The Securities and Exchange Board of India vide notification dated 14th January, 2022 the Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2022. The amendment clarifies that Name Lenders include individual applicants who submit to the satisfaction of the IC or HPAC or Panel of WTMs that, without knowledge of the illegal activity, he/she was involved in the violation to the extent of permitting/lending the use of his/her securities account or name or facility to the key operator or core entities or intermediary or securities market infrastructure institution involved in such activity. In addition, name lenders will also include individuals who are identified as such either in the investigation report or in the show cause notice or in the order of the Adjudicating Officer/SEBI/Court/Tribunal.
While arriving at the settlement terms, the IC or HPAC or Panel of WTMs may take into consideration any relevant factor as may be submitted by the applicant including the annual income of the applicant, the past and present trading pattern, including the frequency and quantum of trades. Serious violations may also result in additional terms such as disgorgement of management fee or any other terms as may be decided by the IC, HPAC or the Panel of WTMs.
