Securities and Exchange Board of India

Section 11 (3) of the SEBI Act, 1992 provides that the SEBI has been vested with the same powers as are available to a Civil Court under the Code of Civil Procedures, 1908 for trying a suit in respect of the following matters:

(i)the discovery and production of books of account and other documents at such place and such time indicated by SEBI,

(ii)summoning and enforcing the attendance of persons and examining them on oath,

(iii)inspection of any books, register and other documents of any person referred in section 12 of the Act at any place,

(iv)inspection of any book or register or other document or record of any listed company or a public company which intends to get its securities listed on any recognized stock exchange,

(v)issuing commissions for the examination of witnesses or documents.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2025, Q. 2(d) (Syllabus 2022).

According to the provisions of Section 11B of SEBI Act, 1992, if SEBI is satisfied, after making or causing to be made an enquiry that it is necessary in the interest of investors or orderly development of securities market; or to prevent the affairs of any intermediary or other persons referred to in section 12 being conducted in a manner detrimental to the interest of investors or securities market; or to secure proper management of such intermediary or person; it may issue such directions to the intermediary as may be appropriate in the interest of investors in securities and the securities market.

The power to issue directions under this section shall include and always be deemed to have been included the power to direct any person, who made profit or averted loss by indulging in any transaction or activity in contravention of the provisions of this Act or regulations made thereunder, to disgorge an amount equivalent to the wrongful gain made or loss averted by such contravention.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 1(b)(i) (Syllabus 2022).

Section 11C of the SEBI Act, 1992 provides that where the SEBI has reasonable ground to believe that:

a)the transactions in securities are being dealt with in a manner detrimental to the investors or the securities market; or

b)any intermediary or any person associated with the securities market has violated any of the provisions of this Act or the rules or the regulations made or directions issued by SEBI thereunder;

it may, at any time by order in writing, direct any person specified in the order to investigate the affairs of such intermediary or persons associated with the securities market and to report thereon to the SEBI.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 1(b)(ii) (Syllabus 2022).

The Investigating Authority may require any intermediary or any person associated with securities market in any manner to furnish such information to, or produce such books, or registers, or other documents, or record before him or any person authorised by it in this behalf as it may consider necessary if the furnishing of such information or the production of such books, or registers, or other documents, or record is relevant or necessary for the purposes of its investigation.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 1(b)(iii) (Syllabus 2022).

The Investigating Authority shall keep in its custody the books, registers, other documents and record seized under this section for such period not later than the conclusion of the investigation as it considers necessary and thereafter shall return the same to the company or the other body corporate, or, as the case may be, to the managing director or the manager or any other person, from whose custody or power they were seized and inform the Magistrate or Judge of the Designated Court of such return.

The Investigating Authority may, before returning such books, registers, other documents and record as aforesaid, place identification marks on them or any part thereof.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 1(b)(v) (Syllabus 2022).

Regulatory functions of the SEBI

SEBI functions are basically performed to keep a check on the functioning of the business in the financial markets, including:

•Designing guidelines, regulations and code of conduct for the proper functioning of financial intermediaries and corporate,

•Regulation of takeover of companies,

•Conducting inquiries and audit of exchanges,

•Registration of brokers, sub-brokers, merchant bankers etc.,

•Levying of fees,

•Performing and exercising powers,

•Register and regulate credit rating agency.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 6(c) (Syllabus 2017).

Section 11C of the SEBI Act, 1992 stipulates that it shall be the duty of every manager, managing director, officer and other employee of the company and every intermediary or every person associated with the securities market to preserve and to produce to the Investigating Authority or any person authorised by it in this behalf, all the books, registers, other documents and record of, or relating to, the company or, as the case may be, of or relating to, the intermediary or such person, which are in their custody or power. If any person fails without reasonable cause or refuses:

•to produce to the Investigating Authority or any person authorised by it in this behalf any book, register, other document and record which is his duty to produce; or

•to furnish any information which it is his duty to furnish; or

•to appear before the Investigating Authority personally when required to do so or to answer any question which is put to him by the Investigating Authority; or

•to sign the notes of any examination,

then he shall be punishable with imprisonment for a term which may extend to one year, or with fine, which may extend to one crore rupees, or with both, and also with a further fine which may extend to five lakh rupees for every day after the first during which the failure or refusal continues.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2024, Q. 2A(i) (Syllabus 2017).

As per Section 11(4) of SEBI Act, 1992, the SEBI may, by an order or for reasons to be recorded in writing, in the interest of investors or securities market take any of the following measures either pending investigation or inquiry or on completion of such investigation or inquiry namely:

a.suspend the trading of any security in a recognised Stock Exchange

b.restrain persons from accessing the securities market and prohibit any person associated with securities market to buy, sell or deal in securities.

c.suspend any office-bearer of any stock exchange or self-regulatory organisation from holding such position.

d.impound and retain the proceeds or securities in respect of any transaction which is under investigation

e.attach, for a period not exceeding 90 days, bank accounts for other property of any intermediary or any person associated with the securities market in any manner involved in violation of any of the provisions of this Act, or the rules or regulations made thereunder;

f.direct any intermediary or any person associated with the securities market in any manner not to dispose of or alienate an asset forming part of any transaction which is under investigation.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2020, Q. 2(b) (Syllabus 2017).

With regulatory jurisdiction extended over the corporates with respect to issue of capital and transfer of securities, in addition to all intermediaries and persons associated with securities market, SEBI is vested with following statutory powers:

1.protecting the interests of investors in securities,

2.promoting the development of the securities market, and

3.regulating the securities market.

