Standard Chartered Bank settles FPI rules violation case with Sebi

New Delhi: Standard Chartered Bank settled with capital markets regulator Sebi a case alleging violations of FPI rules and other regulatory norms after paying Rs 57.20 lakh towards settlement charges.

After receipt of the settlement amount by Sebi, the instant adjudication proceedings initiated against Standard Chartered Bank vide Show Cause Notice (SCN) dated June 17, 2025, are hereby disposed of in terms of settlement regulations, the regulator said in its order passed on Tuesday.

In its show cause notice, Sebi alleged that Standard Chartered Bank (noticee) acted as a designated depository participant (DDP), and failed to report to Sebi instances of delay exceeding six months in the intimation of material changes relating to beneficial ownership in respect of certain Foreign Portfolio Investors (FPIs).

The noticee delayed processing of investor grouping changes and, in certain cases, took as much as 19 to 20 days to intimate the grouping changes to NSDL after receipt of complete documents from the FPls.

Standard Chartered Bank granted exemptions from granular disclosure requirements to certain beneficial owners of FPIs without ensuring compliance with the applicable regulatory framework, and also failed to exercise due diligence to ascertain the investor grouping of FPIs.

Thereafter, Sebi issued an SCN on June 17, 2025, against the applicant (Standard Chartered Bank) for the alleged violations of FPI rules and Depositories and Participants regulations.

Accordingly, the applicant filed a settlement application and proposed to settle the instant proceedings initiated against them "without admission or denial" of the findings of fact and conclusion of law.

Following discussions with Sebi's internal committee and consideration by the High Powered Advisory Committee (HPAC), the settlement terms were recommended and later approved by the panel of the regulator's Whole-time Members in January 2026.

After the applicant remitted the settlement amount, Sebi disposed of the adjudication proceedings through a settlement order passed on Tuesday.

However, Sebi clarified that it retains the right to reopen the case if representations made during the settlement process are found to be false or if terms are breached.