Sebi plans revised norms for recovery of investors' money in cases of illegal collective investment schemes

New Delhi: Sebi plans to put in place revised norms for recovering investors' money in cases of illegal collective investment schemes, wherein a registered insolvency professional will be appointed as administrator to undertake sale of assets.

A senior official said the regulator is looking to revise the procedures to be followed after passing of orders in cases related to unregistered collective investment schemes.

In case an entity is not traceable or is not complying with Sebi directions, the recovery officer can appoint an administrator for the purpose of selling the properties attached.

According to the official, only an entity registered with the IBBI as insolvency resolution professional would be considered eligible for appointment as administrator.

Sebi logo. Reuters image.

Sebi logo. Reuters image.

The Insolvency and Bankruptcy Board of India (IBBI) is implementing the Insolvency and Bankruptcy Code.

Before appointment as administrator, such an entity should provide an undertaking with Sebi that it does not have any "conflict of interest with the unregistered collective investment scheme entity, its directors, promoters and its group entities," the official said.

According to the official, the proposal is likely to be taken up during Sebi's board meeting scheduled for 21 June.

The expenses pertaining to the administrator would be borne by the entity or come from the sale proceeds of the entity's assets.

The official said the administrator can appoint an independent chartered accountant to verify the details of money raised, including payment already made to investors.

The proposed norms would also be applicable in instances of refunding investors in deemed public issues and cases where a particular entity has failed to comply with directions to disgorge ill-gotten gains.

In case the administrator is not able to raise the entire dues by sale of the entity's assets, then repayment would be done on a pro-rata basis.


Updated Date: Jun 14, 2018 18:40 PM

Also Watch

Watch: The true stories from Dharavi that inspired Rajinikanth's Kaala
  • Thursday, March 8, 2018 Watch: Cyrus Khan talks about Parkour, jumping across walls and why he hates sitting
  • Thursday, May 31, 2018 Unwind: India's basketball sensation Amjyot Singh has his eyes set on becoming an NBA regular
  • Monday, May 28, 2018 First Day First Showsha — Review of Solo: A Star Wars Story in 10 questions
  • Saturday, May 19, 2018 Social Media Star: Rajkummar Rao and Bhuvan Bam open up about selfie culture, online trolls

Also See