Its regulatory jurisdiction extends over corporates in the issuance of capital and transfer of securities, in addition to all intermediaries and persons associated with securities market. SEBI can:

—specify the matters to be disclosed and the standards of disclosure required for the protection of investors in respect of issues;

—issue directions to all intermediaries and other persons associated with the securities market in the interest of investors or of orderly development for securities market; and

—conduct enquiries, audits and inspection of all concerned and adjudicate offences under the Act.

In short, it has been given necessary autonomy and authority to regulate and develop an orderly securities market.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2019, Q. 2(d) (Syllabus 2017).

(i)In accordance with the Section 15T of the Securities and Exchange Board of India Act, 1992, any person aggrieved by an order of SEBI made or by an order made by an Adjudicating Officer under this Act may prefer an appeal with SAT having jurisdiction in the matter within a period of 45 days from the date on which a copy of the order made by SEBI or the Adjudicating Officer, as the case may be, is received by him and it shall be in such form and shall be accompanied by such fees as may be prescribed. SAT may entertain an appeal after the expiry of said period of 45 days if it is satisfied that there was sufficient cause for not filing it within that period.

Further, Rule 4 of the Securities Appellate Tribunal (Procedure) Rules, 2000 prescribed that a memorandum of appeal shall be presented in the Form by any aggrieved person in the registry of the Appellate Tribunal within whose jurisdiction his case falls or shall be sent by registered post addressed to the Registrar. A memorandum of appeal sent by post shall be deemed to have been presented in the registry on the day it was received in the registry.

(ii)Under the Securities and Exchange Board of India Act, 1992, the Securities Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters, namely:

a)summoning and enforcing the attendance of any person and examining him on oath,

b)requiring the discovery and production of documents,

c)receiving evidence on affidavits,

d)issuing commissions for the examination of witnesses or documents,

e)reviewing its decisions,

f)dismissing an application for default or deciding it ex-parte,

g)setting aside any order of dismissal of any application for default or any order passed by it ex-parte,

h)any other matter which may be prescribed.

(iii)Section 15Y of the Securities and Exchange Board of India Act, 1992, lays down that no civil court has jurisdiction to entertain any suit or proceeding in respect of any matter which an Adjudicating Officer appointed under this Act or a Securities Appellate Tribunal constituted under this Act is empowered by or under this Act to determine and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

(iv)Section 15Z of the Securities and Exchange Board of India Act, 1992, lays down that any person aggrieved by any decision or order of the Securities Appellate Tribunal may file an appeal to the Supreme Court within 60 days from the date of communication of the decision or order of the Securities Appellate Tribunal to him on any question of law arising out of such order. It has been provided that the Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding 60 days.

(v)Under Section 26A of the Securities and Exchange Board of India Act, 1992, for providing speedy trial of offences under this Act, the Central Government may establish or designate Special Courts by notification. Special Court shall consist of a single judge who shall be appointed by the Central Government with the concurrence of the Chief Justice of the High Court within whose jurisdiction the Judge to be appointed is working. A person shall not be qualified for appointment as a Judge of a Special Court unless he is holding the office of a Sessions Judge or an Additional Sessions Judge immediately before such appointment.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2025, Q. 1(a) (Syllabus 2022).

According to the provisions of Section 15J of the SEBI Act, 1992, while adjudging the quantum of penalty, the SEBI or the Adjudicating Officer shall have due regard to the following factors:

a)the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default,

b)the amount of loss caused to an investor or group of investors as a result of the default,

c)the repetitive nature of the default.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 1(b)(iv) (Syllabus 2022).

i.Securities Appellate Tribunal (SAT) was established to consider appeal against order of the SEBI or by an order made by an adjudicating officer or by an order of the Insurance Regulatory and Development Authority or the Pension Fund Regulatory and Development Authority.

ii.According to Section 15L of the SEBI Act, 1992, the Securities Appellate Tribunal shall consist of a Presiding Officer and such number of Judicial Members and Technical Members as the Central Government may determine, by notification to exercise the powers and discharge the functions conferred on the Securities Appellate Tribunal under SEBI Act, 1992 or any other law for the time being in force.

iii.Section 15Y of the SEBI Act, 1992 lays down that no civil court has jurisdiction to entertain any suit or proceeding in respect of any matter for which an Adjudication Officer has been appointed under the SEBI Act, 1992.

iv.Section 15Z lays down that any person aggrieved by any decision or order of the Securities Appellate Tribunal may file an appeal to the Supreme Court within 60 days from the date of communication of the decision or order of the Securities Appellate Tribunal to him on any question of law arising out of such order.

v.Special courts are established by the Central Government under Section 26A of the SEBI Act, 1992 for providing speedy trial of offences.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 1(c) (Syllabus 2022).

As per Section 15M of the SEBI Act, 1992, a person shall not be qualified for appointment as the Presiding Officer of the Securities Appellate Tribunal, unless he is, or has been, a Judge of the Supreme Court or a Chief Justice of a High Court or a Judge of High Court for at least seven years.

Further, as per Section 15N, the Presiding Officer of the Securities Appellate Tribunal shall hold office for a term of five years from the date on which he enters upon his office, and shall be eligible for reappointment for another term of maximum five years. However, a person shall not hold office as the Presiding Officer after he has attained the age of 70 years.

Keeping in view the above provisions, Mr. Z can be appointed as Presiding Officer of SAT since at the date of the appointment he has attained the age of 64 years. After five years, he will attain the age of 69 years and hence can be re-appointed. However, on the attainment of the age of 70 years, Mr. Z shall have to vacate the office of Presiding Officer and he shall not be re-appointed as Presiding Officer of Securities Appellate Tribunal.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 2(c) (Syllabus 2017).

As per Section 15D of the SEBI Act, 1992, if any person, who is required to obtain a certificate of registration from the SEBI for sponsoring or carrying on any collective investment scheme, sponsors or carries on any collective investment scheme, without obtaining such certificate of registration, he shall be liable to a penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which he sponsors or carries on any such collective investment scheme subject to a maximum of one crore rupees.

