SEBI Act, 1992

CHAPTER 2: SECURITIES EXCHANGE BOARD OF INDIA ACT, 1992

INTRODUCTION

ESTABLISHMENT (Sec - 3)

CONSTITUTION (Sec - 4)

Term of office and other conditions (Sec - 5)

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Removal of members (Sec - 6)

Meetings (Sec - 7)

Members not to participate in certain case (Sec - 7A)

Vacancies not to invalidate proceedings (Sec - 8)

Sec - 9 and 10 - Not in syllabus

Sec - 11 Power and Function of SEBI

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Sec - 11(4) Power of SEBI during Inspection or Inquiry

Sec - 11(5) Disgorged funds

Sec - 11A Regulation or prohibition of issues of prospectus, etc.

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Sec - 11AA Collective Investment Scheme

Sec - 11B - Power to issue directions and Levy Penalty

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Sec - 11C: Power of SEBI to order Investigation

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Sec - 11D: CEASE AND DESIST PROCEEDINGS

Sec - 12: REGISTRATION CERTIFICATE:

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Sec - 12: PROHIBITION OF MANIPULATIVE AND DECEPTIVE DEVICES, INSIDER
TRADING AND SUBSTANTIAL ACQUISITION OF SECURITIES OR CONTROL

No person shall directly or indirectly:

(a) use any manipulative or deceptive device, in connection with the issue, purchase or sale of any listed securities,
in contravention of the provisions of this Act/Rules/Regulations;
(b) employ any device to defraud in connection with issue or dealing in listed securities;
(c) engage in any act, practice, course of business which operates or would operate as fraud or deceit upon any
person, in connection with the issue, dealing in listed securities, in contravention of the provisions of
Act/Rules/Regulations;
(d) engage in insider trading;
(e) deal in securities while in possession of material or non-public information or communicate such material or non-
public information to any other person, in a manner which is in contravention of the provisions of
Act/Rules/Regulations;
(f) acquire control of any company or securities more than the percentage of equity share capital of a listed securities
in contravention of the regulations made under this Act.

Sec - 13: GRANTS BY THE CG

Sec - 14: FUND

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Sec 15A - 15HB

Sec Failure: Penalty

15A a. Fails to furnish any document, return or report to the Board or furnishes or files false, incorrect or incomplete information, return, report, books or Rs. 1 lakh + Rs. 1 lakh / day up to Rs. 1 Crore.
other documents.

b. Fails to file any return or furnish any information, books or other documents within time specified or who furnishes or files false, incorrect, or
incomplete information, return, report, books or other documents.

c. Fails to maintain books of account or records.

15B If any person registered u/s 12 is required by the Act to enter into an agreement with his client, fails to enter into such agreement Rs. 1 lakh + Rs. 1 lakh / day up to Rs. 1 Crore.
15C If any listed company or any person who is registered u/s 12, after having been called upon by the Board, to redress the grievances of investors, fails to Rs. 1 lakh + Rs. 1 lakh / day up to Rs. 1 Crore.
redress such grievances within the time specified by the Board, such company or intermediary
15D If any person, who is: Rs. 1 lakh + Rs. 1 lakh / day up to Rs. 1 Crore
a. required u/s 12 to obtain a CoR for sponsoring or carrying on any CIS, including MF, sponsors or carries on any such activity without obtaining such
CoR
b. registered as a CIS u/s 12 but fails to
• comply with the T&C of CoR
• to make an application for listing of its schemes as provided for in the regulations governing such listing
• dispatch unit certificates of any scheme in the manner provided in the regulation governing such dispatch
• refund the application monies paid by the investors within the period specified in the regulations
• Invest money collected by such CIS as per regulations
15E Where any AMC of a MF registered under this Act, fails to comply with any of the regulations providing for restrictions on the activities of the AMC, Rs. 1 lakh + Rs. 1 lakh / day up to Rs. 1 Crore
such AMC:
15EA Where any person fails to comply with the regulations in respect of, Rs. 1 lakh + Rs. 1 lakh / day up to (Higher of Rs. 1 Crore or 3
• alternative investment funds, times of the gain made out of such failure)
• infrastructure investment trusts, and
• real estate investment trusts or

