Reuters: Regulatory News: Indian regulator toughens stance on serious cases

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Indian regulator toughens stance on serious cases May 25th 2012, 17:21 NEW DELHI | Fri May 25, 2012 1:21pm EDT NEW DELHI May 25 (Reuters) - India's capital market regulator said it would not settle serious cases, such as insider trading and unfair trade practices, through the use of consent orders - a mechanism that avoids lengthy legal proceedings. The Securities and Exchange Board of India (SEBI) had faced accusations that it had used consent orders inappropriately in some serious cases. "Certain defaults including insider trading, front running, failure to make an open offer, redress investor grievances and respond to the summons issued by SEBI are excluded from the consent process," SEBI said in a statement issued on Friday. "The defaults falling in the category of fraudulent and unfair trade practices, which in the opinion of SEBI are very serious and/or have caused substantial losses to the investors, shall also not be consented," it added. The watchdog also said it would not consider an application for a consent order without completing investigations. In one example of the use of a consent order, in June last year, Indian brokerage Reliance Securities, a unit of Reliance Capital, agreed to not accept new clients for 45 days. The company had been under investigation for violations between 2007 and 2009, that included the absence of legal documents for office space, excessive tax collection and frequent disruptions in its trading platform. Link this Share this Digg this Email Reprints

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