER ORDER Exonerated cases (i.e. cases where applicant was exonerated in an order or appeal or review) and any settlement order involving confidentiality 0 Any other Settlement Order 0.01 ALL OTHER ORDERS (EXCEPT FOR WHICH THE APPLICATION IS FILED) Cease and desist order 0.02 Final order issued against other persons associated with the securities markets 0.05 Final order issued against an intermediary or securities market infrastructure institutions* or listed companies, and their principal officers 0.075 *In this schedule an intermediary or securities market infrastructure institutions includes any person required by securities laws to be registered or recognised by the Board. TABLE III- VALUE FOR ORDER OR DIRECTION PASSED OR ISSUED FOR WHICH THE APPLICATION IS FILED Y FINAL ORDER AGAINST INTERMEDIARY OR SECURITIES MARKET INFRASTRUCTURE INSTITUTION, FOR WHICH APPLIED FINAL ORDER AGAINST ANY PERSON OTHER THAN INTERMEDIARY OR SECURITIES MARKET INFRASTRUCTURE INSTITUTION, FOR WHICH APPLIED Y PER ORDER Warning issued 0.05 Suspension/Debarment upto 1 month Debarment upto 6 calendar months 0.1 Suspension/Debarment for 1 month or more, but less than 6 months Debarment for 6 calendar months or more, but less than 1 year 0.15 Suspension/Debarment for 6 month or more but less than 1 year Debarment for 1 year or more but less than 2 years 0.2 Suspension/Debarment for 1 year or more but less than 2 years Debarment for 2 years or more but less than 3 years 0.25 Suspension/Debarment for 2 years or more Debarment for 3 years or more 0.3 CHAPTER V APPLICABLE BASE VALUES AND FACTORS BV= 1+ SUM OF APPLICABLE BASE VALUES I. While assessing the relevant factors, the IC or HPAC or Panel of WTMs may take into account the following general mitigating factors with a base value of -0.2 8 [ for each of them wherever applicable, subject to a maximum limit of 3 ] : 1. The quantum of IA would affect the ability of the applicant to make restitution to investors: Explanation. - In such cases higher IA may be sought from the officer who is in default. 2. The applicant had minimal participation in the alleged default; 3. Proactive and exceptional cooperation, including: a. Prompt and detailed self-identification of suspected or uncovered misconduct; b. Early self-identification of contraventions followed by thorough internal reviews and sharing of discovered facts; c. Substantial assistance to an investigation or inquiry by obtaining and providing evidence. 4. Acceptance of responsibility and acknowledgement of misconduct to the Board prior to detection and intervention by truthfully admitting the conduct; 5. Voluntarily employing subsequent substantial corrective measures to avoid recurrence of misconduct; 6. Where the delay in complying with the reporting requirement was less than 7 days and non-reporting did not result in undue gain or loss to any person; 7. Voluntary acts of compensation, disgorgement of commission, profits and payment of restitution to investors; 8. Disclosure made in the incorrect format; 9. Applicant is a unit of governmental authority including a public-sector unit. II. While assessing the relevant factors, the IC or HPAC or Panel of WTMs may take into account the following general aggravating factors with a base value of 0.2 9 [ for each of them wherever applicable, subject to a maximum limit of 3 ] : 1. Efforts to frustrate or prolong an investigation, inquiry or a civil and administrative proceeding, including settlement proceedings: 2. Providing inaccurate or misleading testimony or information or wilfully failing to provide information that he was bound to provide; 3. Misconduct over an extended period of time which is not less than 30 days; 4. Significant monetary loss to the clients which exceeds in aggregate of ₹ 5 crores; 5. Applicant had failed to heed prior regulatory guidance and prior warnings; 6. Evidence of planning, pre-meditation or sophisticated means: Explanation: Conducting default across different jurisdictions, hiding assets or transactions, or both, through the use of fictitious entities, corporate shells or offshore financial accounts ordinarily indicates sophisticated means. 7. A listed intermediary or securities market infrastructure institution was substantially jeopardized: Explanation. - A listed intermediary or securities market infrastructure institution shall be deemed to have been substantially jeopardized if as a result of the alleged default: a. it has become insolvent or an application under the Insolvency and Bankruptcy Code, 2016 was admitted; b. it was unable on demand to refund fully any public deposit, payment or investment; or c. it is so depleted of assets that it is forced to merge with another institution in order to continue active operations. 