THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 
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ARRANGEMENT OF SECTIONS 

Last updated: 20-9-2021 
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CHAPTER I 

PRELIMINARY 

SECTIONS 

1.  Short title, extent and commencement. 
2.  Definitions. 

CHAPTER II 

ESTABLISHMENT OF THE SECURITIES AND EXCHANGE BOARD OF INDIA 

3.  Establishment and incorporation of Board. 
4.  Management of the Board. 
5.  Term of office and conditions of service of Chairman and members of the Board. 
6.  Removal of member from office. 
7.  Meetings. 

7A. Member not to participate in meetings in certain cases. 

8.  Vacancies, etc., not to invalidate proceedings of Board. 
9.  Officers and employees of the Board. 

CHAPTER III 

TRANSFER OF ASSETS, LIABILITIES, ETC., OF THE EXISTING SECURITIES AND EXCHANGE BOARD TO THE 
BOARD 

10.  Transfer of assets, liabilities, etc., of existing Securities and Exchange Board to the Board. 

CHAPTER IV 

POWERS AND FUNCTIONS OF THE BOARD 

11.  Functions of Board. 

11A.  Board  to  regulate  or  prohibit  issue  of  prospectus,  offer  document  or  advertisement  soliciting 

money for issue of securities. 

11AA. Collective investment scheme. 

11B. Power to issue directions and levy penalty. 

11C. Investigation. 

11D. Cease and desist proceedings. 

CHAPTER V 

REGISTRATION CERTIFICATE 

12.  Registration of stock-brokers, sub-brokers, share transfer agents, etc. 

CHAPTER VA 

PROHIBITION OF MANIPULATIVE AND DECEPTIVE DEVICES, INSIDER TRADING AND SUBSTANTIAL 
ACQUISITION OF SECURITIES OR CONTROL 

12A. Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition of 

securities or control. 

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CHAPTER VI 
FINANCE, ACCOUNTS AND AUDIT 

SECTIONS 

13.  Grants by the Central Government. 
14.  Fund. 
15.  Accounts and audit. 

CHAPTER VIA 
PENALTIES AND ADJUDICATION 

15A. Penalty for failure to furnish information, return, etc. 
15B. Penalty for failure by any person to enter into agreement with clients. 
15C. Penalty for failure to redress investors’ grievances. 
15D. Penalty for certain defaults in case of mutual funds. 
15E. Penalty for failure to observe rules and regulations by an asset management company. 
15EA. Penalty for default in case of alternative investment funds, infrastructure investment trusts and 

real estate investment trusts. 

15EB. Penalty for default in case of investment adviser and research analyst. 
15F. Penalty for default in case of stock brokers. 
15G. Penalty for insider trading. 
15H. Penalty for non-disclosure of acquisition of shares and takeovers. 
15HA. Penalty for fraudulent and unfair trade practices. 
15HAA.  Penalty  for  alteration,  destruction,  etc.,  of  records  and  failure  to  protect  the  electronic 

database of Board. 

15HB. Penalty for contravention where no separate penalty has been provided. 
15-I. Power to adjudicate. 
15J. Factors to be taken into account while adjudging quantum of penalty. 
15JA. Crediting sums realised by way of penalties to Consolidated Fund of India. 
15JB. Settlement of administrative and civil proceedings. 
CHAPTER VIB 
ESTABLISHMENT, JURISDICTION, AUTHORITY AND PROCEDURE OF APPELLATE TRIBUNAL 

15K. Establishment of Securities Appellate Tribunals. 
15L. Composition of Securities Appellate Tribunal. 
15M. Qualification for appointment as Presiding Officer or Member of Securities Appellate Tribunal. 
15MA. Amendment of Presiding Officer and Judicial Member. 
15MB. Search-cum-Selection Committee for appointment of Technical Members. 
15MC. Vacancy not to invalidate selection proceeding. 
15N. Tenure of office of Presiding Officer and other Members of Securities Appellate Tribunal. 
15-O. Salary and allowances and other terms and conditions of service of Presiding Officers. 
15P. Filling up of vacancies. 
15PA. Member to act as Presiding Officer in certain circumstances. 
15Q. Resignation and removal. 
15QA. Qualifications, terms and conditions of service of Presiding Officer and Member. 
15R. Orders constituting Appellate Tribunal to be final and not to invalidate its proceedings. 
15S. Staff of the Securities Appellate Tribunal. 
15T. Appeal to the Securities Appellate Tribunal. 
15U. Procedure and powers of the Securities Appellate Tribunal. 
15V. Right to legal representation. 
15W. Limitation. 

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SECTIONS 

15X. Presiding Officer, Members and staff of Securities Appellate Tribunals to be public servants. 

15Y. Civil Court not to have jurisdiction. 

15Z. Appeal to Supreme Court. 

CHAPTER VII 

MISCELLANEOUS 

16.  Power of Central Government to issue directions. 
17.  Power of Central Government to supersede the Board. 
18.  Returns and reports. 
19.  Delegation. 
20.  Appeals. 
20A. Bar of jurisdiction 
21.  Savings. 
22.  Members, officers and employees of the Board to be public servants. 
23.  Protection of action taken in good faith. 
24.  Offences. 
24A. Composition of certain offences. 

24B. Power to grant immunity. 
25.  Exemption from tax on wealth and income. 
26.  Cognizance of offences by courts. 
26A. Establishment of Special Courts. 

26B. Offences triable by Special Courts. 

26C. Appeal and revision. 

26D. Application of Code to proceedings before Special Court. 

26E. Transitional provisions. 
27.  Contravention by companies. 
28.  [Omitted.]. 

28A. Recovery of amounts. 
28B. Continuance of proceedings. 

28C. Powers of Board not to apply to International Financial Services Centre. 
29.  Power to make rules. 
30.  Power to make regulations. 
31.  Rules and regulations to be laid before Parliament. 
32.  Application of other laws not barred. 
33.  [Repealed.]. 
34.  Power to remove difficulties. 
34A. Validation of certain acts. 
35.  Repeal and saving. 

THE SCHEDULE. [Repealed.] 

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THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 

ACT NO. 15 OF 1992 

An  Act  to  provide  for  the  establishment  of  a  Board  to  protect  the  interests  of  investors  in 
securities and to promote the development of, and to regulate, the securities market and for 
matters connected therewith or incidental thereto. 

BE it enacted by Parliament in the Forty-third Year of the Republic of India as follows:— 

[4th April, 1992.] 

CHAPTER I 

PRELIMINARY 

1. Short title, extent and commencement.—(1) This Act may be called the Securities and Exchange 

Board of India Act, 1992. 

(2) It extends to the whole of India. 

(3) It shall be deemed to have come into force on the 30th day of January, 1992. 

