Concerned over the increasing legal expenses as many of its orders getting challenged in tribunal and courts, the Securities and Exchange Board of India (SEBI) will soon consider a proposal to recover legal expenses incurred in such litigations from penalties imposed by it on defaulters before crediting the amount to the government's coffers. Over the past three financial years, capital markets regulator has incurred average litigation expenditure in the range of Rs 4-5 crore per annum, however, such expenses are expected to be much higher in the current fiscal year.
Further, SEBI may also consider charging 'processing fees' for various service requests from market intermediaries, companies and stock exchanges as most of the services are being provided free by SEBI in spite of bearing significant cost of such matters. However, fees are not proposed on investor complaints, in accordance with the processing time, cost and procedures involved.
The proposal, which is based on recommendations made by a Committee on Rationalisation of Financial Resources (CRFR) is likely to be considered by SEBI board later this week. The proposal has been made to enhance SEBI's financial resources to help it meet expenses for its various regulatory and investor-centric activities.