JP Morgan Chase Bank Settles SEBI Proceedings Over FPI Regulation Violations For ₹34.42 Lakh

US-based banking major J.P. Morgan Chase Bank on Friday settled proceedings that may be initiated with the Securities and Exchange Board of India in relation to alleged violations of Foreign Portfolio Investor (FPI) regulations upon payment of Rs 34.42 lakh as a settlement amount.

The order was passed by Whole Time Members Kamlesh Chandra Varshney and Amarjeet Singh in exercise of powers under the SEBI Settlement Regulations.

JP Morgan Chase Bank had filed a suo motu settlement application under the SEBI (Settlement Proceedings) Regulations, 2018 proposing to settle the enforcement proceedings without admission or denial of findings.

As per SEBI, the alleged violations pertained to grant of Category II license to four UK-based FPIs which were not appearing in the register of regulated entities maintained by the UK Financial Conduct Authority (UK-FCA).

According to the regulator, the bank subsequently re-categorised the four FPIs as Category I without verifying their regulatory status. Additionally, following a material change involving the merger of an FPI entity, the bank failed to reassess eligibility in a timely manner and permitted transactions even after being informed of the requirement of fresh registration.

The Internal Committee of SEBI considered the settlement application and held discussions with the bank, after which revised settlement terms were submitted proposing Rs 34,42,500 as the settlement amount.

The High Powered Advisory Committee recommended settlement, which was subsequently approved by the Panel of Whole Time Members.

In view of the settlement, SEBI ordered:

“SEBI shall not initiate any enforcement action against the Applicant for the said violations”

However, it clarified that the order is without prejudice to SEBI's right to initiate appropriate action in case of breach of settlement terms or if any representation is found to be untrue.