2. Definitions.—(1) In this Act, unless the context otherwise requires,— 

(a) “Board” means the Securities and Exchange Board of India established under section 3; 

(b) “Chairman” means the Chairman of the Board; 

1[(ba)  “collective  investment  scheme”  means  any  scheme  or  arrangement  which  satisfies  the 

conditions specified in section 11AA;] 

(c) “existing Securities and Exchange Board” means the Securities and Exchange Board of India 
constituted under the Resolution of the Government of India in the Department of Economic Affairs 
No. 1(44)SE/86, dated the 12th day of April, 1988; 

(d) “Fund” means the Fund constituted under section 14;  

2[(da) “Insurance Regulatory and Development Authority” means the Insurance Regulatory and 
Development  Authority  of  India  established  under  sub-section  (1)  of  section  3  of  the  Insurance 
Regulatory and Development Authority Act, 1999 (41 of 1999); 

 (db) “Judicial Member” means a Member of the Securities Appellate Tribunal appointed under 

sub-section (1) of section 15MA and includes the Presiding Officer;] 

(f) “notification” means a notification published in the Official Gazette;  

2[(fa)  “Pension  Fund  Regulatory  and  Development  Authority”  means  the  Pension  Fund 
Regulatory and Development Authority established under sub-section (1) of section 3 of the Pension 
Fund Regulatory and Development Authority Act, 2013 (23 of 2013);] 

(g) “prescribed” means prescribed by rules made under this Act; 

(h) “regulations” means the regulations made by the Board under this Act; 

3[(ha) “Reserve Bank” means the Reserve Bank of India constituted under section 3 of the Reserve 

Bank of India Act, 1934 (2 of 1934);] 

(i) “securities” has the meaning assigned to it in section 2 of the Securities Contracts (Regulation) 

Act, 1956 (41 of 1956).  

2[(j)  “Technical  Member”  means  a  Technical  Member  appointed  under  sub-section  (1)  of             

section 15MB.]  

1. Ins. by Act 31 of 1999, s. 11 (w.e.f. 22-2-2000). 
2. Ins. by Act 7 of 2017, s. 146 (w.e.f. 26-4-2017). 
3. Ins. by Act 59 of 2002, s. 2 (w.e.f. 29-10-2002). 

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1[(2) Words and expressions used and not defined in this Act but defined in 2[the Securities Contracts 
(Regulation) Act, 1956 (42 of 1956) or the Depositories Act, 1996 (22 of 1996)] shall have the meanings 
respectively assigned to them in that Act.] 

CHAPTER II 

ESTABLISHMENT OF THE SECURITIES AND EXCHANGE BOARD OF INDIA 

3.  Establishment  and  incorporation  of  Board.—(1)  With  effect  from  such  date  as  the  Central 
Government may, by notification, appoint, there shall be established, for the purposes of this Act, a Board 
by the name of the Securities and Exchange Board of India. 

(2) The  Board  shall  be  a  body  corporate  by  the  name  aforesaid,  having  perpetual  succession  and  a 
common seal, with power subject to the provisions of this Act, to acquire, hold and dispose of property, 
both movable and immovable, and to contract, and shall, by the said name, sue or be sued. 

(3) The head office of the Board shall be at Bombay. 

(4) The Board may establish offices at other places in India. 

4. Management of the Board.—(1) The Board shall consist of the following members, namely:— 

(a) a Chairman; 

(b) two members from amongst the officials of the 3[Ministry] of the Central Government dealing 

with Finance 4[and administration of the Companies Act, 1956 (1 of 1956)]; 

(c) one member from amongst the officials of 5[the Reserve Bank]; 

6[(d) five other members of whom at least three shall be the whole-time members,] 

to be appointed by the Central Government. 

(2) The general superintendence, direction and management of the affairs of the Board shall vest in a 
Board of members, which may exercise all powers and do all acts and things which may be exercised or 
done by the Board. 

(3)  Save  as  otherwise  determined  by  regulations,  the  Chairmen  shall  also  have  powers  of  general 
superintendence and direction of the affairs of the Board and may also exercise all powers and do all acts 
and things which may be exercised or done by that Board. 

(4) The Chairman and members referred to in clauses (a) and (d) of sub-section (1) shall be appointed 
by the Central Government and the members referred to in clauses (b) and (c) of that sub-section shall be 
nominated by the Central Government and the 7[Reserve Bank] respectively. 

(5) The Chairman and the other members referred to in clauses (a) and (d) of sub-section (1) shall be 
persons of ability, integrity and standing who have shown capacity in dealing with problems relating to 
securities  market  or  have  special  knowledge  or  experience  of  law,  finance,  economics,  accountancy, 
administration or in any other discipline which, in the opinion of the Central Government, shall be useful 
to the Board. 

5. Term of office and conditions of service of Chairman and members of the Board.—(1) The 
term of office and other conditions of service of the Chairman and the members referred to in clause (d) 
of sub-section (1) of section 4 shall be such as may be prescribed. 

(2)  Notwithstanding  anything  contained  in  sub-section  (1),  the  Central  Government  shall  have  the 
right to terminate the services of the Chairman or a member appointed under clause (d) of sub-section (1) 

1. Subs. by Act 9 of 1995, s. 2, for sub-section (2) (w.e.f. 25-1-1995). 
2.  Subs.  by  Act  22  of  1996,  s.  30  and  the  Schedule,  for  “the  Securities  Contracts  (Regulation)  Act,  1956  (42  of  1956)”          

(w.e.f. 20-9-1995). 

3. Subs. by Act 59 of 2002, s. 3, for “Ministries” (w.e.f. 29-10-2002). 
4. Subs. by s. 3, ibid., for “and Law” (w.e.f. 29-10-2002). 
5.  Subs.  by  s.  3,  ibid.,  for  “the  Reserve  Bank  of  India  constituted  under  section  3  of  the  Reserve  Bank  of  India  Act,  1934                

(2 of 1934)” (w.e.f. 29-10-2002). 

6. Subs. by s. 3, ibid., for clause (d) (w.e.f. 29-10-2002). 
7. Subs. by s. 3, ibid., for “Reserve Bank of India” (w.e.f. 29-10-2002). 

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of section 4, at any time before the expiry of the period prescribed under sub-section (1), by giving him 
notice of not less than three months in writing or three months’ salary and allowances in lieu thereof, and 
the Chairman or a member, as the case may be, shall also have the right to relinquish his office, at any 
time  before  the  expiry  of  the  period  prescribed  under  sub-section  (1),  by  giving  to  the  Central 
Government notice of not less than three months in writing. 

6. Removal of member from office.—1*** The Central Government shall remove a member from 

office if he— 

(a) is, or at any time has been, adjudicated as insolvent; 

(b) is of unsound mind and stands so declared by a competent court; 

(c) has been convicted of an offence which, in the opinion of the Central Government, involves a 

moral turpitude; 

2* 

* 

* 

* 

* 

(e)  has,  in  the  opinion  of  the  Central  Government,  so  abused  his  position  as  to  render  his 

continuation in office detrimental to the public interest: 

Provided  that  no  member  shall  be  removed  under  this  clause  unless  he  has  been  given  a 

reasonable opportunity of being heard in the matter. 

7.  Meetings.—(1)  The  Board  shall  meet  at  such  times  and  places,  and  shall  observe  such  rules  of 
procedure in regard to the transaction of business at its meetings (including quorum at such meetings) as 
may be provided by regulation. 

