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Sunday, February 22, 2009

SEBI consents with UBS means its a Consent Order

SEBI, Swiss co UBS settle dispute on consent terms, what does this mean?
for a CS Executive Students doing Securities Law.

Yes, Consent Order is an order passed by SEBI which are NOT appealable to SAT. That is, orders passed with the consent of both the parties (one of the party being SEBI). It is similar to compounding under Companies Act or other Acts, where both the parties enter into settlement terms for a feasbile sum.

Try reading through the consent order of UBS in and the case is explained well in

In the consent order, you may find SEBI Circular No. EFD/ED/Cir-1/2007 dated April 20, 2007 which is the circular empowering SEBI to enter into Consent Order, for which the party has to apply in Form A.

Understand, the difference between Consent Order & Compounding now.
Sec 15T of SEBI Act
Sec 24A of SEBI Act
For administrative / civil proceedings
For criminal prosecutions; NOT being an offence punishable with imprisonment only OR imprisonment & fine
Application at any stage where probable cause of violation has been found
Application before / after institution of proceedings
To appropriate sanction, remedy & deterrence WITHOUT resorting to litigation, lengthy proceedings & consequential delays
To avoid lengthy process, which would save cost, time, mental, agony, etc…in return for payment of compounding charges

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