SC GIVES SEBI PROTECTION FROM SAT

In an important ruling, the Supreme Court (SC) has held that the Securities and Appellate Tribunal (SAT), a quasi judicial authority that presides over capital market related cases, has no powers to modify the penalty imposed on stock brokers by the Securities and Exchange Board of India (SEBI). While disposing of the case, SC made it clear that SEBI can suspend the license of a broker for minor violation of rules and cancel it altogether in case of major violations, and the tribunal cannot alter the market regulator's decision. There have been instances where aggrieved parties have moved to SAT against the SEBI decision and the tribunal has let them off after imposing monetary penalties. This is
despite the fact that the SEBI Act does not provide any such power to the tribunal.