8. The liquidity of the securities of a publicly traded company was substantially endangered i.e. it was delisted or trading of the company s securities was halted for more than one full trading day; 9. The applicant abused a position of trust or used a special skill, in a manner such that significantly facilitated the commission or concealment of the alleged default: Explanation 1. - This factor applies if the applicant occupied and abused a position of trust. It does not apply to an ordinary tippee. Explanation 2. - This factor applies if the applicant s position involved regular participation or professional assistance in creating, issuing, buying, selling, or trading securities or products was used to facilitate significantly the commission or concealment of the default. It does not apply to clerical staff in an organisation; as such position ordinarily does not involve special skill. Explanation 3. - Special skill refers to a skill not possessed by members of the general public and requires professional education, training or licensing, e.g. chartered accountant, advocate, auditor, compliance officer, etc. Explanation 4. - This factor also applies where the applicant has represented himself to hold a position of trust when, in fact, he does not. 10. The applicant was the key-operator, whether or not he himself traded: Explanation 1. - A person is a key-operator if he was an organizer or leader of an illegal activity or the main beneficiary of the default: Provided that, if a person is merely a manager or supervisor (but not an organizer or leader or the main beneficiary) then he is not a key-operator. Explanation 2. - The IC or HPAC or Panel of WTMs may take into account factors such as share of profits, the recruitment of accomplices, the degree of control and authority exercised over others. 11. Exercising management control by use of fraudulent or forged securities or securities issued without appropriate approvals; 12. Reporting of false information. III. While assessing the relevant factors, the IC or HPAC or Panel of WTMs may take into account the following factors tending to show the alleged default was deliberate with a base value of 0.25 10 [ for each of them wherever applicable, subject to a maximum limit of 3 ] : 1. The actions were not in accordance with the applicable internal procedures; 2. The individual knowingly took decisions relating to the violation beyond his field of competence; 3. The individual intended to benefit financially from the violation, either directly or indirectly; 4. The alleged default was repetitive. IV. While assessing the relevant factors, the IC or HPAC or Panel of WTMs may take into account the following factor tending to show the alleged default was reckless with a base value of 0.3 : 1. The body corporate or the responsible person, appreciated there was a risk that their actions or inaction could result in a violation of securities laws and failed adequately to mitigate that risk: Explanation. The following shall be deemed to be reckless, - a. failure to appoint competent officials for discharge of their duties, including a compliance officer; b. failure to put in place adequate systemic safeguards; or c. failure to put in place a code of conduct. V. While considering the various factors and the aggregate base values, the following specific base values shall also be taken into account, - TABLE IV- GENERAL BASE VALUES, APPLICABLE IN ALL CASES NATURE OF VIOLATION BASE VALUE a. Fraudulent and unfair trade practice (FUTP); or Insider trading, including tipping (IT); or violation of code of conduct noted in an investigation or inquiry related to FUTP or IT Or FUTP or IT in combination with the violation of code of conduct or any other regulation Or FUTP in combination IT or in combination with a violation of requirement relating to anti-money laundering and know your client. Or Failure by a market infrastructure institution or its principal officers to conduct its business in a fair manner. Or Failure by a market infrastructure institution or its principal officers to conduct its business in a fair manner in combination with FUTP or IT or the violation of code of conduct or any other regulation 0.25 0.3 0.35 0.50 0.75 [In case multiple are applicable, only the highest value shall be applied.] b. Factors for volume traded and/or price change for the default Sum of V , P and Q , wherever applicable, to be applied to each member of group or the applicant when he acts alone, only if the volume traded or price change, quantity traded in respect of the group, of which the applicant is a part of or the applicant when he acts alone, as the case may be, can be calculated