Raselle Capital VCC settles with SEBI for alleged violations of FPI regulations with payment of Rs 1.23 crore

Raselle VCC Capitala foreign portfolio investor, concluded a settlement in an arbitration case with Securities and Exchange Board of India (SEBI) for alleged violations of Foreign Portfolio Investor (FPI) rules. The settlement was reached after the investor paid Rs 1.23 crore as settlement fees.

The case emanates from alleged violations of SEBI FPI regulations by Raselle Capital VCC. The SEBI arbitration proceedings have been initiated under the SEBI Act, 1992 for potential violations of certain regulatory requirements. Alleged violations of Regulation 22(1)(c) of SEBI (Foreign Portfolio Investors) Regulations, 2019 and Clause 12 of Part A of the Master Circular for FPIs and DDPs dated December 19, 2022.

Regulation 22(1)(c) of SEBI (Foreign Portfolio Investors) Regulations, 2019 deals with general duties and responsibilities of FPIs. It specifies compliance requirements and obligations that FPIs have to follow in their operations.

Paragraph 12 of Part A of the Master Circular for FPIs and DDPs sets out the compliance and reporting obligations of FPIs, including timely reporting of non-compliances, submission of required information to regulatory authorities, etc.

On December 14, 2023, SEBI appointed an adjudicating officer to investigate and adjudicate the matter. Subsequently, Raselle Capital VCC was issued a show cause notice (SCN). The notice asked the company to explain why an investigation should not be conducted and penalties should not be imposed for the alleged violations.

While the arbitration proceedings were pending, Raselle Capital VCC decided to settle by filing a settlement application. The application was filed under the SEBI (Settlement Proceedings) Regulations, 2018. The settlement process allows for the resolution of enforcement cases without admitting or denying any violations.

After the settlement application was filed, Raselle Capital VCC approached the SEBI Internal Committee to discuss potential settlement terms. After negotiations, a revised settlement proposal was circulated via email. SEBI High Power Advisory Committee (HPAC) reviewed the proposal and recommended settlement on payment of Rs 1.23 crore.

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