The total amount of penalty imposed by Securities and Exchange Board of India (SEBI) for violation of various market regulations surged 11 times to Rs 813.83 crore during 2024-25, compared to Rs 74.66 crore in the previous fiscal.
While the amount of penalty increased substantially, the number of entities found violating different securities regulations declined 26 per cent to 463 in 2024-25, down from 629 in 2023-24, according to Sebi’s Annual Report for 2024-25.
The regulator saw the highest number violations under Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) category with 155 entities found flouting regulations. This was followed by 116 entities violating Listing Obligations and Disclosure Requirements (LODR) regulations.
In 2024-25, direction of debarment was issued against 202 entities, both debarment and disgorgement directions were issued against 89 entities and only disgorgement direction was issued against 15 entities, the annual report showed.
In its effort to unearth market misconduct, Sebi conducted search and seizure operations involving 89 entities at 71 locations covering 18 cities across the country.
During the year, Sebi initiated investigations in 400 cases pertaining to various violations of securities laws and 301 cases were completed. Investigations were taken majorly for insider trading (287 cases) and market manipulation and price rigging (106 cases).
Sebi said that it identified Rs 77,800.4 crore as ‘difficult to recover’ dues at the end of fiscal 2024-25, as against Rs 76,292.9 crore as on March 31, 2024.
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Sebi said it received 68,132 complaints through its online grievance redressal platform SCORES in 2024-25, with nearly 38 per cent against stock brokers. Of the 68,132 complaints received, 63,971 grievances were disposed of while 4,074 are still pending, the report showed.
Further, Sebi Chairman Tuhin Kanta Pandey, in the annual report, said the regulator was looking at further simplifying the regulatory framework for foreign portfolio investors, with an aim to ensure long-term foreign capital flows into the domestic market.
“The priority of Sebi for the coming year is rationalizing and simplifying regulatory framework for foreign portfolio investors (FPIs) with the objective of enhancing the ease of operations and encouraging long-term foreign capital flows,” Pandey wrote in his statement in the annual report.
He said the regulator will make efforts to streamline processes, remove regulatory frictions and strengthen engagement with FPIs and stakeholders.
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Foreign capital has played a vital role in the development of India’s securities markets and contributed to sustained capital formation. Markets regulator has already undertaken a host of reforms to ease regulations for FPIs.
Last week, Sebi had floated a consultation paper to improve ease of investments by simplifying onboarding and ongoing compliances for a specific set of Foreign Portfolio Investors (FPIs) like government-owned funds and certain regulated public retail funds – that are objectively verified as belonging to a low-risk category.
In the coming year, Sebi has proposed to initiate a comprehensive exercise to rationalize and optimize existing regulations. “To address this, the focus will be on identifying and removing regulatory redundancies, simplifying procedural requirements and leveraging technology to ease the compliance burden,” Pandey said.
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