from the findings brought out in the investigation report or inquiry or notice to show cause or order, as the case may be. In case multiple trading periods are involved, the highest change has to be considered. c. Time value of ill-gotten gains* 0.09 multiple of calendar years from the date of commission of the default d. Reputation risk applicable in all settlements without admitting violation of securities laws All applicants: 0.25 e. Violation in illiquid scrip 0.3 f. Persons who are indigent or undergoing liquidation or bankruptcy process or whose resolution/repayment plan has been submitted to the adjudicating authority for approval - 0.3 *Factor c is applicable only in cases where the actual profit and/or loss avoided (approx.) is determinable and disgorgement with interest is not ordered. While calculating the period, the fractions may be ignored. V = VALUE FOR THE HIGHEST % OF VOLUME TRADED IN ANY TRADING PERIOD DURING THE ENTIRE PERIOD OF VIOLATION In case of more than one scrip, the scrip with the highest volume traded is to be considered TABLE IVA- SPECIAL BASE VALUES, IN ADDITION TO GENERAL BASE VALUES % VOLUME TRADED (ILLIQUID SCRIP) V % VOLUME TRADED (LIQUID SCRIP) Upto 50% 0.1 Upto 2% 50 -60% 0.15 2-5% 60-75% 0.2 5- 10% 75% or more 0.25 10% or more P = VALUE FOR HIGHEST % OF PRICE CHANGE DURING THE ENTIRE PERIOD OF VIOLATION In case of more than one scrip, the scrip with the highest price change is to be considered TABLE IVB- SPECIAL BASE VALUES, IN ADDITION TO GENERAL BASE VALUES % PRICE CHANGE (ILLIQUID SCRIP) P % PRICE CHANGE (LIQUID SCRIP) Upto 50% 0.1 Upto 5% 50-100% 0.15 5-10% 100-200% 0.2 10-20% 200% or more 0.25 20% or more Q = VALUE FOR HIGHEST % OF PRICE CHANGE, DURING THE PERIOD OF DEFAULT FOR F O LEVERAGED PRODUCTS In case of more than one product, the contract with the highest price change is to be considered TABLE IVC- SPECIAL BASE VALUES, IN ADDITION TO GENERAL BASE VALUES % PRICE CHANGE Q Upto 0.5% 0.1 0.5-1% 0.15 1-5% 0.2 5% or more 0.25 TABLE V- SPECIAL BASE VALUES, IN ADDITION TO GENERAL BASE VALUES FOR DISCLOSURE AND OPEN OFFER DEFAULTS NATURE OF VIOLATION BASE VALUE a. In Non-disclosure (including incorrect or incomplete disclosure) charge under any regulation relating to takeover, insider trading or issue or listing of securities in combination with any other charge 0.20 b. In Non-Disclosure (including incorrect or incomplete disclosure) matters: Applicant has made related disclosure under any other regulation or is a body corporate with paid-up equity share capital (including reserves) below Rupees Ten crores (not applicable to companies which are exclusively holding companies) - 0.5 c. In open offer violations: acquirer not in control of target company, prior to triggering the takeover 0.25 VI. In cases of multiple applicants where joint and several liabilities exists, a single IA may be based on the factors and the weightages applicable to the default in general, as the IC or HPAC or Panel of WTMs may deem fit and any other factor may also be considered while imposing any limit in respect of amounts that may be required from a particular applicant, in respect of the IA calculated for multiple applicants. CHAPTER VI APPLICABLE BASE AMOUNT APPLICABLE BA = 'The illegal profits + loss caused to investors' [quantified as per the guidelines, if any, issued by the Board] Or The BA as per the Tables in this Chapter, whichever is higher. GENERAL GUIDELINE: In case the applicant is charged for non-disclosure under Regulations relating to Open Offer [SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, and any subsequent similar regulations] and PIT [Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, SEBI (Prohibition of Insider Trading) Regulations, 2015, and any subsequent similar regulations], the highest of the Base Amount arrived at for such charges shall be reduced by 75%. TABLE-VI BA FOR ALLEGED DEFAULT RELATING TO OPEN OFFER NATURE OF VIOLATION BA FOR ACQUIRER AND PERSONS ACTING IN CONCERT DELAYED OPEN OFFER ₹ 25 LAKH OR 0.25% OF THE OPEN OFFER SIZE, I.E. MAX NUMBER OF SHARES FOR WHICH OPEN OFFER MUST BE GIVEN X APPLICABLE OPEN OFFER PRICE, WHICHEVER IS HIGHER DELAYED OPEN OFFER (AFTER DIRECTION FROM THE BOARD) ₹ 50 LAKH OR 0.5% OF THE OPEN OFFER SIZE, WHICHEVER IS HIGHER 2 [WHERE THE MAKING OF THE OPEN OFFER IS INFRUCTUOUS INFRUCTUOUS BY AN ACT OF THE ACQUIRER INFRUCTUOUS BY AN ACT OF THE COMPANY OR BY ANY OTHER REASON RUPEES 1 CRORE OR OPEN OFFER SIZE, WHICHEVER IS HIGHER ANY AMOUNT BETWEEN RUPEES 10 LAKHS TO RUPEES 35 LAKHS; WITH A MULTIPLIER BETWEEN 1 TO 3 AS DECIDED BY THE IC OR HPAC OR THE PANEL OF WTMS ] 11 [ TABLE-VII BASE AMOUNT FOR ALLEGED DEFAULT RELATING TO DISCLOSURES UNDER SECURITIES AND