(2)  The  Chairman  or,  if  for  any  reason,  he  is  unable  to  attend  a  meeting  of  the  Board,  any  other 
member  chosen  by  the  members  present  from  amongst  themselves  at  the  meeting  shall  preside  at  the 
meeting. 

(3)  All  questions  which  come  up  before  any  meeting  of  the  Board  shall  be  decided  by  a  majority 
votes of the members present and voting, and, in the event of an equality of votes, the Chairman, or in his 
absence, the person presiding, shall have a second or casting vote. 

3[7A. Member not to participate in meetings in certain cases.—Any member, who is a director of 
a company and who as such director has any direct or indirect pecuniary interest in any matter coming up 
for consideration at a meeting of the Board, shall, as soon as possible after relevant circumstances have 
come to his knowledge, disclose the nature of his interest at such meeting and such disclosure shall be 
recorded in the proceedings of the Board, and the member shall not take any part in any deliberation or 
decision of the Board with respect to that matter.] 

8.  Vacancies,  etc.,  not  to  invalidate  proceedings  of  Board.—No  act  or  proceeding  of  the  Board 

shall be invalid merely by reason of— 

(a) any vacancy in, or any defect in the constitution of, the Board; or 

(b) any defect in the appointment of a person acting as a member of the Board; or 

(c) any irregularity in the procedure of the Board not affecting the merits of the case. 

9.  Officers  and  employees  of  the  Board.—(1)  The  Board  may  appoint  such  other  officers  and 

employees as it considers necessary for the efficient discharge of its functions under this Act. 

(2) The term and other conditions of service of officers and employees of the Board appointed under 

sub-section (1) shall be such as may be determined by regulations. 

1. The brackets and figure “(1)” omitted by Act 9 of 1995, s. 3 (w.e.f. 25-1-1995). 
2. Clause (d) omitted by Act 9 of 1995, s. 3 (w.e.f. 25-1-1995). 
3. Ins. by s. 4, ibid. (w.e.f. 25-1-1995). 

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CHAPTER III 

TRANSFER OF ASSETS, LIABILITIES, ETC., OF THE EXISTING SECURITIES AND EXCHANGE BOARD TO THE 
BOARD 

10. Transfer of assets, liabilities, etc., of existing Securities and Exchange Board to the Board.—

(1) On and from the date of establishment of the Board,— 

(a) any reference to the existing Securities and Exchange Board in any law other than this Act or 

in any contract or other instrument shall be deemed as a reference to the Board; 

(b) all properties and assets, movable and immovable, of, or belonging to, the existing Securities 

and Exchange Board, shall vest in the Board; 

(c) all rights and liabilities of the existing Securities and Exchange Board shall be transferred to, 

and be the rights and liabilities of, the Board; 

(d) without prejudice to the provisions of clause (c), all debts, obligations and liabilities incurred, 
all contracts entered into and all matters and things engaged to be done by, with or for the existing 
Securities and Exchange Board immediately before that date, for or in connection with the purpose of 
the said existing Board shall be deemed to have been incurred, entered into or engaged to be done by, 
with or for, the Board; 

(e) all sums of money due to the existing Securities and Exchange Board immediately before that 

date shall be deemed to be due to the Board; 

(f)  all  suits  and  other  legal  proceedings  instituted  or  which  could  have  been  instituted  by  or 
against the existing Securities and Exchange Board immediately before that date may be continued or 
may be instituted by or against the Board; and 

(g)  every  employee  holding  any  office  under  the  existing  Securities  and  Exchange  Board 
immediately before that date shall hold his office in the Board by the same tenure and upon the same 
terms and conditions of service as respects remuneration, leave, provident fund, retirement and other 
terminal benefits as he would have held such office if the Board had not been established and shall 
continue to do so as an employee of the Board or until the expiry of the period of six months from 
that date if such employee opts not to be the employee of the Board within such period. 

(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or in any 
other law for the time being in force, absorption of any employee by the Board in its regular service under 
this section shall not entitle such employee to any compensation under that Act or other law and no such 
claim shall be entertained by any court, tribunal or other authority. 

CHAPTER IV 

POWERS AND FUNCTIONS OF THE BOARD 

11. Functions of Board.—(1) Subject to the provisions of this Act, it shall be the duty of the Board 
to protect the interests of investors in securities and to promote the development of, and to regulate the 
securities market, by such measures as it thinks fit. 

(2) Without prejudice to the generality of the foregoing provisions, the measures referred to therein 

may provide for— 

(a) regulating the business in stock exchanges and any other securities markets; 

(b)  registering  and  regulating  the  working  of  stock  brokers,  sub-brokers,  share  transfer  agents, 
bankers  to  an  issue,  trustees  of  trust  deeds,  registrars  to  an  issue,  merchant  bankers,  underwriters, 
portfolio  managers,  investment  advisers  and  such other  intermediaries  who  may  be  associated  with 
securities markets in any manner; 

1[(ba)  registering  and  regulating  the  working  of  the  2[depositories,  participants,  custodians]  of 
securities, foreign institutional investors, credit rating agencies and such other intermediaries as the 
Board may, by notification, specify in this behalf;] 

1. Ins. by Act 9 of 1995, s. 5 (w.e.f. 25-1-1995). 
2. Subs. by Act 22 of 1996, s. 30 and the Schedule, for “depositories, custodians” (w.e.f. 20-9-1995). 

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(c)  registering  and  regulating  the  working  of  1[venture  capital  funds  and  collective  investment 

schemes], including mutual funds; 

(d) promoting and regulating self-regulatory organisations; 

(e) prohibiting fraudulent and unfair trade practices relating to securities markets; 

(f) promoting investors' education and training of intermediaries of securities markets; 

(g) prohibiting insider trading in securities; 

(h) regulating substantial acquisition of shares and take-over of companies; 

(i)  calling  for  information  from,  undertaking  inspection,  conducting  inquiries  and  audits  of  the 
2[stock exchanges, mutual funds, other persons associated with the securities market] intermediaries 
and self-regulatory organisations in the securities market; 

3[(ia)  calling  for  information  and  records  from  any  person  including  any  bank  or  any  other 
authority  or  board  or  corporation  established  or  constituted  by  or  under  any  Central  or  State  Act 
which, in the opinion of the Board, shall be relevant to any investigation or inquiry by the Board in 
respect of any transaction in securities;] 

4[(ib)  calling  for  information  from,  or  furnishing  information  to,  other  authorities,  whether  in 
India or outside India, having functions similar to those of the Board, in the matters relating to the 
prevention or detection of violations in respect of securities laws, subject to the provisions of other 
laws for the time being in force in this regard: 

Provided that the Board, for the purpose of furnishing any information to any authority outside 
India,  may  enter  into  an  arrangement  or  agreement  or  understanding  with  such  authority  with  the 
prior approval of the Central Government;] 

(j)  performing  such  functions  and  exercising  such  powers  under  the  provisions  of  5***  the 
Securities  Contracts  (Regulation)  Act,  1956  (42  of  1956),  as  may  be  delegated  to  it  by  the  Central 
Government; 

(k) levying fees or other charges for carrying out the purposes of this section; 

(l) conducting research for the above purposes; 

6[(la)  calling  from  or  furnishing  to  any  such  agencies,  as  may  be  specified  by  the  Board,  such 

information as may be considered necessary by it for the efficient discharge of its functions;] 

(m) performing such other functions as may be prescribed. 

