The Securities and Exchange Board of India ( SEBI ) has notified significant amendments to Regulation 30A of the SEBI (Intermediaries) Regulations, 2008, introducing a revised framework for summary proceedings. These amendments, officially titled the SEBI (Intermediaries) (Second Amendment) Regulations, 2024, came into effect upon their publication in the Official Gazette.
The revised Regulation 30A outlines specific conditions under which summary proceedings may be initiated, including cases where intermediaries such as stock brokers, clearing members, or depository participants are expelled or agreements with depositories are terminated. It also applies to entities that fail to pay required fees, submit periodic reports, or comply with regulatory provisions, among other violations.
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The process begins with the issuance of a notice detailing the grounds for the proceedings and the alleged violations. Noticees have 21 days to submit their responses along with supporting evidence, with an additional 15 days allowed at the discretion of the competent authority. Notably, no further extensions or opportunities for personal hearings will be granted, underscoring the streamlined nature of these proceedings.
The competent authority must pass an appropriate order, including suspension or cancellation of registration, within 21 days after the submission deadline. Such orders may also impose conditions to safeguard investor interests, ensure record maintenance, and facilitate continuity of service. Upon cancellation of registration, the entity must cease all related activities, transfer responsibilities to valid registrants, and address any liabilities or investor grievances.
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