Sebi Plans to Allow Settlement for Fund Diversion Cases
· Business · Economic Times
The Securities and Exchange Board of India is considering a policy shift to allow companies and individuals accused of siphoning funds to settle their cases. Currently, such cases are ineligible for settlement due to concerns over investor harm and market integrity. Under the proposed framework, offenders would be required to return diverted money with interest and provide full disclosures to investors. The regulator's board is scheduled to review this proposal along with a new mutual fund category for portfolio management services on September 24. Sebi reported that settlement and compounding charges reached ₹815 crore in FY25, marking an eightfold increase from the previous fiscal year.
Why it matters
This change could provide a faster path for restitution to investors and reduce the burden of prolonged litigation for both the regulator and the accused parties.
Read the original report — Economic Times
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