7[(2A) Without prejudice to the provisions contained in sub-section (2), the Board may take measures 
to undertake inspection of any book, or register, or other document or record of any listed public company 
or a public company (not being intermediaries referred to in section 12) which intends to get its securities 
listed  on  any  recognised  stock  exchange  where  the  Board  has  reasonable  grounds  to  believe  that  such 
company  has  been  indulging  in  insider  trading  or  fraudulent  and  unfair  trade  practices  relating  to 
securities market.] 

8[(3) Notwithstanding anything contained in any other law for the time being in force while exercising 
the powers under  9[clause (i) or clause (ia) of sub-section (2) or sub-section (2A)], the Board shall have 
the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while 
trying a suit, in respect of the following matters, namely:— 

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

time as may be specified by the Board; 

1. Subs. by Act 9 of 1995, s. 5, for “collective investment schemes” (w.e.f. 25-1-1995). 
2. Subs. by s. 5, ibid., for “stock exchanges and” (w.e.f. 25-1-1995). 
3. Subs. by Act 27 of 2014, s. 2, for clause (ia) (w.e.f. 18-7-2013).  
4. Ins. by s. 2, ibid. (w.e.f. 6-3-1998). 
5.  The  words,  brackets  and  figures  “the  Capital  Issues  (Control)  Act,  1947  (29  of  1947)  and”  omitted  by  Act  9  of  1995,  s.  5 

(w.e.f. 25-1-1995). 

6. Ins. by s. 5, ibid. (w.e.f. 25-1-1995). 
7. Ins. by Act 59 of 2002, s. 4 (w.e.f. 29-10-2002). 
8. Ins. by Act 9 of 1995, s. 5 (w.e.f. 25-1-1995). 
9. Subs. by Act 59 of 2002, s. 4, for “clause (i) of sub-section (2)” (w.e.f. 29-10-2002). 

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(ii) summoning and enforcing the attendance of persons and examining them on oath; 
(iii)  inspection  of  any  books,  registers  and  other  documents  of  any  person  referred  to  in           

section 12, at any place;] 

1[(iv) inspection of any book, or register, or other document or record of the company referred to 

in sub-section (2A); 

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

1[(4)  Without  prejudice  to  the  provisions  contained  in  sub-sections  (1),  (2),  (2A)  and  (3)  and         

section 11B, the Board may, by an order, for reasons to be recorded in writing, in the interests 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; 

2[(e)  attach,  for  a  period  not  exceeding  ninety  days,  bank  accounts  or  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 the regulations made thereunder: 

Provided that the Board shall, within ninety days of the said attachment, obtain confirmation of 
the said attachment from the Special Court, established under section 26A, having jurisdiction and on 
such confirmation, such attachment shall continue during the pendency of the aforesaid proceedings 
and on conclusion of the said proceedings, the provisions of section 28A shall apply: 

Provided further that only property, bank account or accounts or any transaction entered therein, 
so far as if related to the proceeds actually involved in violation of any of the provisions of this Act, 
or the rules or the regulations made thereunder shall be allowed to be attached.] 

(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: 

Provided that the Board may, without prejudice to the provisions contained in sub-section (2) or 
sub-section (2A), take any of the measures specified in clause (d) or clause (e) or clause (f), in respect 
of any listed public company or a public company (not being intermediaries referred to in section (2) 
which  intends  to  get  its  securities  listed  on  any  recognised  stock  exchange  where  the  Board  has 
reasonable grounds to believe that such company has been indulging in insider trading or fraudulent 
and unfair trade practices relating to securities market: 

Provided  further  that  the  Board  shall,  either  before  or  after  passing  such  orders,  give  an 

opportunity of hearing to such intermediaries or persons concerned.] 

3[(4A) Without prejudice to the provisions contained in sub-sections (1), (2), (2A), (3) and (4), section 11B and section 
15-I, the Board may, by an order, for reasons to be recorded in writing, levy penalty under sections 15A, 15B, 15C, 15D, 
15E, 15EA, 15EB, 15F, 15G, 15H, 15HA and 15HB after holding an inquiry in the prescribed manner.] 
4[(5)  The  amount  disgorged,  pursuant  to  a  direction  issued,  under  section  11B  of  this  Act  or                

section  12A  of  the  Securities  Contracts  (Regulation)  Act,  1956  (42  of  1956)  or  section  19  of  the 
Depositories Act, 1996 (22 of 1996),  2[or under a settlement  made  under section 15JB or section 23JA of the 
Securities  Contracts  (Regulation)  Act,  1956  (42  of  1956)  or  section  19-IA  of  the  Depositories  Act,  1996  (22  of 
1996)] as the case may be, shall be credited to the Investor Protection and Education Fund established by 
the Board and such amount shall be utilised by the Board in accordance with the regulations made under 
this Act.] 

 5[  6[11A.  Board  to  regulate  or  prohibit  issue  of  prospectus,  offer  document  or  advertisement 
soliciting money for issue of securities.—(1) Without prejudice to the provisions of the Companies Act, 
1956 (1 of 1956), the Board may, for the protection of investors,— 

(a) specify, by regulations— 

1. Ins. by Act 59 of 2002, s. 4 (w.e.f. 29-10-2002). 
2. Subs. by Act 21 of 2019, s. 42 and the Second Schedule, for clause (e) (w.e.f. 21-2-2019). 
3. Ins. by Act 13 of 2018, s. 179 (w.e.f. 8-3-2019). 
4. Ins. by Act 27 of 2014, s. 2 (w.e.f. 18-7-2013). 
5. Ins. by Act 9 of 1995, s. 6 (w.e.f. 25-1-1995). 
6. Subs. by Act 59 of 2002, s. 5, for section 11A (w.e.f. 29-10-2002). 

9 

 
                                                           
(i) the matters relating  to issue of capital, transfer of securities and other matters incidental 

thereto; and 

(ii) the manner in which such matters shall be disclosed by the companies; 

(b) by general or special orders— 

(i)  prohibit  any  company  from  issuing  prospectus,  any  offer  document,  or  advertisement 

soliciting money from the public for the issue of securities; 

(ii)  specify  the  conditions  subject  to  which  the  prospectus,  such  offer  document  or 

advertisement, if not prohibited, may be issued. 

(2) Without prejudice to the provisions of section 21 of the Securities Contracts (Regulation) Act, 
1956 (42 of 1956), the Board may specify the requirements for listing and transfer of securities and other 
matters incidental thereto.] 