EXCHANGE BOARD OF INDIA ( SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS ) REGULATIONS - 1997 / 2011 PERCENTAGE OF SHAREHOLDING OR VOTING RIGHTS ACQUIRED OR DISPOSED BUT NOT DISCLOSED OR PERCENTAGE OF ENCUMBERED SHARES BUT NOT DISCLOSED, ETC. BASE AMOUNT FOR VIOLATION OF REGULATION 7 OF 1997 REGULATIONS OR REGULATION 29 OF 2011 REGULATIONS (I) REGULATION 8 OF 1997 REGULATIONS OR REGULATION 30 OF 2011 REGULATIONS (II) REGULATION 8A OF 1997 REGULATIONS OR REGULATION 31 OF 2011 REGULATIONS (III) Less than 2% ₹ 2 lakh + ₹ 5,000/- For every three months delay # or part thereof 2% to less than 5% ₹ 4 lakh + ₹ 10,000/- For every three months delay or part thereof 5% to less than 10% ₹ 7 lakh + ₹ 15,000/- For every three months delay or part thereof 10 % to less than 15% ₹ 9 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 20,000/- For every three months delay or part thereof 15% and above ₹ 10 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 25,000/- For every three months delay or part thereof Notes to Table VII: 1. Table VII is not applicable in cases where the disclosure related violation is in combination with Fraudulent and Unfair Trade Practices or Insider Trading. Explanation: Dealing while in possession of material financial or shareholding information may be treated as Insider Trading. 2. The BA for violation at (II) shall only be as per the lowest slab, irrespective of change in shareholding over the reporting period. In case of violations related to disclosures that are required to be made annually the amount for delay for every three months or part thereof shall be computed only for the first disclosure violation. In case the noticee complies with the annual reporting requirements for a few years, such compliance will not result in a higher amount than would have otherwise be calculated for continuous violations. 3. The period of delay is to be calculated from the last day, when the disclosure ought to have been made, as required by the regulations. 4. If the disclosure for any violation is made after a period of more than 4 Quarters, then the value for 4 Quarters would be taken as maximum value for that specific disclosure violation. 5. If there are multiple transaction attracting disclosure requirement in a Quarter, then the value of highest change and max. delay may be considered for arriving at the base amount irrespective of count of violations. ] 12 [ Table -VIII BASE AMOUNT ALLEGED DEFAULT RELATING TO TRANSACTION SPECIFIC DISCLOSURES UNDER REGULATIONS 13(3), 13(4), 13(4A) AND 13 (6) OF 1992 PIT REGULATIONS [INCLUDES CORRESPONDING TRANSACTION SPECIFIC DISCLOSURES UNDER 2015 PIT REGULATIONS] PERCENTAGE OF SHAREHOLDING OR VOTING RIGHTS ACQUIRED OR DISPOSED BUT NOT DISCLOSED OR PERCENTAGE OF ENCUMBERED SHARES BUT NOT DISCLOSED, ETC. BASE AMOUNT Less than 2% ₹ 2 lakh + ₹ 7,500/- For every three months delay or part thereof 2% to less than 5% ₹ 4 lakh + ₹ 12,500/- For every three months delay or part thereof 5% to less than 10% ₹ 7 lakh + ₹ 17,500/- For every three months delay or part thereof 10 % to less than 15% ₹ 9 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 22,500/- For every three months delay or part thereof 15% and above ₹ 10 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 25,000/- For every three months delay or part thereof Notes to Table VIII: 1. In cases of disclosure related violations by connected persons or by key managerial persons, the BA may be increased by 25%. 2. Table VIII is not applicable in cases where the disclosure related violation is in combination with Fraudulent and Unfair Trade Practices or Insider Trading. Explanation: Dealing while in possession of material financial or shareholding information may be treated as Insider Trading. 3. If the disclosure for any violation is made after a period of 4 Quarters, then the value for 4 Quarters would be the maximum value for that specific disclosure violation. 4. If there are multiple transactions attracting disclosure requirements in a Quarter, then the value of highest change and maximum delay may be considered for arriving at the Base Amount irrespective of the count of violations. ] TABLE IX BA - DISCLOSURES RELATED VIOLATIONS NOT COVERED IN TABLES VII AND VIII NATURE OF ALLEGED DEFAULT BASE AMOUNT TYPE OF DISCLOSURE RELATED VIOLATION PIT REGULATIONS Periodical and other disclosures ₹ 5 lakh + ₹ 5,000/- for every three months delay or part thereof, if applicable OPEN OFFER REGULATIONS Reporting requirements or disclosures for which exemptions are available, except cases of non-compliance of a condition precedent for availing exemption would result in triggering of an open offer obligation (The Regulation 6 of 1997 Regulations are