Further, Regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999 states that the SEBI may, in the interests of the securities market and the investors give such directions as it deems fit in order to ensure effective observance of these regulations, including directions requiring the person concerned to refund any money or the assets to the concerned investors along with the requisite interest or otherwise, collected under the collective investment scheme.

Therefore, in view of the above-mentioned provisions, Shibu Ltd. and its directors can be directed to refund illegally mobilised funds to investors and penalised with the amount as stated above.

Requirements of section 11AA for Collective Investment Schemes (CIS) under the SEBI Act, 1992

(1)Any scheme or arrangement which satisfies the conditions referred to in sub-section (2) or sub-section (2A) of section 11AA of the SEBI Act, 1992 shall be a collective investment scheme. However, any pooling of funds under any scheme or arrangement, which is not registered with the SEBI or is not covered under sub-section (3), involving a corpus amount of one hundred crore rupees or more shall be deemed to be a collective investment scheme.

(2)Any scheme or arrangement made or offered by any person under which,—

(i)the contributions, or payments made by the investors, by whatever name called, are pooled and utilized for the purposes of the scheme or arrangement;

(ii)the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable, from such scheme or arrangement;

(iii)the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors;

(iv)the investors do not have day-to-day control over the management and operation of the scheme or arrangement.

(2A)Any scheme or arrangement made or offered by any person satisfying the conditions as may be specified in accordance with the regulations made under SEBI Act, 1992.

(3)The following scheme or arrangements shall not be Collective Investment Scheme

(CIS):

(i)made or offered by a co-operative society registered under the Co- operative Societies Act, 1912 or a society being a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State;

(ii)under which deposits are accepted by non-banking financial companies as defined in clause (f) of section 45-I of the Reserve Bank of India Act, 1934;

(iii)being a contract of insurance to which the Insurance Act, 1938, applies;

(iv)providing for any Scheme, Pension Scheme or the Insurance Scheme framed under the Employees Provident Fund and Miscellaneous Provisions Act, 1952;

(v)under which deposits are accepted under section 58A of the Companies Act, 1956 (now 74 of the Companies Act, 2013);

(vi)under which deposits are accepted by a company declared as a Nidhi or a mutual benefit society under Section 620A of the Companies Act, 1956 (now section 406 of the Companies Act, 2013);

(vii)falling within the meaning of Chit business as defined in clause (d) of section 2 of the Chit Fund Act, 1982;

(viii)under which contributions made are in the nature of subscription to a mutual fund;

(ix)such other scheme or arrangement which the Central Government may, in consultation with SEBI, notify.

Provisions for registration under the SEBI Act, 1992

Section 12 (1B) of the SEBI Act, 1992 states that-

“No person shall sponsor or cause to be sponsored or carry on or caused to be carried on any venture capital funds or collective investment schemes including mutual funds, unless he obtains a certificate of registration from the SEBI in accordance with the regulations.”

With this provision, a ban was imposed on a person carrying on any CIS, unless a certificate of registration is obtained in accordance with the regulations framed by SEBI.

Provisions for Application for Grant of Certificate under the SEBI Act, 1992

Regulation 4 of the SEBI (Collective Investment Schemes) Regulations, 1999 provides that any person proposing to carry any activity as a Collective Investment Management Company on or after the commencement of these regulations shall make an application to the SEBI for the grant of registration as specified under these regulations.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 4(b) (Syllabus 2022).

Section 15Z of the SEBI Act, 1992 or/and Section 22F of the Securities Contracts (Regulation) Act, 1956, lay down that any person aggrieved by any decision or order of the Securities Appellate Tribunal may file an appeal to the Supreme Court within 60 days from the date of communication of the decision or order of the Securities Appellate Tribunal to him on any question of law arising out of such order.

It has been provided that the Supreme Court may, if it is satisfied that the applicant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding 60 days.

Procedure for filing appeal to the Supreme Court:

•Obtaining a copy of the Securities Appellate Tribunal order;

•Preparation of Appeal;

•Filing of appeal to the Supreme Court.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2023, Q. 2A(iv) (Syllabus 2017).

Powers of Securities Appellate Tribunal are as under:

(a)summoning and enforcing the attendance of any person and examining him on oath;

(b)requiring the discovery and production of documents;

(c)receiving evidence on affidavits;

(d)issuing commissions for the examination of witnesses or documents;

(e)reviewing its decisions;

(f)dismissing an application for default or deciding it ex parte;

(g)setting aside any order of dismissal of any application for default or any order passed by it ex parte; and

(h)any other matter which may be prescribed.

Every proceeding before the Securities Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian Penal Code, 1860 and the Securities Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2021, Q. 6A(iv) (Old syllabus).

In order to afford proper appellate remedies, SEBI Act, 1992 provides for the establishment of the Securities Appellate Tribunals (SAT) to consider appeals against the SEBI’s orders, or penalties.

Section 15T and 15U of SEBI Act, 1992 deal with the appeal procedure and powers of Securities Appellate Tribunal.

Every appeal shall be filed within a period of forty-five days from the date on which a copy of the order made by the SEBI or the Adjudicating Officer the Insurance Regulatory and Development Authority or the Pension Fund Regulatory and Development Authority, as the case may be, is received by him and it shall be in such form and be accompanied by such fee as prescribed.

The Securities Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.

On receipt of an appeal the Securities Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.

The Securities Appellate Tribunal shall send a copy of every order made by it to the SEBI or the Insurance Regulatory and Development Authority or the Pension Fund Regulatory and Development Authority, as the case may be, the parties to the appeal and to the concerned Adjudicating Officer.

