Securities and Exchange Board of India (SEBI) has introduced a reward system in order to recover fines from elusive offenders.
Securities and Exchange Board of India (Sebi) said that an informant will get up to ₹20 lakh for sharing information about the assets of defaulters.
It further said that the interim reward amount will not exceed two and a half percent of the reserve price of the asset regarding which tips were provided or ₹5 lakh, whichever is less. While the final reward will not exceed 10 percent of the dues recovered or ₹20 lakh, whichever is less.
Who will be eligible for the reward?
Sebi says a credible informant would be someone if he or she furnishes original information in relation to the asset of a defaulter concerning the dues which are certified as ‘Difficult to Recover’.
The difficult-to-recover dues are the ones that could not be recovered even after exhausting all the modes of recovery.
Also, the regulator issued a list of 515 defaulters, where information can be provided by any informant.
How rewards would be granted?
Sebi will set up an informant reward committee comprising the chief general manager of the Recovery and Refund Department, the concerned recovery officer having jurisdiction in the matter, another recovery officer nominated by the chief general manager, and an officer in the grade of deputy general manager or higher, of the Office of Investor Assistance and Education nominated by the chief general manager in charge of Investor Protection and Education Fund (IPEF).
The informant reward committee will give its recommendations to the competent authority on the matters pertaining to the eligibility of informants for reward and the determination of the amount of reward payable to informants.
Sebi said that the amount reward granted to the informant will be paid from the Investor Protection and Education Fund.
According to Sebi’s annual report for 2021-22, the markets regulator segregated dues to the tune of ₹67,228 crore under the difficult to recover (DTR) category at the end of March 2022.