dated and no amount may be imposed for its violation, except in case of standalone violations of Regulation 6 the minimum SA may be applicable) ₹ 5 lakh + ₹ 10,000/- for every three months delay or part thereof, if applicable VIOLATIONS UNDER REGULATIONS RELATED TO 13 [ FOREIGN PORTFOLIO INVESTORS ] Failure to provide information ₹ 20 lakh per default Intimation of material changes ₹ 10.0 lakh per default RESIDUARY Code of conduct reporting requirements or Disclosures on appointment of director or Any other disclosure related violations that are not detailed in this Chapter, if deemed appropriate ₹ 5 lakh + ₹ 10,000/- for every three months delay or part thereof, if applicable Notes to Table IX: 1. In cases of disclosure related violations by key managerial persons, the Benchmark Amount may be increased by 25%. 2. Table IX is not applicable in cases where the disclosure related violation is in combination with FUTP or IT. Explanation: Dealing while in possession of material financial or shareholding information may be treated as IT. 14 [ Table -X RESIDUARY BASE AMOUNT, FOR EACH UNIT OF ALLEGED DEFAULT FOR EACH APPLICANT OR ON JOINT LIABILITY BASIS ( AS PER THE SUM OF APPLICABLE AMOUNTS IN CASE OF JOINT APPLICANTS ) BASE AMOUNT WHERE : NAME LENDERS# ( I ) BODY CORPORATES INDIVIDUALS ( WHEN NOT IN I, III - V ) ( II ) INTERMEDIARY INCLUDING PRINCIPAL OFFICERS ( III ) MARKET INFRASTRUCTURE INSTITUTIONS INCLUDING PRINCIPAL OFFICERS ( IV ) FUND RELATED DEFAULTS I NCLUDING PRINCIPAL OFFICERS ( V ) DEFAULTS RELATE RUPEES 10 RUPEES 40 RUPEES 20 ₹ 2 CRORE RUPEES 40 TO FUTP OR IT, FALSE/ MISLEADING/ INCORRECT/ INCOMPLETE DISCLOSURES IN OFFER DOCUMENTS, OR FAILURE BY MARKET INFRASTRUCTURE INSTITUTIONS TO CONDUCT BUSINESS IN THE REQUIRED MANNER, (M) LAKHS LAKHS LAKHS LAKHS VIOLATION INVOLVED AT (M) IS APPLICABLE AND, - SUCH VIOLATION DIRECTLY OR INDIRECTLY (I) RESULTED IN SUBSTANTIAL LOSSES TO OTHER PERSONS, OR (II) CREATED SUBSTANTIAL LOSSES OR A SIGNIFICANT RISK OF LOSSES TO OTHER PERSONS OR (III) AFFECTED THE INTEGRITY OF THE SECURITIES MARKETS (N)## ₹ 20 LAKHS ₹ 1 CRORE RUPEES 30 LAKHS ₹ 4 CRORES ₹ 75 LAKHS DELAY IN REDRESSING INVESTOR GRIEVANCES (O) - RUPEES 3 LAKHS ₹ 5 LAKHS ₹ 7 LAKHS ₹ 10 LAKHS RESIDUARY (P) RUPEES 3 LAKHS ₹ 10 LAKHS ₹ 10 LAKHS ₹ 1 CRORE ₹ 15 LAKHS #Name Lenders include individual applicants who submit to the satisfaction of the IC or HPAC or Panel of WTMs that, without knowledge of the illegal activity, he/she was involved in the violation to the extent of permitting/lending the use of his/her securities account or name or facility to the key operator or core entities or intermediary or securities market infrastructure institution involved in such activity. In addition, name lenders will also include individuals who are identified as such either in the investigation report or in the show cause notice or in the order of the Adjudicating Officer/SEBI/Court/Tribunal. While arriving at the settlement terms, the IC or HPAC or Panel of WTMs may take into consideration any relevant factor as may be submitted by the applicant including 16 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III-SEC.4] the annual income of the applicant, the past and present trading pattern, including the frequency and quantum of trades. ##Serious violations may also result in additional terms such as disgorgement of management fee or any other terms as may be decided by the IC, HPAC or the Panel of WTMs. Note to Table X: 1. In case of applicability of more than one BA, the highest is to be considered. 2. In this Schedule, Principal Officer means a person that may be covered under Section 27 of the Act as amended by the Finance Act, 2018. 3. Fund means an Alternative Investment Fund (AIF), Mutual Fund (MF), Collective Investment Scheme (CIS) and any other pooling arrangement required to be registered with the Board. 4. Body Corporate in (II) in this Table includes, any applicant not covered in (I) and (III) to (V). ] CHAPTER VII REPETITIVE NATURE OF DEFAULT I. The counts of defaults may be selected using one or more or a combination of the methods indicated in this Chapter. Explanation. - Different methods may be used in respect of different persons in the same cause of action as may be required for arriving at a reasonable IA. II. In general, the unit of alleged default may be selected from either of, or a combination of, the following, - i. the (approx.) number of purchase or sale transaction, ii. the (approx.) number of individual deceptions attempted, iii. the (approx.) number of investors involved, or iv. Course of conduct standard -whereby each counts amounts to a complete violation. Discretion may be used to apply a different standard that is less