The appeal filed before the Securities Appellate Tribunal shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of receipt of the appeal.

Section 15U of SEBI Act, 1992 lays down that the Securities Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and subject to the other provisions of this Act and of any rules, the Securities Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.

Alternatively, as per Section 29 read with sections 15T and 15U of SEBI Act, 1992, the Central Government has made the Securities Appellate Tribunal (Procedure), Rules, 2000 shall also be followed.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2019, Q. 2(e) (Syllabus 2017).

According to Section 15U (2) of the SEB Act, 1992 , the Securities Appellate Tribunals shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters, namely: —

(a)summoning and enforcing the attendance of any person and examining him on oath;

(b)requiring the discovery and production of documents;

(c)receiving evidence on affidavits;

(d)issuing commissions for the examination of witnesses or documents;

(e)reviewing its decisions;

(f)dismissing an application for default or deciding it ex parte;

(g)setting aside any order of dismissal of any application for default or any order passed by it ex parte;

(h)any other matter which may be prescribed.

Every proceeding before the Securities Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian Penal Code and the Securities Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2019, Q. 5(b) (Old syllabus).

According to Section 15N of SEBI Act, 1992, the Presiding Officer or every Judicial or Technical Member of the Securities Appellate Tribunal shall hold office for a term of five years from the date on which he enters upon his office, and shall be eligible for reappointment for another term of maximum 5 years. However, no Presiding Officer or the Judicial or Technical Member shall hold office after he has attained the age of seventy years.

In the given case, Hon'ble Justice A has already attained age of 62 years at the time of first appointment as Presiding Officer of SAT, hence he can be appointed for first five years. He can be also re-appointed further but only for 3 years, as after further 3 years he will attain the age of 70 years.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2018, Q. 2A(i) (Syllabus 2017).

Section 20A of the SEBI Act, 1992 lays down that no order passed by the SEBI or the adjudicating officer under this Act shall be appealable except as provided in section 15T or section 20 and no civil court shall have jurisdiction in respect of any matter which the SEBI (or the adjudicating officer) is empowered by, or under, this Act to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed by the SEBI or the adjudicating officer by, or under, the SEBI Act.

Any person aggrieved by an order of the SEBI made or by an order made by an adjudicating officer under the SEBI Act or by an order of the Insurance Regulatory and Development Authority (IRDA) or the Pension Fund Regulatory and Development Authority (PFRDA) may prefer an appeal to a Securities Appellate Tribunal (SAT) having jurisdiction in the matter within a period of forty-five days from the date on which a copy of the order made by the SEBI or the Adjudicating Officer or the IRDA or the PFRDA as the case may be.

In view of the above provisions, the company should move to the Securities Appellate Tribunal (SAT).

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2021, Q. 2(b) (Syllabus 2017).

Section 28B (1) of the Securities and Exchange Board of India Act, 1992 prescribed that where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay, if he had not died, in the like manner and to the same extent as the deceased.

However, in case of any penalty payable under this Act, a legal representative shall be liable only in case the penalty has been imposed before the death of the deceased person.

For the purposes of sub-section (1), –

(a)any proceeding for disgorgement, refund or an action for recovery before the Recovery Officer under this Act, except a proceeding for levy of penalty, initiated against the deceased before his death, shall be deemed to have been initiated against the legal representative, and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased and all the provisions of this Act shall apply accordingly;

(b)any proceeding for disgorgement, refund or an action for recovery before the Recovery Officer under this Act, except a proceeding for levy of penalty, which could have been initiated against the deceased if he had survived, may be initiated against the legal representative and all the provisions of this Act shall apply accordingly.

Every legal representative shall be personally liable for any sum payable by him in his capacity as legal representative if, while his liability for such sum remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with.

However, the liability of a legal representative under this section shall be limited to the extent to which the estate of the deceased is capable of meeting the liability.

For the purposes of this section “legal representative” means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character, the person on whom the estate devolves on the death of the party so suing or sued.

In the given case, SEBI has imposed penalty on 14th May and Mr. D has died on 18th May. Therefore, L, being a legal representative of D, is liable to pay the liability, subject to the extent to which the estate of D is capable of meeting the liability of ₹ 50 lakhs.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2026, Q. 2A(ii) (Syllabus 2022).

Section 28A of the SEBI Act, 1992 deals with recovery the amount of Penalty by Recovery Officer. If a person-

•fails to pay the penalty imposed under this act or

•fails to comply with any direction of SEBI for refund of monies or

•fails to comply with a direction of disgorgement order issued under Section 11B

or

•fails to pay any fees due to SEBI, the Recovery Officer may draw up under his signature a statement in the specified form specifying the amount due from the person.

The Recovery Officer shall proceed to recover from such person the amount specified in the certificate by one or more of the following modes, namely:

a)attachment and sale of the person's movable property;

b)attachment of the person's bank accounts;

c)attachment and sale of the person's immovable property;

d)arrest of the person and his detention in prison;

e)appointing a receiver for the management of the person's movable and immovable properties.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2021, Q. 2(e) (Syllabus 2017).

Section 28A (1) of the SEBI Act, 1992 deals with recovery of amounts. If a person:

i.fails to pay the penalty imposed by adjudicating officer or

ii.fails to comply with any direction of SEBI for refund of monies or

iii.fails to comply with a direction of disgorgement order under Section 11 B) or

iv.fails to pay any fees due to SEBI,

The Recovery Officer may draw up under his signature a statement in a specified form specifying the amount due from the person and shall proceed to recover from such person the amount specified in the certificate by one or more of the following modes, namely:-

a.attachment and sale of the person’s movable property;

b.attachment of the person's bank accounts;

c.attachment and sale of the person’s immovable property;

d.arrest of the person and his detention in prison;

e.appointment a receiver for the management of the person’s movable and immovable properties.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2020, Q. 2A(v) (Syllabus 2017).

