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TMI BlogGuidelines for Consent Orders and for considering requests for composition of offencesX X X X Extracts X X X X X X X X Extracts X X X X ..... imposition of monetry penalty under the respective statutes and action pursued or defended in a court of law/tribunal. Criminal action involves initiating prosecution proceedings against violators by filing complaint before a criminal court. 2. The Parliament of India has recognised the powers of SEBI to pass consent orders under the SEBI Act and the Depositories Act. This will of the Parliament is apparent from Section 15T of the SEBI Act 1992 and section 23 A of the Depositories Act. Further, section 24A of the SEBI Act, section 23N of the SCRA and section 22A of the Depositories Act permit composition of offences. 3. Consent orders cannot be construed as waiver of statutory powers by the Board. The Board always has the right to procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factors as set out below at para 11. 7. Commencement and scope of consent Consent Order may be passed at any stage after probable cause of violation has been found. However, in the event of a serious and intentional violation, the process should not be completed till the fact finding process is completed whether by way of investigation or otherwise. Compounding of Offence can take place after filing criminal complaint by SEBI. Where a criminal complaint has not yet been filed but is envisaged, the process for consent orders will be followed. 8 Procedure for consent orders where Adjudication Proceedings are pending a. If the party against whom an adjudication proceeding is pending proposes passing of a consent order, the proposal may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith requisite waivers for consent. All communications in this regard should be addressed to the Prosecution Division, Enforcement Department of SEBI at Mumbai, which would forward the same to the high powered Committee. (III) The Committee will consider the proposal of consent, requisite waivers by the party, the facts and circumstances of the case, material available on record and take into account the factors and guidance as set out below at para 11. Where the Committee finds the terms for passing a consent order inadequate, it may ask the party to revise the consent terms. If the Committee agrees with the proposal, suitable consent terms shall be recommended to a panel of two Whole Time Members, who may pass a suitable order in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of claim of investors regarding payment of money due to them or delivery of securities to them. xiii. Compliance of the civil enforcement action by the accused. xiv. Party has undergone any other regulatory enforcement action for the same violation. xv. Any other factors necessary in the facts and circumstances of the case. 12. Waivers As a condition for consent, the party shall furnish a written waiver from taking any legal proceedings against SEBI concerning any of the issues covered by the consent order. (I) The party shall waive: 1. all hearings pursuant to the statutory provisions under which the proceeding is to be or has been instituted; 2. the filing of proposed findings of fact and conclusions of law; 3. proceedings b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or claims are being reserved. 14. If the Committee believes that the proposal of consent is not commensurate with the violation or the factors mentioned above are not satisfied or the waivers are not given, it may decline to consider the proposal of the party. In such an event, the Board and the party will both be free to resort to legal recourse as may be available to them under the law. 15 Depending upon the facts and circumstances of the case, gravity of violation/ offence, interest of investors and the securities market and deterrent effect, settlement/ compounding charges have to be paid by the party including legal expenses incurred by SEBI. The Committee will recommend the charges payable by the party for mitigating the violation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned that the party may, if it so desires, propose for suitable order for agreed penalty/ action by consent along with requisite waivers and undertakings. 19.Composition of Offences The above procedure and factors and waivers shall be applied for considering the proposals of composition of offences under the SEBI Act, SCRA and the Depositories Act, 1996, wherever applicable. Any party who wishes to compound an offence shall file an appropriate application before the court where complaint is pending with a copy addressed to the Prosecution Division, Enforcement Department of SEBI's Mumbai office (address is given above) which will forward the application/ request to be placed before the High Powered Committee. The terms of compounding as r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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