prejudicial to a person after taking into account the interest of the investors in securities: Provided that, where a large number of counts of a default are noted, for arriving at a reasonable IA a less prejudicial standard of selecting the unit of default may be applied. Explanation. - In respect of a default relating to a report or statement, - i. each person to whom a misleading report was sent or statement made may involve a separate act ; ii. each distinct misleading report or statement made may be a separate act ; iii. each distinct misleading statement within a report may be a separate act ; iv. the course of conduct standard in respect of all or any such reports or statements; or v. a combination of i, ii, iii and iv above. III. Course of Conduct standard: Depending on the facts and circumstances of a case, for the purpose of arriving at a reasonable IA, course of conduct standard in which multiple counts of a violation are aggregated and counted as a single violation for purposes of calculating IA may be applied. Explanation 1. - It may be reasonable to aggregate multiple counts of a default if, - (a) the conduct did not involve manipulative, fraudulent or deceptive intent or insider trading, except where the recommended IA would otherwise be extremely disproportionate to the conduct; Explanation. disproportionate and reasonable refer to the appropriateness vis- -vis the deterrence sought to be achieved and not appropriateness vis- -vis the illegal profit made by the applicant or loss caused to investors. (b) the conduct did not result in substantial injury to the rights of public investors, or if restitution was made in such cases; and (c) the violations resulted from a systemic problem or cause that has been corrected. Explanation 2. Depending on the facts and circumstances, the units of violation may be based on how long the violations continued, however no uniformity of the period of time (daily, weekly, fortnightly, monthly, yearly) is required. The multiple counts of violation acts may be combined into one or more than one course of conduct. ***************** ************ NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/24 dated 22-07-2020 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/24 dated 22-07-2020 before it was read as WHERE THE MAKING OF THE OPEN OFFER IS INFRUCTUOUS I.E. WHEN COMPANY HAS BEEN DELISTED, WHEN OPEN OFFER IS NOT BENEFICIAL TO SHAREHOLDERS, ETC INFRUCTUOUS BY AN ACT OF THE COMPANY REQUIRED TO MAKE AN OPEN OFFER INFRUCTUOUS DUE TO OTHER REASON, INCLUDING WHEN OPEN OFFER IS NOT BENEFICIAL TO SHAREHOLDERS ₹ 1 CRORE OR OPEN OFFER SIZE, WHICHEVER IS HIGHER ANY AMOUNT BETWEEN THE MINIMUM PENALTY TO PROBABLE COST OF OPEN OFFER AS RECOMMENDED BY THE CORPORATE FINANCE DEPARTMENT OF THE BOARD 3. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/24 dated 22-07-2020 before it was read as TABLE-X RESIDUARY BA, FOR EACH UNIT OF ALLEGED DEFAULT FOR EACH APPLICANT OR ON JOINT LIABILITY BASIS (AS PER THE SUM OF APPLICABLE AMOUNTS IN CASE OF JOINT APPLICANTS) INDIVIDIUAL (PRINCIPAL OFFICERS NOT INCLUDED) (I) BODY CORPORATE FIRM (AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE BODY CORPORATE /FIRM) (II) PRINCIPAL OFFICERS COMPLIANCE OFFICERS [WHEN NOT IN II, IV-VII] (III) SECTION 15B AND 15F OF SEBI ACT SIMILAR DEFAULTS (AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INTERMEDIARY) (IV) FAILURE IN REDRESSING INVESTOR GRIEVANCES (AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INTERMEDIARY/ ISSUER) (V) (FOR DELAY REDUCE TO 1/4) MARKET INFRASTRUCTURE INSTITUTIONS (AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INSTITUTION) (VI) FUND RELATED DEFAULTS (AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE FUND) (VII) BA WHERE: DEFAULT RELATE TO FUTP OR IT, FALSE/ MISLEADING/ INCORRECT/INCOMPLETE DISCLOSURES IN OFFER DOCUMENTS, FAILURE BY MARKET INFRASTRUCTURE INSTITUTIONS TO CONDUCT BUSINESS IN THE REQUIRED MANNER, A RECKLESS VIOLATION, OR A DISGORGEMENT/REFUND IN EXCESS OF ₹ 1 CRORE (M) ₹ 15 LAKHS ₹ 1 CRORES RUPEES 45 LAKHS ₹ 15 LAKHS ₹ 30 LAKHS ₹ 5 CRORES ₹ 33 LAKHS OR 0.01% OF THE AVERAGE ASSET UNDER MANAGEMENT, AT TIME OF VIOLATION OR 0.5% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER BENCHMARK WHERE VIOLATION INVOLVED AT (M) AND, - SUCH VIOLATION DIRECTLY OR INDIRECTLY (I) RESULTED IN SUBSTANTIAL LOSSES TO OTHER PERSONS, (II) CREATED A SIGNIFICANT RISK OF SUBSTANTIAL LOSSES TO OTHER PERSONS, OR (III) AFFECTED THE INTEGRITY OF THE SECURITIES MARKETS (N) ₹ 60 LAKHS ₹ 3 CRORES ₹ 2 CRORES ₹ 60 LAKHS RUPEES 80 LAKHS ₹ 10 CRORES ₹ 60 LAKHS OR 0.05% OF THE AVERAGE ASSET UNDER MANAGEMENT, AT TIME OF VIOLATION OR 0.075% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER RESIDUARY (O) ₹ 3 LAKHS ₹ 15 LAKHS ₹ 10 LAKHS ₹ 3 LAKHS ₹ 6 LAKHS ₹ 3 CRORES ₹ 15 LAKHS OR 0.001% OF THE AVERAGE ASSET UNDER MANAGEMENT, AT TIME OF VIOLATION OR 0.01% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER 4. