The Finance Bill, 2018 has proposed amendments to The Securities And Exchange Board Of India Act, 1992. These amendments have given more powers to SEBI to levy penalties.
As per the Bill, an investment adviser or a research analyst fails to comply with SEBI regulations or directions issued by SEBI, such investment adviser or research analyst will have to bear penalty which will be not less than Rs. 1 lakhs. The penalty may extend to Rs. 1 lakh a day till the time the failure continues subject to the limit of Rs. 1 crore.
A similar penalty is levied on alternative investment funds, infrastructure investment trusts and real estate investment trusts for non-compliance of regulations or directions issued by SEBI.
SEBI can also charge penalty to intermediaries on the following actions:
- Penalty for failure to furnish information, return, etc.
- Penalty for failure to enter into agreement with clients.
- Penalty for failure to redress investors’ grievances
- Penalty for insider trading
- Penalty for fraudulent and unfair trade practices
So, SEBI can levy penalty if any intermediary furnishes or files false, incorrect or incomplete information, return, report, books or other documents.
SEBI shall pass an order for charging penalty after holding an inquiry and giving the defaulter a reasonable opportunity of being heard.
So, Investment Advisers and Research Analyst – be serious about compliance of regulations, else SEBI may come knocking at your doors.
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Hi Ma’am,
Is this proposed or put into effect?
Its put into effect.