Regulatory Untouchability Should Be Shunned

Political untouchability has found its way into the regulatory system too. New guidelines notified by the Securities and Exchange Board of India ("SEBI") for settlement of regulatory disputes contain a long list of market abuse defaults that shall not be settled by SEBI.

The new guidelines explicitly begin by saying that SEBI "shall not" settle ten types of defaults. Funnily, at the end of the list of defaults, the guidelines hasten to tuck in the following fine print: "Notwithstanding anything contained in this circular, based on the facts and circumstances of the case, [SEBI] may settle any of the defaults listed above."

In the current national environment, indeed, this is a political statement – the media has picked up the "right noises" about SEBI having curbed its own ability to settle disputes relating to "serious allegations". Yet, the truth is SEBI may indeed settle any dispute of any nature.