Regulation 5 of the SEBI (Settlement Proceedings) Regulations, 2018 deals with the scope settlement proceedings. It provides that no application for settlement of any specified proceedings shall be considered, if:

(a)an earlier application with regard to the same alleged default had been rejected;

(b)the audit or investigation or inspection or inquiry, if any, in respect of any cause of action, is not complete, except in case of applications involving confidentiality;

or

(c)monies due under an order issued under securities laws are liable for recovery under securities laws.

The SEBI may not settle any specified proceeding, if it is of the opinion that the alleged default, -

i.has market wide impact,

ii.caused losses to a large number of investors, or

iii.affected the integrity of the market.

Without prejudice to the generality of the foregoing provisions, for settling any specified proceeding the SEBI may inter alia take into account the following factors, -

(a)whether the applicant has refunded or disgorged the monies due, to the satisfaction of the Board;

(b)whether the applicant has provided an exit or purchase option to investors in compliance with;

(c)securities laws, to the satisfaction of the Board;

(d)whether the applicant is in compliance with securities laws or any order or direction passed under securities laws, to the satisfaction of the Board;

(e)any other factor as may be deemed appropriate by the Board.

The SEBI may not settle the specified proceedings where the applicant is a wilful defaulter, a fugitive economic offender or has defaulted in payment of any fees due or penalty imposed under securities laws.

Nothing contained in these regulations shall be construed to restrict the right of the Panel of Whole Time Members to consider or reject any application in respect of any specified proceeding without examination by the Internal Committee or the High Powered Advisory Committee.

[Note : Since the SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2014 have been repealed, therefore, the scope of Settlement Proceedings under SEBI (Settlement Proceedings) Regulations, 2018 has been discussed here. However, the students who have answered on the basis of SEBI (Settlement of Administrative and Civil Proceedings) Regulations, 2014 were also suitably awarded]

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2021, Q. 6(d) (Old syllabus).

In the interests of better regulation of and orderly development of the Securities market, SEBI has issued SEBI (Informal Guidance) Scheme 2003. An intermediary registered with SEBI may make a request for informal Guidance under the scheme. The request seeking informal guidance should state that it is being made under this scheme and also state whether it is a request for a no-action letter or an interpretive letter and should be accompanied with prescribed fees and addressed to the concerned Department of the SEBI.

It should also describe the request, disclose and analyse all material facts and circumstances involved and mention all applicable legal provisions. The SEBI may dispose off the request as early as possible and in any case not later than 60 days after the receipt of the request. The Department may give a hearing or conduct an interview if it feels necessary to do so. The requestor shall be entitled only to the reply. The internal records or views of the SEBI shall be confidential.

The informal guidance may be sought for and given in two forms -

No-action letters: The SEBI indicates that the Department would or would not recommend any action under any Act, Rules, Regulations, Guidelines, Circulars or other legal provisions administered by SEBI to the Board if the proposed transaction described in a request made under the SEBI (Informal Guidance) Scheme, 2003, is consummated.

Interpretive letters: The SEBI provides an interpretation of a specific provision of any Act, Rules, Regulations, Guidelines, Circulars or other legal provision being administered by the SEBI in the context of a proposed transaction in securities or a specific factual situation.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 3(b) (Syllabus 2017).

In the interests of better regulation of and orderly development of the Securities market, SEBI has issued SEBI (Informal Guidance) Scheme 2003 w.e.f. 24.06.2003. The following persons may make a request for informal Guidance under the scheme:

(a)any intermediary registered with the SEBI.

(b)any listed company.

(c)any company which intends to get any of its securities listed and which has filed either a listing application with any stock exchange or a draft offer document with the SEBI or the Central Listing authority.

(d)any mutual fund trustee company or asset management company.

(e)any acquirer or prospective acquirer under the SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997. [Now the SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 2011]

The Guidance Scheme, further deals with various aspects such as the nature of request, fees to be accompanied along with request letter, disposal of requests, the SEBI’s discretion not to respond certain types of requests and confidentiality of requests etc.

The informal guidance may be sought for and given in two forms:

•No-action letters : The SEBI indicates that the Department would or would not recommend any action under any Act, Rules, Regulations, Guidelines, Circulars or other legal provisions administered by SEBI to the Board if the proposed transaction described in a request is consummated.

•Interpretive letters : The SEBI provides an interpretation of a specific provision of any Act, Rules, Regulations, Guidelines, Circulars or other legal provision being administered by the SEBI in the context of a proposed transaction in securities or a specific factual situation.

The request seeking informal guidance should state that it is being made under this scheme and also state whether it is a request for a no-action letter or an interpretive letter and should be accompanied with prescribed fees and addressed to the concerned Department of the SEBI.

It should also describe the request, disclose and analyse all material facts and circumstances involved and mention all applicable legal provisions.

The SEBI may dispose off the request as early as possible and, in any case, not later than 60 days after the receipt of the request.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 2A(iii) (Syllabus 2022).

Confidentiality of request

(a)Any person submitting a letter or written communication under this scheme may request that it receive confidential treatment for a specified period of time not exceeding 90 days from the date of the Department's response. The request shall include a statement of the basis for confidential treatment.

(b)If the Department determines to grant the request, the letter or written communication will not be available to the public until the expiration of the specified period.

(c)If it appears to the Department that the request for confidential treatment should be denied, the requestor will be so advised and such person may withdraw the letter or written communication within 30 days of receipt of the advice, in which case the fee, if any, paid by him would be refunded to him.

(d)In case where a request has been withdrawn under clause (c), no response will be given and the letter or written communication will remain in the SEBI files but will not be made available to the public.

