SECURITIES APPELLATE TRIBUNAL(SAT) STAYS SEBI'S BAN ON BIYANI

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For : GS-3: Economy

CONTEXT:

The Securities Appellate Tribunal (SAT) has stayed the order passed by market regulator SEBI.
Earlier SEBI had put a one-year ban on Future Retail Chairperson Kishore Biyani and some other promoters from the securities market.
Interim measure: SAT has also directed the Future Group promoters to deposit a sum of Rs 11 crore as an interim measure.

SAT ORDER:

Major relief: In a major relief for Future Retail CEO Kishore Biyani, SAT has stayed the SEBI's order for alleged insider trading in the scrip of Future Retail (FRL).
SAT stayed the "effect and operation" of SEBI's order accusing the promoters of the Future Group of insider trading in the context of purchases of Future Retail shares made in March 2017.

WHAT WAS THE ISSUE?

Restructuring of Future Group: Of the home furnishing businesses in the Future Group -- with the physical store format of Future Retail and online store format of Future Enterprises being demerged into a new company -- had been well known in the public since 2016.

SEBI ORDER:

Earlier this month, the capital market regulator SEBI barred Biyani, among others, from the securities market for a period of one year for insider trading in the scrip of Future Retail (FRL).
Prima facie violation: An investigation had found that some of the entities traded in shares of Future Retail on the basis of unpublished price sensitive information (UPSI) violating SEBI norms during the period between March 10 and April 20, 2017.
Further, the notices were also restrained from buying, selling or dealing in the securities of Future Retail Limited (FRL), directly or indirectly, in any manner whatsoever, for a period of two years.
SEBI in its order had also asked Future Corporate Resources, Kishore Biyani and Anil Biyani to jointly and severally disgorge an amount of over Rs 17.78 crore along with an interest at the rate of 12 per cent per annum from April 20, 2020 till the date of actual payment.

THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI):

It is the regulator of the securities and commodity market in India owned by the Government of India.
It was established in 1988 and given statutory status through the SEBI Act, 1992.
SEBI is responsible for the needs of three groups:
- Issuers of securities
- Investors
- Market intermediaries

Functions:

Powers:

To approve by−laws of Securities exchanges.
To require the Securities exchange to amend their by−laws.
Inspect the books of accounts and call for periodical returns from recognized Securities exchanges.
Inspect the books of accounts of financial intermediaries.
Compel certain companies to list their shares in one or more Securities exchanges.
Registration of Brokers and sub-brokers.

SECURITIES APPELLATE TRIBUNAL (SAT):

Composition:

A Presiding Officer & Two other members.
Appointment: The Presiding officer of SAT shall be appointed by the Central Government in consultation with the Chief Justice of India or his nominee.

Mandate:

To hear and dispose of appeals against orders passed by
- Securities and Exchange Board of India (SEBI) under SEBI Act, 1992
- Pension Fund Regulatory and Development Authority (PFRDA) under the PFRDA Act, 2013.
- Insurance Regulatory Development Authority of India (IRDAI) under the Insurance Act, 1938

SOURCE: Business Standards

MCQs:

Q. Securities appellate tribunal (SAT) hear and dispose of appeals against orders passed by

Which of the above option given is/are correct?

ANS: C