or fails to comply with the directions issued by the Board, shall be liable to
15EB Where an investment adviser or a research analyst fails to comply with the regulations or directions issued by the Board, such investment adviser or Rs. 1 lakh + Rs. 1 lakh / day up to Rs. 1 Crore
research analyst
15F If any person, who is registered as a stockbroker under this Act: Rs. 1 lakh + Rs. 1 lakh / day up to Rs. 1 Crore
a. fails to issue contract notes in the form and manner specified by the stock exchange of which such broker is a member
15F b. fails to deliver any security or fails to make payment of the amount due to the investor as per the regulations Rs. 1 lakh + Rs. 1 lakh / day up to Rs. 1 Crore
15F c. charges an amount of brokerage which is in excess of the brokerage specified in the regulations Rs. 1 lakh + Rs. 1 lakh / day up to 5 times the amount of
brokerage charged in excess of the specified brokerage
15G If any insider who: Rs. 10 lakhs up to (Higher of Rs. 25 Crores or 3X amount of
a. either on his own behalf or on behalf of any other person, deals in securities of a body corporate listed on any stock exchange on the basis of any profit made)
unpublished price-sensitive information; or
b. communicates any unpublished price-sensitive information to any person, with or without his request for such information except as required in
the ordinary course of business or under any law; or
c. counsels, or procures for any other person to deal in any securities of any body corporate on the basis of unpublished price-sensitive information
15H If any person, who is required under this Act/rules/regulations, fails to: Rs. 10 lakhs up to (Higher of Rs. 25 Crores or 3X amount of
a. disclose the aggregate of his shareholding in the body corporate before he acquires any shares of that body corporate; or profit made)
b. make a public announcement to acquire shares at a minimum price; or
c. make a public offer by sending letter of offer to the shareholders of the concerned company; or
d. make payment of consideration to the shareholders who sold their shares pursuant to letter of offer
15HA If any person indulges in fraudulent and unfair trade practices relating to securities Rs. 5 lakhs up to (Higher of Rs. 25 Crores or 3X amount of
profit made)
15HAA Any person, who: Rs. 1 lakh up to (Higher of Rs. 10 Crores or 3X amount of
a. knowingly DAMFS any information, record, document (including e-records) required to be maintained as per the Act, so as to impede, obstruct, or profit made)
influence the III, Audit, or proper administration of any matter within the jurisdiction of the Board.
b. without being authorised to do so, access or tries to access, or denies or modifies access parameters, to the regulatory data in the database;
c. without being authorised to do so, downloads, extracts, copies, or reproduces in any form the regulatory data maintained in the system database;
d. knowingly introduces any computer virus or other computer contaminant into the system database and brings out a trading halt;
e. without authorisation disrupts the functioning of system database;
f. knowingly damages, destroys, deletes, alters, diminishes in value or utility, or affects by any means, the regulatory data in the system database; or
g. knowingly provides any assistance to or causes any other person to do any of the acts specified in clauses (a) to (f)
15HB Person fails to comply with any provision of this Act/Rules/Regulations/directions issued by the Board for which no separate penalty has been Rs. 1 lakh + Rs. 1 lakh / day up to Rs. 1 Crore
provided

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Sec - 15I: POWER TO ADJUDICATE

Sec - 15J: FACTORS TO BE TAKEN INTO ACCOUNT WHILE DECIDING QUANTUM OF PENALTY

Sec - 15JA: All penalties to be credited to Consolidated Fund of India

Sec - 15JB: Settlement of Administrative and Civil Proceedings

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 SECURITIES APPELATE TRIBUNAL (SAT)