1[11AA.  Collective  investment  scheme.—(1) Any  scheme  or  arrangement which  satisfies  the 
conditions referred to in sub-section (2) 2[or sub-section (2A)] shall be a collective investment scheme: 

2[Provided that any pooling of funds under any scheme or arrangement, which is not registered with 
the Board 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 3[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. 

2[(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 this Act.] 

(3) Notwithstanding  anything  contained  in  sub-section  (2)  2[or  sub-section  (2A)],  any  scheme or 

arrangement— 

(i) made  or  offered  by  a  cooperative  society  registered  under  the Co-operative  Societies  Act, 
1912 (2 of 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 (2 of 1934); 

(iii) being a contract of insurance to which the Insurance Act, 1938 (4 of 1938), applies; 

(iv) providing  for  any  scheme,  pension  scheme  or  the  insurance  scheme framed  under  the 

Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952); 

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

(1 of 1956); 

(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 (1 of 1956); 

(vii) falling within the meaning of chit business as defined in clause (e) of section 2 of the Chit 

Funds Act, 1982 (40 of 1982); 

1. Ins. by Act 31 of 1999, s. 11 (w.e.f. 22-2-2000). 
2. Ins. by Act 27 of 2014, s. 3 (w.e.f. 18-7-2013). 
3. Subs. by s. 3, ibid., for “company” (w.e.f. 18-7-2013). 

10 

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

1[(ix) such other scheme or arrangement which the Central Government may, in consultation with 

the Board, notify,] 

shall not be a collective investment scheme.] 

11B. Power to issue directions 2[and a levy penalty].—3[(1)] Save as otherwise provided in section 

11, if after making or causing to be made an enquiry, the Board is satisfied that it is necessary— 
(i) in the interest of investors, or orderly development of securities market; or 
(ii)  to  prevent  the  affairs  of  any  intermediary  or  other  persons  referred  to  in  section  12  being 

conducted in a manner detrimental to the interests of investors or securities market; or 

(iii) to secure the proper management of any such intermediary or person, 

it may issue such directions,— 

(a)  to  any  person  or  class of  persons referred  to in section 12, or associated  with the  securities 

market; or 

(b) to any company in respect of matters specified in section 11A, 

as may be appropriate in the interests of investors in securities and the securities market.] 

4[Explanation.—For  the  removal  of  doubts,  it  is  hereby  declared  that  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.] 

5[(2) Without prejudice to the provisions contained in sub-section (1), sub-section (4A) of section 11 
and section 15-I, the Board may, by an order, for reasons to be recorded in writing, levy penalty under 
sections  15A,  15B,  15C,  15D,  15E,  15EA,  15EB,  15F,  15G,  15H,  15HA  and  15HB  after  holding  an 
inquiry in the prescribed manner. ] 

6[11C. Investigation.—(1) Where the Board 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  the  Board 
thereunder, 

it  may,  at  any  time  by  order  in  writing,  direct  any  person  (hereafter  in  this  section  referred  to  as  the 
Investigating Authority) specified in the order to investigate the affairs of such intermediary or persons 
associated with the securities market and to report thereon to the Board. 

(2)  Without  prejudice  to  the  provisions  of  sections  235  to  241  of  the  Companies  Act,  1956                    

(1 of 1956), it shall be the duty of every manager, managing director, officer and other employee of the 
company and every intermediary referred to in section 12 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. 

(3) 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 it 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. 

(4) The  Investigating  Authority  may  keep  in  its  custody  any  books,  registers,  other  documents  and 
record  produced  under  sub-section  (2)  or  sub-section  (3)  for  six  months  and  thereafter  shall  return  the 
same to any intermediary or any person associated with securities market by whom or on whose behalf 
the books, registers, other documents and record are produced: 

1. Ins. by Act 27 of 2014, s. 3 (w.e.f. 18-7-2013). 
2. Ins. by Act 13 of 2018, s. 180 (w.e.f. 8-3-2019). 
3. Section 11B renumbered as sub-section (1) thereof by s. 180, ibid. (w.e.f. 8-3-2019). 
4. Ins. by Act 27 of 2014, s. 4 (w.e.f. 18-7-2013). 
5. Ins. by Act 13 of 2018, s. 180 (w.e.f. 8-3-2019). 
6. Ins. by Act 59 of 2002, s. 6 (w.e.f. 29-10-2002). 

11 

 
                                                           
Provided that the Investigating Authority may call for any book, register, other document and record 

if they are needed again: 

Provided further that if the person on whose behalf the books, registers, other documents and record 
are produced requires certified copies of the books, registers, other documents and record produced before 
the  Investigating  Authority,  it  shall  give  certified  copies  of  such  books,  registers,  other  documents  and 
record to such person or on whose behalf the books, registers, other documents and record were produced. 

(5) Any person, directed to make an investigation under sub-section (1), may examine on oath, any 
manager,  managing  director,  officer  and  other  employee  of  any  intermediary  or  any  person  associated 
with securities market in any manner, in relation to the affairs of his business and may administer an oath 
accordingly and for that purpose may require any of those persons to appear before it personally. 

(6) If any person fails without reasonable cause or refuses— 

(a)  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 under sub-section (2) or sub-section (3) to 
produce; or 

(b) to furnish any information which is his duty under sub-section (3) to furnish; or 

(c)  to  appear  before  the  Investigating  Authority  personally  when  required  to  do  so  under                     

sub-section  (5)  or  to  answer  any  question  which  is  put  to  him  by  the  Investigating  Authority  in 
pursuance of that sub-section; or 

(d) to sign the notes of any examination referred to in sub-section (7), 

 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. 

(7) Notes of any examination under sub-section (5) shall be taken down in writing and shall be read 

over to, or by, and signed by, the person examined, and may thereafter be used in evidence against him. 

(8) Where in the course of investigation, the Investigating Authority has reasonable ground to believe 
that the  books, registers,  other  documents and record  of,  or  relating  to,  any  intermediary  or  any  person 
associated  with  securities  market  in  any  manner,  may  be  destroyed,  mutilated,  altered,  falsified  or 
secreted,  the  Investigating  Authority  may  make  an  application  to  1[the  Magistrate  or  Judge  of  such 
designated court in Mumbai, as may be notified by the Central Government] for an order for the seizure 
of such books, registers, other documents and record. 

2[(8A) The authorised officer may requisition the services of any police officer or any officer of the 
Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (8) 
and it shall be the duty of every such officer to comply with such requisition.] 

(9)  After  considering  the  application  and  hearing  the  Investigating  Authority,  if  necessary,  3[the 

Magistrate or Judge of the Designated Court] may, by order, authorise the Investigating Authority— 

(a)  to  enter,  with  such  assistance,  as  may  be  required,  the  place  or  places  where  such  books, 

registers, other documents and record are kept; 

(b) to search that place or those places in the manner specified in the order; and 

(c) to seize books, registers, other documents and record, it considers necessary for the purposes 

of the investigation: 

Provided  that  3[the  Magistrate  or  Judge  of  the  Designated  Court]  shall  not  authorise  seizure  of 
books, registers, other documents and record, of any listed public company or a public company (not 
being the intermediaries specified under section 12) which intends to get its securities listed on any 
recognised stock exchange unless such company indulges in insider trading or market manipulation. 

