SEBI extends one-time settlement scheme

Market regulator, Securities and Exchange Board of India has extended the SEBI Settlement Scheme, 2022 till January 21 next year.

The scheme, which commenced on August 22, was to end on November 21.

The scheme provides a one-time settlement opportunity to those entities that have executed trade reversals in the illiquid stock options segment of BSE during the period from April 1, 2014 to September 30, 2015, and against whom adjudication proceedings have been initiated and are pending before any forum or authority.

A “reversal trade” is where a person buys a particular stock and sells it back to the same person.

It was observed that during the last few days, a large number of entities have shown interest in availing the scheme. Considering the interest of entities in availing the scheme, the competent authority has extended the period of the scheme till January 21, 2023.

More than 7,000 entities have so far paid the settlement amount, sources close to the development said. SEBI observed that over 14,000 entities had indulged in “reversal trades” in options that were illiquid.

Its investigation found that entities entered into “reversal trades” with each other on the same day at different prices, thereby, shifting gains from one to the other.

SEBI ruled these trades as non-genuine and misuse of the stock exchange platform. It initiated adjudication proceedings against these entities.