Sec 15K - ESTABLISHMENT

Sec 15L - COMPOSITION

Sec 15M - QUALIFICATION

Sec 15MA / MB - APPOINTMENT

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 Sec 15MC - VALIDITY OF APPOINTMENT

Sec 15N - TENURE

Sec 15 O - SALARY - As may be prescribed

Sec 15P - VACANCIES IN THE OFFICER OF MEMBERS

Sec 15Q - RESIGNATION AND REMOVAL

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Sec 15Q - APPT., QUALIFICATION, ETC. OF MEMBERS TO BE GOVERNED BY SECTION 184
FINANCE ACT 2017

Sec 15R - ORDERS CONSTITUTING SAT TO BE FINAL AND NOT TO INVALIDATE ITS PROCEEDINGS

Sec 15S - STAFFS - CG shall provide with such officers / employees as it may deem fit who shall discharge
duty under general superintendence of PO

Sec 15T - APPEALS TO SAT

Sec 15U - PROCEDURES AND POWER OF SAT

Sec 15V - RIGHT TO LEGAL REPRESENTATION (OF APPELANT)

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Sec 15W - LIMITATION ACT, 1963 APPLICABLE TO APPPEAL MADE TO SAT

Sec 15X - PO, MEMBERS, OFFICERS, EMPLOYEE OF SAT TO BE PUBLIC SERVANT (SEC 21 OF IPC)

Sec 15Y - CIVIL COURT TO HAVE NO JURISDICTION

Sec 15Z - APPEAL TO SC

Sec 16 - POWER OF CG TO ISSUE DIRECTIONS

Sec 17 - POWER OF CG TO SUPERSEDE BOARD

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Sec 18 - RETURNS AND REPORTS

Sec 19 - NOT IN MODULE

Sec 20 - APPEALS

Sec 22 - MEMBERS, OFFICERS, EMPLOYEE OF BOARD TO BE PUBLIC SERVANT (SEC 21 OF IPC)

Sec 23 - PROTECTION FOR ACT DONE IN GOOD FAITH

Sec 24 - OFFENCES
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Sec 24 - OFFENCES

Sec 24A - COMPOSITION OF CERTAIN OFFENCES

Notwithstanding anything contained in the Code of Criminal Procedure, 1973, any offence punishable under this Act, not being an
offence punishable with imprisonment only, or with imprisonment and also with fine, may either before or after the institution of
any proceeding, be compounded by a SAT or a court before which such proceedings are pending

Sec 24B - POWER TO GRANT IMMUNITY

Sec 26 - COGNIZANCE OF OFFENCE

No court shall take cognizance of any offence punishable under this Act or any rules or regulations made thereunder, save on a complaint made by the Board

SPECIAL COURT

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Sec 26A - ESTABLISHMENT

Sec 26B - OFFENCE TRIALABLE BY SC

Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences under this Act shall be taken cognizance of and tried by the
Special Court established for the area in which the offence is committed or where there are more Special Courts than one for such area, by such one of
them as may be specified in this behalf by the High Court concerned.

Sec 26C - APPEAL

Sec 26D - APPLICATION OF CCP, 1973

Sec 27 - CONTRAVENTION BY COMPANIES

Sec 28A - RECOVERY OF AMOUNT

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Explanation 1 - For the purposes of this sub-section, the person's movable or immovable property or monies held in bank accounts shall include any property or
monies held in bank accounts on or after the date when the amount specified in certificate had become due, which has been transferred directly or indirectly
by the person to his spouse or minor child or son's wife or son's minor child, otherwise than for adequate consideration.

The movable or immovable property or monies held in bank accounts so transferred to his minor child or his son's minor child is concerned shall, even after the
date of attainment of majority by such minor child or son's minor child, as the case may be, continue to be included in the person's movable or immovable
property or monies held in bank accounts for recovering any amount due from the person under this Act.

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