SEBI narrows fit and proper disqualifications for market intermediaries
SEBI just made some important changes to its "fit and proper" rules for anyone working as a market intermediary.
Now, just having a pending criminal complaint or FIR about economic offenses won't get you automatically disqualified; only a conviction for an economic offense, a violation under securities laws, an offense involving moral turpitude, or an actual winding-up order will.
The aim is to bring greater procedural clarity and fairness to the regulatory process.
SEBI introduces procedural safeguards and timelines
Winding up cases won't count against you unless there's a final order.
If something happens that could lead to disqualification, intermediaries have 15 working days to let SEBI know.
There's also now a right to a fair hearing before someone is labeled "not fit and proper."
Plus, the default five-year ban is gone (unless specifically mentioned), and the cooling-off period after getting a show-cause notice is down to six months.
If key individuals in your company are found unfit, they've got 30 working days to replace them or have such persons relinquish voting rights and divest holdings within six months.