Following the latest Supreme Court verdict in which it has said that circular of regulatory bodies like SEBI cannot be challenged in Securities Appellate Tribunal (SAT), United Forum has withdrawn its appeal against SEBI on commission disclosure of distributors filed with SAT.
“Administrative orders such as circulars issued under the SEBI Act are obviously outside the appellate jurisdiction of the tribunal,” said the Supreme Court order. This has resulted in withdrawal of many appeals including commission disclosure of distributors.
Last year, United Forum had opposed the SEBI circular in which it has asked fund houses to disclose commission structure of distributors in the half-yearly account statements in absolute terms. The circular has come into effect from October 1 and investors have already started receiving CAS.
However, the verdict will not impact the writ petition against SEBI circular on commission disclosure in Jharkhand High Court. A High Court Lawyer who didn’t want to be named told Cafemutual that though the circular cannot be challenged in SAT, distributors can still file writ petition against SEBI’s circular in the high court.
Meanwhile, a senior member of United Forum has said that they have also withdrawn the appeal against the government of India on Service Tax following the dissolution of the forum. United Forum had filed an appeal with the Bombay High Court against the government on levy of service tax on distributors. The forum had appealed that the service tax liability should be on investors as they are the end consumers of the product.