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as : 5. Omitted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as Provided that in case of individual applicants who submit to the satisfaction of the IC or HPAC or Panel of WTMs that, without knowledge of the illegal activity, they had lent the use of their securities account to the key operator or intermediary or securities market infrastructure institution involved in such activity, the SA may not exceed the minimum penalty for that violation under securities laws. 6. Omitted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as 5. Notwithstanding anything in this Schedule, - i. where a compounding application has been filed in respect of an offence under securities laws for non-payment of penalty, the proposal agreeing to the composition of the offence may be made to the court in lieu of such penalty and interest as deemed appropriate along with legal charges as determined by the Board; ii. where a compounding application has been filed in respect of an offence under securities laws other than for non-payment of penalty, the proposal agreeing to the composition of the offence may be made to the court in lieu of terms as may be approved by the Panel of Whole Time Members; and iii. where a compounding application is filed after framing of the charges by the court, the proposal agreeing to the composition may be made after increasing the amount calculated under this Schedule by atleast twenty-five per-cent along with legal charges and along with any other terms as may be approved by the Panel of Whole Time Members. 7. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as TABLE- I PCF STAGE OF THE PROCEEDING(S) WHEN THE SETTLEMENT APPLICATION IS MADE VALUE OF PCF a. Voluntary or for seeking settlement with confidentiality 0.65 b. Pre- issue of the notice to show cause (including applications filed on receipt of the settlement notice/summary settlement notice) [Or Compounding application filed pre-summoning] 0.75 c. Post-issue of the first notice to show cause pertaining to any pending proceeding in the same cause of action (including applications filed after period provided in settlement notice) [Or Compounding application filed before the framing of charge] 0.85 d. Proceeding pending after the submission of the report by the Designated Authority [Or Compounding application filed after framing of charge] 0.9 e. Proceedings pending after passing of a final order imposing penalty or issuing civil and administrative directions, as the case may be 1.10 f. Proceedings pending after the passing of the order by the Securities Appellate Tribunal or Court 1.20 8. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as applied once for all or any of them 9. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as applied once for all or any of them 10. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as applied once for all or any of them 11. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as TABLE-VII BA FOR ALLEGED DEFAULT RELATING TO DISCLOSURES UNDER SECURITIES EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS -1997/2011 PERCENTAGE OF SHAREHOLDING OR VOTING RIGHTS ACQUIRED OR DISPOSED BUT NOT DISCLOSED OR PERCENTAGE OF ENCUMBERED SHARES BUT NOT DISCLOSED, ETC. BA FOR VIOLATION OF REGULATION 7 OF 1997 REGULATIONS OR REGULATION 29 OF 2011 REGULATIONS (I) REGULATION 8 OF 1997 REGULATIONS OR REGULATION 30 OF 2011 REGULATIONS (II) REGULATION 8A OF 1997 REGULATIONS OR REGULATION 31 OF 2011 REGULATIONS (III) Less than 2% ₹ 2 lakh + ₹ 5,000/- For every three months delay # or part thereof 2% to less than 5% ₹ 5 lakh + ₹ 10,000/- For every three months delay or part thereof 5% to less than 10% ₹ 10 lakh + ₹ 15,000/- For every three months delay or part thereof 10 % to less than 15% ₹ 15 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 20,000/- For every three months delay or part thereof 15% and above ₹ 20 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 25,000/- For every three months delay or part thereof Notes to Table VII: 1. Table VII is not applicable in cases where the disclosure related violation is in combination with FUTP or IT. Explanation: Dealing while in possession of material financial or shareholding information may be treated as IT. 2. The BA for violation at (II) shall only be as per the lowest slab, irrespective of change in shareholding over the reporting period. In case of violations related to disclosures that are required to be made annually the amount for delay for every three months or part thereof shall be computed only for the first disclosure violation. In case the noticee complies with the annual reporting requirements for a few years, such compliance will not result in a higher amount than would have otherwise be calculated for continuous violations. 