Tighter regulatory framework makes consent orders a rarity
According to data available with the Sebi, 2012 has seen only 26 consent orders till date. This is in sharp contrast to 2010 when on an average one consent order was passed every second day with the total number of orders pegged at 187. In 2011, there were 100 cases, which were settled through the consent route.
Lawyers specialising in the securities market say that the number of consent applications have dropped after the new norms were announced in May. They say that the new norms have kept most serious offences outside the ambit.
“The drop is on account of the decline in inflow of consent applications,” says MS Sahoo, independent lawyer and a former whole-time Sebi member. “During the initial years, people sought settlement of accumulated enforcement actions while they now seek settlement of mostly fresh enforcement actions,” he added.
The consent order mechanism, introduced by Sebi in 2007, refers to a practice of negotiations while settling civil or administrative matters against wrongdoers. Based on the kind of offence, the regulator either imposes a monetary penalty or suspends/cancels the registration.
Early this year, Sebi chief UK Sinha had said that there was a need to review the entire consent order framework so that serious capital market offences are
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