(e)If the letter or written communication is not withdrawn, it shall be available to the public together with any written staff response.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 2A(iv) (Syllabus 2017).

(i)The following persons may make a request for informal Guidance under the SEBI (Informal Guidance) Scheme, 2003:

a)Any intermediary registered with the SEBI;

b)Any listed company;

c)Any company which intends to get any of its securities listed and which has filed either a listing application with any stock exchange or a draft offer document with the SEBI or the Central Listing authority;

d)Any mutual fund trustee company or asset management company;

e)Any acquirer or prospective acquirer under the SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997. [Now the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011] In the given case, since Wadhwani Enterprises Limited is an unlisted company and filed draft offer document with SEBI, therefore, it can apply to SEBI under informal guidance scheme.

(ii)With respect to following matter informal guidance cannot be sought:

a)Those which are general and those which do not completely and sufficiently describe the factual situation;

b)Those which involve hypothetical situations;

c)Those requests in which the requestor has no direct or proximate interest; d) Where the applicable legal provisions are not cited;

e)Where a no-action or interpretive letter has already been issued by that or any other Department on a substantially similar question involving substantially similar facts, as that to which the request relates;

f)Those cases in which investigation, enquiry or other enforcement action has already been initiated;

g)Those cases where connected issues are pending before any Tribunal or Court and on issues which are subjudice; and

h)Those cases where policy concerns require that the Department does not respond.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2021, Q. 3(c) (Syllabus 2017).

The following persons may make a request for informal guidance under the scheme:

-Any intermediary registered with SEBI.

-Any listed company.

-Any company which intends to get any of its securities listed and which has filed either a listing application with any stock exchange or a draft offer document with the Board or the Central listing authority.

-Any mutual fund trustee company or asset management company.

-Any acquirer or prospective acquirer under the SEBI (SAST) Regulations, 2011.

Any person submitting letter or written communication under SEBI Scheme, may request that it receives confidential treatment for a specified period of time not exceeding 90 days from the date of the Department's response. The request shall include a statement of the basis for confidential treatment. If the department determines to grant the request, the letter or written communication will not be available to the public until the expiration of the specified period. If it appears to the department that the request for confidential treatment should be denied, the requestor will be so advised and such person may withdraw the letter or written communication within 30 days of the receipt of advise, in which case the fee, if any, paid by him would be refunded to him. If the request is of such kind in which requestor has no direct or proximate interest, has and request has been withdrawn, no response will be given and the letter or written communication will remain with the SEBI but will not be made available to the public. If the letter or written communication is not withdrawn, it shall be available to the public together with any written staff response.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2020, Q. 6(c) (Old syllabus).

In the interests of better regulation of and orderly development of the securities market, SEBI has issued SEBI (Informal Guidance) Scheme 2003. The following persons may make a request for informal Guidance under the scheme:

(a)any intermediary registered with the SEBI.

(b)any listed company.

(c)any company which intends to get any of its securities listed and which has filed either a listing application with any stock exchange or a draft offer document with the SEBI or the Central Listing authority.

(d)any mutual fund trustee company or asset management company.

(e)any acquirer or prospective acquirer under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. (Now SEBI Takeover Regulations, 2011)

The Guidance Scheme, further deals with various aspects such as the nature of request, fees to be accompanied along with request letter, disposal of requests, SEBI’s discretion not to respond certain types of requests and confidentiality of requests, etc.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2019, Q. 3(c) (Syllabus 2017).

The process followed by the SEBI, under the Second Review of any complaint is as under:

a)The complaint may seek second review of the Complaint within 15 calendar days from the date of the submission of the Action Taken Report [ATR] by the Designated Body. In case the complainant is satisfied with the ATR provided by the concerned Designated Body or complainant does not choose to review the Complaint within the period of 15 calendar days, the Complaint shall be disposed on SCORES.

b)In the case the complainant is not satisfied with the ATR provided by the Designated Body or the concerned Designated Body has not submitted the ATR within 10 calendar days, SEBI may take cognizance of the Complaint for second review through SCORES,

c)SEBI may take up the review with stakeholders involved, including the concerned entity or/ and Designated Body. The concerned entity or/and Designated Body shall take immediate action on receipt of second review complaint from SEBI and submit revised ATR to SEBI through SCORES, within the timeline specified by SEBI.

d)SEBI or the Designated Body (as the case may be) may seek clarification on the ATR submitted by the concerned entity for SEBI review complaint. The concerned entity shall provide clarification to the respective Designated Body and / or SEBI, wherever sought and within such timeline as specified,

e)The second review Complaint shall be treated as ‘resolved’ or ‘disposed’ or ‘closed’ only when SEBI ‘disposes’ or ‘closes’ the Complaint in SCORES. Hence, mere filing of ATR with respect to SEBI review complaint will not mean the SEBI review complaint is disposed.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2025, Q. 2A(i) (Syllabus 2022).

(i)Investors who wish to lodge a Complaint on SCORES (complainant) are required to register themselves on www.scores.gov.in by clicking on “Register here” under the “Investor Corner”.

(ii)Rajesh while filing the registration form should give the details like Name of the investor, Permanent Account Number (PAN), contact details, email id, for effective communication and speedy redressal of the grievances.

(iii)In order to enhance ease, speed and accuracy in the redressal of grievance, the investor may lodge the Complaint against any Entity on SCORES within a period of one year from the date of occurrence of the cause of action. If any complaint is filed on SCORES beyond the limitation period specified above, SEBI may reject such complaint. If the complainant is not satisfied with the resolution provided by the entity, the complainant may request for a review of the resolution provided by the entity within 15 calendar days from the date of the Action Taken Report.