3. The period of delay is to be calculated from the last day, when the disclosure ought to have been made, as required by the regulations. 12. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as TABLE VIII BA ALLEGED DEFAULT RELATING TO TRANSACTION SPECIFIC DISCLOSURES UNDER REGULATIONS 13(3), 13(4), 13(4A) AND CORRESPONDING 13 (6) OF 1992 PIT REGULATIONS [INCLUDES, CORRESPONDING TRANSACTION SPECIFIC DISCLOSURES UNDER REGULATIONS OF 2015 PIT REGULATIONS] PERCENTAGE OF SHAREHOLDING OR VOTING RIGHTS ACQUIRED OR DISPOSED BUT NOT DISCLOSED OR PERCENTAGE OF ENCUMBERED SHARES BUT NOT DISCLOSED, ETC. BA Less than 2% ₹ 2.5 lakh + ₹ 7,500/- For every three months delay or part thereof 2% to less than 5% ₹ 6 lakh + ₹ 12,500/- For every three months delay or part thereof 5% to less than 10% ₹ 12 lakh + ₹ 17,500/- For every three months delay or part thereof 10 % to less than 15% ₹ 18 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 22,500/- For every three months delay or part thereof 15% and above ₹ 25 lakh + 0.1 % of the value of the holding not disclosed, etc. + ₹ 25,000/- For every three months delay or part thereof Notes to Table VIII: 1. In cases of disclosure related violations by connected persons or by key managerial persons, the BA may be increased by 25%. 2. Table VIII is not applicable in cases where the disclosure related violation is in combination with FUTP or IT. Explanation: Dealing while in possession of material financial or shareholding information may be treated as IT. 13. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as FOREIGN INSTITUTIONAL INVESTORS 14. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/62 dated 14-01-2022 before it was read as 3 [TABLE-X RESIDUARY BA, FOR EACH UNIT OF ALLEGED DEFAULT FOR EACH APPLICANT OR ON JOINT LIABILITY BASIS (AS PER THE SUM OF APPLICABLE AMOUNTS IN CASE OF JOINT APPLICANTS) INDIVIDUAL (PROMOTERS AND PRINCIPAL OFFICERS NOT INCLUDED) (I) BODY CORPORATE FIRM (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE BODY CORPORATE /FIRM) (II) PROMOTE, PRINCIPAL OFFICERS COMPLIANCE OFFICERS [WHEN NOT IN II, IV-VII] (III) SECTION 15B AND 15F OF SEBI ACT SIMILAR DEFAULTS (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INTERMEDIAR Y) (IV) FAILURE IN REDRESSING INVESTOR GRIEVANCES (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INTERMEDIA RY/ ISSUER) (V) (FOR DELAY REDUCE TO 1/4) MARKET INFRASTRUCTUR E INSTITUTIONS (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE INSTITUTION) (VI) FUND RELATED DEFAULTS (INCLUDING PROMOTERS AND PRINCIPAL OFFICERS IN CASES RELATING TO JOINT LIABILITY WITH THE FUND) (VII) BA WHERE: DEFAULT RELATES TO FUTP OR IT, FALSE/ MISLEADING/ INCORRECT/INCOMPL ETE DISCLOSURES IN OFFER DOCUMENTS, FAILURE BY MARKET INFRASTRUCTURE INSTITUTIONS TO CONDUCT BUSINESS IN THE REQUIRED MANNER, A RECKLESS VIOLATION, OR A DISGORGEMENT/REF UND IN EXCESS OF RUPEES 1 CRORE (M) RUPEES 15 LAKHS RUPEES 1 CRORES RUPEES 45 LAKHS RUPEES 15 LAKHS RUPEES 30 LAKHS RUPEES 5 CRORES RUPEES 33 LAKHS OR 0.01% OF THE AVERAGE ASSET UNDER MANAGEMENT, AT TIME OF VIOLATION OR 0.5% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER BENCHMARK WHERE VIOLATION INVOLVED AT (M) AND, - SUCH VIOLATION DIRECTLY OR INDIRECTLY (I) RESULTED IN SUBSTANTIAL LOSSES TO OTHER PERSONS, (II) CREATED A SIGNIFICANT RISK OF SUBSTANTIAL LOSSES TO OTHER PERSONS, OR (III) AFFECTED THE INTEGRITY OF THE SECURITIES MARKETS (N) RUPEES 60 LAKHS RUPEES 3 CRORES RUPEES 2 CRORES RUPEES 60 LAKHS RUPEES 80 LAKHS RUPEES 10 CRORES RUPEES 60 LAKHS OR 0.05% OF THE AVERAGE ASSET UNDER MANAGEMENT, AT TIME OF VIOLATION OR 0.75% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER RESIDUARY (O) RUPEES 3 LAKHS RUPEES 15 LAKHS RUPEES 10 LAKHS RUPEES 3 LAKHS RUPEES 6 LAKHS RUPEES 3 CRORES RUPEES 15 LAKHS OR 0.001% OF THE AVERAGE ASSET UNDER MANAGEMENT, AT TIME OF VIOLATION OR 0.05% OF THE AVERAGE NET WORTH, AT TIME OF VIOLATION, WHICHEVER IS HIGHER ] Note to Table X: 1. In case of applicability of more than one BA, the highest is to be considered. 2. In this Schedule, Principal Officer means a person that may be covered under Section 27 of the SEBI Act, as amended by the Finance Act, 2018. 3. Fund means an AIF, MF, CIS, and any other pooling arrangement required to be registered with the Board. 4. Body corporate in (II) of this Table includes, any applicant not covered in (I) and (III) to (VII). WHICHEVER IS HIGHER