Sebi Extends Settlement Scheme for Illiquid Stock Options

New Delhi, May 8 (PTI) Capital markets regulator Sebi on Wednesday extended the settlement scheme period till June 10 for entities involved in reversal trades in the stock options segment on BSE in 2014 and 2015.

The settlement scheme commenced on March 11 and was scheduled to conclude on May 10.

"It has been observed that during the last few days, a large number of entities have shown interest in availing the scheme. Considering the interest of entities in availing the scheme, the competent authority has extended the period of the scheme till June 10, 2024," Sebi said in a statement.

The regulator, in March, introduced the ISO Settlement Scheme 2024, which provides a settlement opportunity to those entities that have executed trade reversals in the stock options segment of BSE during the period April 1, 2014, to September 30, 2015, and against whom adjudication proceedings have been initiated and are pending before any forum or authority.

After the expiry of the scheme period, actions as per the relevant provisions of securities laws will be continued against the entities which do not avail this opportunity for settlement, the regulator stated.

By availing the benefit of the scheme, the entities can settle such proceedings and avoid further delay in the conclusion of the said proceedings and the associated long-drawn legal processes or expenses, among others.

This is not the first time the regulator has given the chance to these entities to settle the case.

Earlier, Sebi provided a one-time settlement scheme for the entities in 2020. The scheme was available again from August 2022 to January 2023.

In January 2021, Sebi announced that 1,018 entities, allegedly involved in the manipulation of illiquid stock options, had availed the benefit of its one-time settlement scheme and in March 2023, the regulator disclosed that a total of 10,980 entities availed the benefit under the settlement scheme 2022.

The cases were settled against the entities after they paid settlement charges in the range of Rs 1 lakh to Rs 42 lakh.

As part of the ongoing surveillance, Sebi came across several instances wherein a set of entities was consistently making losses by their trading in options on individual stocks listed on BSE.