(10) 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 

1. Subs. by Act 27 of 2014, s. 5, for “the Judicial Magistrate of the first class having jurisdiction” (w.e.f. 18-7-2013). 
2. Ins. by s. 5, ibid. (w.e.f. 28-3-2014). 
3. Subs. by s. 5, ibid., for “the Magistrate” (w.e.f. 18-7-2013). 

12 

 
                                                           
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 1[the Magistrate or Judge of the Designated Court] of such return: 

Provided  that  the  Investigating  Authority  may,  before  returning  such  books,  registers,  other 

documents and record as aforesaid, place identification marks on them or any part thereof. 

(11) Save as otherwise provided in this section, every search or seizure made under this section shall 
be  carried  out  in  accordance  with  the  provisions  of  the  Code  of  Criminal  Procedure,  1973  (2  of  1974) 
relating to searches or seizures made under that Code. 

11D. Cease and desist proceedings.—If the Board finds, after causing an inquiry to be made, that 
any person has violated, or is likely to violate, any provisions of this Act, or any rules or regulations made 
thereunder,  it  may  pass  an  order requiring  such  person  to  cease  and  desist from  committing  or  causing 
such violation: 

Provided that the Board shall not pass such order in respect of any listed public company or a public 
company  (other  than  the  intermediaries  specified  under  section  12)  which  intends  to  get  its  securities 
listed  on  any  recognised  stock  exchange  unless  the  Board  has  reasonable  grounds  to  believe  that  such 
company has indulged in insider trading or market manipulation.] 

CHAPTER V 
REGISTRATION CERTIFICATE 

12. Registration of stock-brokers, sub-brokers, share transfer agents, etc.—(1) No stock-broker, 
sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant 
banker,  underwriter,  portfolio  manager,  investment  adviser  and  such  other  intermediary  who  may  be 
associated with securities market shall buy, sell or deal in securities except under, and in accordance with, 
the  conditions  of  a  certificate  of  registration  obtained  from  the  Board  in  accordance  with  the 
2[regulations] made under this Act: 

Provided that a person buying or selling securities or otherwise dealing with the securities market as a 
stock-broker,  sub-broker,  share  transfer  agent,  banker  to  an  issue,  trustee  of  trust  deed,  registrar  to  an 
issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary 
who  may  be  associated  with  securities  market  immediately  before  the  establishment  of  the  Board  for 
which no registration certificate was necessary prior to such establishment, may continue to do so for a 
period  of  three  months  from  such  establishment  or,  if  he  has  made  an  application  for  such  registration 
within the said period of three months, till the disposal of such application: 

3[Provided further that any certificate of registration, obtained immediately before the commencement 
of the Securities Laws (Amendment) Act, 1995 (9 of 1995), shall be deemed to have been obtained from 
the Board in accordance with the regulations providing for such registration.] 

3[(1A) No 4[depository, participant, custodian] of securities, foreign institutional investor, credit rating 
agency or any other intermediary associated with the securities market as the Board may by notification in 
this  behalf  specify,  shall  buy  or  sell  or  deal  in  securities  except  under  and  in  accordance  with  the 
conditions of a certificate of registration obtained from the Board in accordance with the regulations made 
under this Act: 

Provided that a person buying or selling securities or otherwise dealing with the securities market as a 
4[depository,  participant,  custodian]  of  securities,  foreign  institutional  investor  or  credit  rating  agency 
immediately before the commencement of the Securities Laws (Amendment) Act, 1995 (9 of 1995), for 
which no certificate of registration was required prior to such commencement, may continue to buy or sell 
securities or otherwise deal with the securities market until such time regulations are made under clause 
(d) of sub-section (2) of section 30. 

(1B)  No  person  shall  sponsor  or  cause  to  be  sponsored  or  carry  on  or  cause  to  be  carried  on  any 
venture  capital  funds  or  collective  investment  scheme  including  mutual  funds,  unless  he  obtains  a 
certificate of registration from the Board in accordance with the regulations: 

Provided that any person sponsoring or causing to be sponsored, carrying or causing to be carried on 
any venture capital funds or collective investment scheme operating in the securities market immediately 

1. Subs. by Act 27 of 2014, s. 5, for “the Judicial Magistrate of the first class having jurisdiction” (w.e.f. 18-7-2013). 
2. Subs. by Act 9 of 1995, s. 7, for “rules” (w.e.f. 25-1-1995). 
3. Ins. by s. 7, ibid. (w.e.f. 25-1-1995). 
4. Subs. by Act 22 of 1996, s. 30 and the Schedule, for “depository, custodian” (w.e.f. 20-9-1995). 

13 

 
                                                           
before  the  commencement  of  the  Securities  Laws  (Amendment)  Act,  1995  (9  of  1995)  for  which  no 
certificate  of  registration  was  required  prior  to  such  commencement,  may  continue  to  operate  till  such 
time regulations are made under clause (d) of sub-section (2) of section 30.] 

1[(IC)  No  person  shall  sponsor  or  cause  to  be  sponsored  or  carry  on  or  cause  to  be  carried  on  the 
activity of an alternative investment fund or a business trust as defined in clause (13A) of section 2 of the 
Income-tax  Act,  1961  (43  of  1961),  unless  a  certificate  or  registration  is  granted  by  the  Board  in 
accordance with the regulations made under this Act.] 

2[Explanation.—For the removal of doubts, it is hereby declared that, for the purposes of this section, 
a collective investment scheme or mutual fund shall not include any unit linked insurance policy or scrips 
or  any  such  instrument  or  unit,  by  whatever  name  called,  which  provides  a  component  of  investment 
besides the component of insurance issued by an insurer.] 

(2) Every application for registration shall be in such manner and on payment of such fees as may be 

determined by regulations. 

(3) The Board may, by order, suspend or cancel a certificate of registration in such manner as may be 

determined by regulations: 

Provided  that  no  order  under  this  sub-section  shall  be  made  unless  the  person  concerned  has  been 

given a reasonable opportunity of being heard. 

3[CHAPTER VA 
PROHIBITION OF MANIPULATIVE AND DECEPTIVE DEVICES, INSIDER TRADING AND SUBSTANTIAL 
ACQUISITION OF SECURITIES OR CONTROL 

12A.  Prohibition  of  manipulative  and  deceptive  devices,  insider  trading  and  substantial 

acquisition of securities or control.—No person shall directly or indirectly— 

(a)  use  or  employ,  in  connection  with  the  issue,  purchase  or  sale  of  any  securities  listed  or 
proposed  to  be  listed  on  a  recognised  stock  exchange,  any  manipulative  or  deceptive  device  or 
contrivance  in  contravention  of  the  provisions  of  this  Act  or  the  rules  or  the  regulations  made 
thereunder; 

(b)  employ  any  device,  scheme  or  artifice  to  defraud  in  connection  with  issue  or  dealing  in 

securities which are listed or proposed to be listed on a recognised stock exchange; 

(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  securities  which  are  listed  or 
proposed to be listed on a recognised stock exchange, in contravention of the provisions of this Act or 
the rules or the regulations made thereunder; 

(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 this Act or the rules or the regulations made thereunder; 

(f) acquire control of any company or securities more than the percentage of equity share capital 
of a company whose securities are listed or proposed to be listed on a recognised stock exchange in 
contravention of the regulations made under this Act.] 

