The Securities and Exchange Board of India (Sebi) is beefing up its legal team, and has invited applications for appointing 25 grade A legal officers. The legal team is involved in adjudicating on alleged violations, defending Sebi’s decisions in appeals, and presenting its cases before quasi-judicial bodies and courts.
“With increasing corporate compliance requirements and an increased vigil over corporate actions and/or omissions, there is bound to be an increased staffing requirement by Sebi of legal officers,” said HS Chandhoke, senior partner, DSK Legal.
The regulator has suffered a number of setbacks in higher forums owing to delays in investigation and reliance on circumstantial evidence, particularly in insider trading cases, according to experts.
The number of appeals filed against Sebi before the Securities Appellate Tribunal rose to 780 at the end of FY22, 43% higher than the previous year. Of these, 383 appeals were dismissed (ruled in favour of Sebi), 138 were allowed (ruled against Sebi) and 140 appeals were remanded for fresh consideration, data from Sebi’s annual report showed.
A total of 118 cases were filed in the Supreme Court in FY22, compared with 94 in the previous year. Of these, 53 cases were filed by Sebi and 65 by others. The pendency of the cases increased to 372 from 304 in the previous year. The high courts saw 208 cases filed on Sebi matters in FY22, lower than 233 filed the previous year. At the end of FY22, 1,142 cases were pending.
Managing legal workload, ensuring timely resolution of cases, and maintaining the integrity of the adjudicatory process are key challenges before the regulator.
Sebi’s statutory mandate of maintaining checks and balances regarding fraudulent and unfair trade practices, along with insider trading, are pivotal areas that require an increase in vigilance and stricter prosecution of offenders to ensure timely disposal of cases, said Suvigya Awasthy, associate partner, PSL Advocates & Solicitors.
The complexity of securities regulations creates difficulties in their interpretation and requires a deep understanding of the regulatory framework.
“In many cases, the parties involved in legal proceedings initiated by Sebi are well-funded and represented by highly-skilled lawyers. This can create an imbalance in terms of resources and legal expertise. Well-funded parties can mount strong legal defences, which may impact the implementation and outcomes of the regulator’s decisions,” said Kalra.
The legal team faces challenges in regulating cross-border transactions and dealing with jurisdictional issues. “Coordinating with foreign regulators, addressing conflicts of laws, and pursuing international enforcement actions requires expertise and cooperation with international bodies. Cybersecurity and cybercrimes are emerging areas which must be regulated by way of effective legislation,” said Sakshi Jain, associate, ASL Partners.
The mode of selection for the current appointments includes an online screening examination consisting of two papers of 100 marks each, another online examination consisting of two papers of 100 marks each and an interview.
The candidate must have a bachelor’s degree in law from a recognised university or institute. Two years of post-qualification experience as an advocate after being enrolled under the Advocates Act, 1961 is a desirable qualification. Sebi may or may not fill up the 25 posts it has advertised for.