(iv)Any complaint against a liquidated company(ies), or company(ies) under liquidation cannot be dealt through SCORES. Therefore, no complaint can be filed against such category of company(ies) in SCORES.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 2(a) (Syllabus 2022).

(i)Yes, Registered shareholder can lodge the complaint to SCORES Portal if the Company fails to pay the declared dividend within 30 days from the declaration of the dividend to all its registered shareholder. The date of cause of complaint would be 31.01.2021 (as the dividend was declared on 01.01.2021) and a complaint can be lodged on SCORES within 1 year from 31.01.2021.

(ii)SEBI reserves its right to reject a complaint lodged on SCORES, if the date of cause of action is more than one-year-old and/or the complainant has not taken up the complaint with the concerned entity prior to the said date.

Securities and other laws provide important legal rights and remedies if investors have suffered wrongdoing. Acting on their own, they can seek to resolve the complaint through the courts, consumer courts, or arbitration. To take advantage of these laws, the complainant must take legal action promptly or they may lose the right to recover funds. As per the "law of limitations," there are some time periods within which court proceedings should be initiated.

According to Companies Act, 2013, any person claiming to be entitled to any money transferred to the Unpaid Dividend Account of the company may apply to the company for payment of the money claimed. Also, any claimant of shares transferred to the Unpaid Dividend Account shall be entitled to claim the transfer of shares from Investor Education and Protection Fund in accordance with such procedure and on submission of such documents as may be prescribed.

(iii)The complainant may use SCORES to submit the complaint or grievance directly to the listed companies / intermediaries / MIIs for resolution. Such a complaint is called a “Direct Complaint” and shall be redressed by the entity within 30 days without any intervention of SEBI, failing which the complaint shall be registered on SCORES. Thereafter, SEBI shall take it up with the entity concerned.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2023, Q. 2(e) (Syllabus 2017).

Complaints against the following companies cannot be dealt through SCORES even though the complaint may be against a listed entity/ SEBI registered intermediary:-

1.Complaints against the companies which are unlisted/delisted, placed on the Dissemination Board of Stock Exchange.

2.Complaints against a sick company or a company where a moratorium order is passed in winding up / insolvency proceedings, companies under liquidation.

3.Complaints against the companies where the name of company is struck off from Registrar of Companies (RoC) or a Vanishing Company as per the list published by the Ministry of Corporate Affairs (MCA), suspended companies.

4.Complaints that are sub-judice i.e. relating to cases which are under consideration by court of law, quasi-judicial proceedings etc.

5.Complaints against companies, falling under the purview of other regulatory bodies viz. The Reserve Bank of India (RBI), The Insurance Regulatory and Development Authority of India (IRDAI), the Pension Funds Regulatory and Development Authority (PFRDA), Competition Commission of India (CCI), etc., or under the purview of other ministries viz., MCA, etc.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2022, Q. 2(d) (Syllabus 2017).

(a)ABC Limited’s action is not as per the Companies Act, 2013. The provisions of the Companies Act, 2013 requires distribution of dividend to shareholder within 30 days from the date of declaration of dividend.

(b)Yes, Jyeti can make complaint to SCORES as the complaints arising out of issues that are covered under the SEBI Act, Securities Contract Regulation Act, Depositories Act and rules and regulation made there under and relevant provisions of Companies Act, 2013, are under the purview of the SEBI. SCORES is an online platform designed to help investors to lodge their complaints, pertaining to securities market, online with SEBI against listed companies and SEBI registered intermediaries. All complaints received by SEBI against listed companies and SEBI registered intermediaries are dealt through SCORES.

(c)In case investor fails to lodge a complaint within the stipulated time of three years, he may directly take up the complaint with the entity concerned or may approach appropriate court of law.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2022, Q. 2A(ii) (Syllabus 2017).

In its efforts to improve the ease of doing business, SEBI dated March 5, 2020, launched a Mobile Application for the convenience of investors to lodge their grievances in SEBI Complaints Redress System (SCORES).

SCORES mobile app will make it easier for investors to lodge their grievances with SEBI, as they can now access SCORES at their convenience of a smart phone. The Mobile App will encourage investors to lodge their complaints on SCORES rather than sending letters to SEBI in physical mode.

This is another effort of SEBI in improving digitalization in securities market. The App has all the features of SCORES which is presently available electronically where investors have to lodge their complaints by using internet medium. After mandatory registration on the App, for each grievance lodged, investors will get an acknowledgement via SMS and e-mail on their registered mobile numbers and e-mail ID respectively.

Investor can not only file their grievance but also track the status on their complaint redressal. Investor can also key in reminders for their pending grievances. Tools like FAQs on SCORES for better understanding of the complaint handling process can also be accessed. Connectivity to the SEBI Toll Free Helpline number has been provided from the App for any clarifications/help that investors may require.

SCORES is a platform designed to help investors to lodge their complaints online with SEBI, pertaining to securities market, against listed companies, SEBI registered intermediaries and SEBI recognized Market Infrastructure Institutions. As per SEBI norms, entities against which complaints are lodged are required to file an Action Taken Report with SEBI within thirty days. of receipt of complaints. The Mobile App 'SEBI SCORES is available on both iOS and android platforms.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2022, Q. 3(c) (Syllabus 2017).

Revised procedure for redressal of investor grievances using SCORES platform is as under:

(a)Investors who wish to lodge a complaint on SCORES are requested to register themselves on www.scores.gov.in by clicking on “Register here” While filing the registration form, details like Name of the investor, PAN, Contact details, Email id, Aadhaar card number (optional), KYC ID (optional) etc. may be provided for effective communication and speedy redressal of the grievances. Upon successful registration, a unique user id and a password shall be communicated to the investor through an acknowledgement email / SMS.

(b)An investor shall use login credentials for lodging complaint on SCORES (''Login for registered user" section).