CHAPTER VI 
FINANCE, ACCOUNTS AND AUDIT 

13.  Grants  by  the  Central  Government.—The  Central  Government  may,  after  due  appropriation 
made  by  Parliament  by  law  in  this  behalf,  make  to  the  Board  grants  of  such  sums  of  money  as  that 
Government may think fit for being utilised for the purposes of this Act. 

14. Fund.—(1) There shall be constituted a Fund to be called the Securities and Exchange Board of 

India General Fund and there shall be credited thereto— 

(a) all grants, fees and charges received by the Board under this Act; 4*** 

5* 

* 

* 

* 

* 

1. Ins. by Act 13 of 2021, s. 159 (w.e.f. 1-4-2021). 
2. Ins. by Act 26 of 2010, s. 4 (w.e.f. 9-4-2010). 
3. Ins. by Act 59 of 2002, s. 7 (w.e.f. 29-10-2002). 
4. The word “and” omitted by Act 9 of 1995, s. 8 (w.e.f. 25-1-1995). 
5. Clause (aa) omitted by Act 59 of 2002, s. 8 (w.e.f. 29-10-2002).  

14 

 
 
 
 
 
 
 
 
 
                                                           
(b)  all  sums  received  by  the  Board  from  such  other  sources  as  may  be  decided  upon  by  the 

Central Government. 

(2) The Fund shall be applied for meeting— 

(a) the salaries, allowances and other remuneration of the members, officers and other employees 

of the Board; 

(b) the expenses of the Board in the discharge of its functions under section 11; 
(c) the expenses on objects and for purposes authorised by this Act. 

15. Accounts and audit.—(1) The Board shall maintain proper accounts and other relevant records 
and  prepare  an  annual  statement  of  accounts  in  such  form  as  may  be  prescribed  by  the  Central 
Government in consultation with the Comptroller and Auditor-General of India. 

(2) The accounts of the Board shall be audited by the Comptroller and Auditor-General of India at 
such  intervals  as  may  be  specified  by  him  and  any  expenditure  incurred  in  connection  with  such  audit 
shall be payable by the Board to the Comptroller and Auditor-General of India. 

(3)  The  Comptroller  and  Auditor-General  of  India  and  any  other  person  appointed  by  him  in 
connection  with  the  audit  of  the  accounts  of  the  Board  shall  have  the  same  rights  and  privileges  and 
authority  in  connection  with  such  audit  as  the  Comptroller  and  Auditor-General  generally  has  in 
connection with the audit of the Government accounts and, in particular, shall have the right to demand 
the  production  of  books,  accounts,  connected  vouchers  and  other  documents  and  papers  and  to  inspect 
any of the offices of the Board. 

(4) The accounts  of  the  Board as certified by  the  Comptroller and  Auditor-General  of  India  or  any 
other  person  appointed  by  him  in  this  behalf  together  with  the  audit  report  thereon  shall  be  forwarded 
annually  to  the  Central  Government  and  that  Government  shall  cause  the  same  to  be  laid  before  each 
House of Parliament. 

1[CHAPTER VIA 
PENALTIES AND ADJUDICATION 

15A. Penalty for failure to furnish information, return, etc.—If any person, who is required under 

this Act or any rules or regulations made thereunder,— 

(a)  to  furnish  any  document,  return  or  report  to  the  Board,  fails  to  furnish  the  same,  2[or  who 
furnishes or files false, incorrect or incomplete information, return, report, books or other documents] 
he shall be liable to 3[a penalty 4[which shall not be less than one lakh rupees but which may extend to 
one lakh rupees for each day during which such failure continues subject to a maximum of one crore 
rupees]]; 

(b)  to  file  any  return  or  furnish  any  information,  books  or  other  documents  within  the  time 
specified therefor in the regulations, fails to file return or furnish the same within the time specified 
therefor  in  the  regulations  2[or  who  furnishes  or  files  false,  incorrect  or  incomplete  information, 
return, report, books or other documents], he shall be liable to  5[a penalty  3[which shall not be less 
than one lakh rupees but which may extend to one lakh rupees for each day during which such failure 
continues subject to a maximum of one crore rupees]]; 

(c) to maintain books of account or records, fails to maintain the same, he shall be liable to  6[a 
penalty  3[which shall not be less than one lakh rupees but which may extend to one lakh rupees for 
each day during which such failure continues subject to a maximum of one crore rupees]]. 
15B. Penalty for failure by any person to enter into agreement with clients.—If any person, who 
is registered as an intermediary and is required under this Act or any rules or regulations made thereunder 
to  enter  into  an  agreement  with  his  client,  fails  to  enter  into  such  agreement,  he  shall  be  liable  to  7[a 

1. Ins. by Act 9 of 1995, s. 9 (w.e.f. 25-1-1995). 
2. Ins. by Act 13 of 2018, s. 181 (w.e.f. 8-3-2019). 
3.  Subs.  by  Act  59  of  2002,  s.  9,  for  “a  penalty  not  exceeding  one  lakh  and  fifty  thousand  rupees  for  each  such  failure”                   

(w.e.f. 29-10-2002). 

4. Subs. by Act 27 of 2014, s. 6, for certain words (w.e.f. 8-9-2014). 
5.  Subs.  by  Act  59  of  2002,  s.  9,  for  “a  penalty  not  exceeding  five  thousand  rupees  for  every  day  during  which  such  failure 

continues” (w.e.f. 29-10-2002). 

6.  Subs.  by  s.  9,  ibid.,  for  “a  penalty  not  exceeding  ten  thousand  rupees  for  every  day  during  which  such  failure  continues”   

(w.e.f. 29-10-2002). 

7. Subs. by s. 10, ibid., for “a penalty not exceeding five lakh rupees for every such failure” (w.e.f. 29-10-2002). 

15 

 
                                                           
penalty 1[which shall not be less than one lakh rupees but which may extend to one lakh rupees for each 
day during which such failure continues subject to a maximum of one crore rupees]]. 

2[15C. Penalty for failure to redress investors’ grievances.—If any listed company or any person 
who  is  registered  as  an  intermediary,  after  having  been  called  upon  by  the  Board  in  writing 
3[including by any means of electronic communication], to redress the grievances of investors, fails 
to redress such grievances within the time specified by the Board, such company or intermediary 
shall be liable to a penalty  4[which shall not be less than one lakh rupees but which may extend to 
one  lakh  rupees  for  each  day  during  which  such  failure  continues  subject  to  a  maximum  of  one 
crore rupees].] 