(c)The complainant may use SCORES to submit the grievance directly to companies/ intermediaries and the complaint shall be forwarded to the entity for resolution. The entity is required to redress the grievance within 30 days, failing which the complaint shall be registered in SCORES

(d)Presently, the limitation period for filing an arbitration reference with stock exchanges is three year. In line with the same and in order to enhance case, speed & accuracy in redressal of investor grievance, the investor may lodge a complaint on SCORES within three years from the date of cause of complaint, where;

–Investor has approached the listed company or registered intermediary for redressal of the complaint and,

–The concerned listed company or registered intermediary rejected the complaint or,

–The complainant does not receive any communication from the listed company or intermediary concerned or,

–The complainant is not satisfied with the reply given to him or redressal action taken by the listed company or an intermediary.

To enhance investor satisfaction on complaint redressal, SEBI has already put in place a ‘Complaint Review facility’ under SCORES wherein an investor if unsatisfied with the redressal may within 15 days from the date of closure of his complaint in SCORES opt for review of the complaint and the complaint shall be escalated.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2019, Q. 2(d) (Syllabus 2017).

Presently, the following types of complaints are not dealt through SCORES:

(i)Complaints against the companies which are unlisted/delisted, in dissemination board of Stock Exchanges,

(ii)Complaints those are sub-judice i.e. relating to cases which are under consideration by court of law, quasi-judicial proceedings etc.

(iii)Complaints falling under the purview of other regulatory bodies viz. RBI, IRDAI, PFRDA, CCI, etc., or under the purview of other ministries viz., MCA, etc.

(iv)Complaints against a sick company or a company where a moratorium order is passed in winding up / insolvency proceedings.

(v)Complaints against the companies where the name of company is struck off from ROC or a vanishing company as per list published by MCA. vi. Suspended companies, companies under liquidation / BIFR / etc

Alternate Answer

The matters that cannot be considered as complaints in SCORES:

a.Complaint not pertaining to investment in securities market

b.Anonymous Complaints (except whistle-blower complaints)

c.Incomplete or un-specific complaints

d.Allegations without supporting documents

e.Suggestions or s eeking guidance/explanation

f.Not satisfied with trading price of the shares of the companies.

g.Non-listing of shares of private offer

h.Disputes arising out of private agreement with companies/intermediaries

i Matter involving fake/forged documents

j.Complaints on matters not in SEBI purview

k.Complaints about any unregistered/un-regulated activity.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2019, Q. 2A(v) (Syllabus 2017).

SEBI has come along with since inception as an institution regulating the Indian Capital Markets. It has initiated a lot of reforms to make the market safer for investors. The following are the major policy initiatives taken by SEBI since its inception :

•Screen Based Trading : A major developmental initiative was a nationwide online fully-automated screen based trading system (SBTS) where a member can punch into the computer, quantities of securities and the price at which he likes to transact and the transaction is executed as soon as it finds a matching Sale or Buy order from a counter party.

•Depositories Act : The earliest settlement system gave rise to settlement risk. This was due to the time taken for settlement and due to the physical movement of paper. Further, the transfer of shares in favour of the purchaser by the company also consumed considerable amount of time. To obviate these problems, the Depositories Act, 1996 was passed to provide for the establishment of depositories in securities.

•Derivatives : To assist market participants to manage risks better through hedging, speculation and arbitrage, Securities Contracts (Regulations) Act was amended in 1995 to lift the ban on options in securities.

•Settlement Guarantee : A variety of measures were taken to address the risk in the market. Clearing corporations emerged to assume counter party risk. Trade and settlement guarantee fund was set up to guarantee settlement of trades irrespective of default by brokers. These points provide full novation and work as central counter party. The exchanges/clearing corporations monitor the positions of the brokers on real time basis. The securities market moved from T+3 settlement period to T+2 rolling settlement with effect from April 1, 2003. Further, straight through processing has been made mandatory for all institutional trades executed on the stock exchanges.

•Securities Market Awareness : In January 2003, SEBI launched a nationwide Securities Market Awareness Campaign that aims at educating investors about the risk associated with the market as well as the rights and obligations of investors.

•Corporate Governance : To improve the standards of corporate governance, SEBI amended clause 49 of the listing agreement. The major changes in the new clause 49 include amendment/additions to provisions relating to definition of independent directors, responsibility of audit committees, improving quality of financial disclosures, including those pertaining to related party transactions and proceeds from public/rights/ preferential issues, requiring Boards to adopt formal code of conduct, CEO/CFO certification of financial statements and improving disclosures to share holders. Certain non-mandatory clauses like whistle blower policy and restriction of the term of independent directors have also been included.

•Guidelines for Issue of Indian Depository Receipts (IDRs) : SEBI issued Guidelines on disclosures and related requirements for companies desirous of issuing IDRs in India. SEBI also prescribed the listing agreement for entities issuing IDRs.

•Setting up of SME Exchange : SEBI decided to put in place a framework for setting up of new exchange or separate platform of existing stock exchange having nationwide terminals for SME. In order to operationalise the said framework, necessary changes have been made to applicable regulations, circulars etc. As per the framework, market making has been made mandatory in respect of all scrips listed and traded on SME exchange.

•Business Responsibility Reports : SEBI inserted Clause 55 in the Equity Listing Agreement, mandating inclusion of Business Responsibility Reports (“BR reports”) as part of the Annual Reports for listed entities in line with the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ issued by the Ministry of Corporate Affairs.

•Enhanced Corporate Governance Standards : To address concerns related to private equity funds entering into compensation agreements to incentivize promoters, directors and key managerial personnel of listed investee companies which could potentially lead to unfair practices, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) were amended to put in place provisions for disclosures and approval of the board and shareholders.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2018, Q. 4(a) (Old syllabus).