15D. Penalty for certain defaults in case of mutual funds.—If any person, who is— 

(a)  required  under this  Act  or  any  rules  or regulations  made  thereunder  to  obtain  a  certificate  of 
registration from the Board for sponsoring or carrying on any collective investment scheme, including 
mutual  funds,  sponsors  or  carries  on  any  collective  investment  scheme,  including  mutual  funds, 
5[a  penalty  
without  obtaining  such  certificate  of 
6[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 including mutual funds 
subject to a maximum of one crore rupees]]; 

registration,  he  shall  be 

liable 

to 

(b)  registered  with  the  Board  as  a  collective  investment  scheme,  including  mutual  funds,  for 
sponsoring  or  carrying  on  any  investment  scheme,  fails to  comply  with  the  terms  and  conditions  of 
certificate of registration, he shall be liable to 7[a penalty 8[which shall not be less than one lakh rupees 
but which may extend to one lakh rupees for each day during which such failure continues subject to a 
maximum of one crore rupees]]; 

(c)  registered  with  the  Board  as  a  collective  investment  scheme  including  mutual  funds,  fails  to 
make an application for listing of its schemes as provided for in the regulations governing such listing, 
he shall be liable to 9[a penalty 7[which shall not be less than one lakh rupees but which may extend to 
one lakh rupees for each day during which such failure continues subject to a maximum of one crore 
rupees]]; 

(d)  registered  as  a  collective  investment  scheme,  including  mutual  funds,  fails  to  despatch  unit 
certificates of any scheme in the manner provided in the regulation governing such despatch, he shall 
be liable to  10[a penalty  7[which shall not be less than one lakh rupees but which may extend to one 
lakh  rupees  for  each  day  during  which  such  failure  continues  subject  to  a  maximum  of  one  crore 
rupees]]; 

(e)  registered  as  collective  investment  scheme,  including  mutual  funds,  fails  to  refund  the 
application  monies  paid  by  the  investors  within  the  period  specified  in  the  regulations,  he  shall  be 
liable to 11[a penalty 7[which shall not be less than one lakh rupees but which may extend to one lakh 
rupees for each day during which such failure continues subject to a maximum of one crore rupees]]; 

(f)  registered  as  a  collective  investment  scheme,  including  mutual  funds,  fails  to  invest  money 
collected by such collective investment schemes in the manner or within the period specified in the 
regulations, he shall be liable to 12[a penalty 7[which shall not be less than one lakh rupees but which 
may  extend  to  one  lakh  rupees  for  each  day  during  which  such  failure  continues  subject  to  a 
maximum of one crore rupees]]. 

1. Subs. by Act 27 of 2014, s. 7, for certain words (w.e.f.8-9-2014). 
2. Subs. by Act 59 of 2002, s. 11, for section 15C (w.e.f. 29-10-2002). 
3. Ins. by Act 23 of 2019, s. 183 (w.e.f. 20-1-2020). 
4. Subs. by Act 27 of 2014, s. 8, for certain words (w.e.f. 8-9-2014). 
5. Subs. by Act 59 of 2002, s. 12, for “a penalty not exceeding ten thousand rupees for each day during which he carries on any 
such collective investment scheme including mutual funds, or ten lakh rupees, whichever is higher” (w.e.f. 29-10-2002). 

6.  Subs. by Act 27 of 2014, s. 9, for certain words (w.e.f. 8-9-2014). 
7.  Subs.  by  Act  59  of  2002,  s.  12,  for  “a  penalty  not  exceeding  ten  thousand  rupees  for  each  day  during  which  such  failure 

continues or ten lakh rupees, whichever is higher” (w.e.f. 29-10-2002). 

8. Subs. by Act 27 of 2014, s. 9, for certain words (w.e.f.8-9-2014). 
9.  Subs.  by  Act  59  of  2002,  s.  12,  for  “a  penalty  not  exceeding  five  thousand  rupees  for  each  day  during  which  such  failure 

continues or five lakh rupees, whichever is higher” (w.e.f. 29-10-2002). 

10. Subs. by  s. 12, ibid.,  for “a penalty not exceeding  five thousand rupees for each day during which such failure continues” 

(w.e.f. 29-10-2002). 

11.  Subs.  by  s.  12,  ibid.,  for  “a  penalty  not  exceeding  one  thousand  rupees  for  each  day  during  which  such  failure  continue”    

(w.e.f. 29-10-2002). 

12. Subs. by s. 12, ibid., for “a penalty not exceeding five lakh rupees for each such failure” (w.e.f. 29-10-2002). 

16 

 
                                                           
15E. Penalty for failure to observe rules and regulations by an asset management company.—
Where any asset management company of a mutual fund registered under this Act fails to comply with 
any of the regulations providing for restrictions on the activities of the asset management companies, such 
asset management company shall be liable to  1[a penalty  2[which shall not be less than one lakh rupees 
but which may extend to one lakh rupees for each day during which such failure continues subject to a 
maximum of one crore rupees]]. 

3[15EA.  Penalty  for  default  in  case  of  alternative  investment  funds,  infrastructure  investment 
trusts and real estate investment trusts.—Where any person fails to comply with the regulations made 
by  the  Board  in  respect  of  alternative  investment  funds,  infrastructure  investment  trusts  and  real  estate 
investment trusts or fails to comply with the directions issued by the Board, such person shall be liable to 
penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each 
day  during  which  such  failure  continues  subject  to  a  maximum  of  one  crore  rupees  or  three  times  the 
amount of gains made out of such failure, whichever is higher. 

15EB.  Penalty  for  default  in  case  of  investment  adviser  and  research  analyst.—Where  an 
investment  adviser  or  a  research  analyst  fails  to  comply  with  the  regulations  made  by  the  Board  or 
directions  issued  by  the  Board,  such  investment  adviser  or  research  analyst  shall  be  liable  to  penalty 
which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during 
which such failure continues subject to a maximum of one crore rupees.] 

15F.  Penalty  for  default  in  case  of  stock  brokers.—If  any  person,  who  is  registered  as  a  stock 

broker under this Act,— 

(a) fails to issue contract notes in the form and manner specified by the stock exchange of which 
such broker is a member, he shall be liable to 4[a penalty which shall not be less than one lakh rupees 
but which may extend to 5[one crore rupees]] for which the contract note was required to be issued by 
that broker; 

(b) fails to deliver any security or fails to make payment of the amount due to the investor in the 

manner within the period specified in the regulations, he shall be liable to 6[a penalty  

7[which shall not be less than one lakh rupees but which may extend to one lakh rupees for each 

day during which 8[such failure continues] subject to a maximum of one crore rupees]]; 

(c)  charges  an  amount  of  brokerage  which  is  in  excess  of  the  brokerage  specified  in  the 
regulations, he shall be liable to 9[a penalty 10[[which shall not be less than one lakh rupees but which 
may  extend  to  five  times  the  amount  of  brokerage]]  charged  in  excess  of  the  specified  brokerage, 
whichever is higher. 
15G. Penalty for insider trading.—If any insider who,— 

(i)  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 unpublished price sensitive information; or 
(ii) 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 

(iii) counsels, or procures for any other person to deal in any securities of any body corporate on 

the basis of unpublished price sensitive information, 

shall  be  liable  to  a  penalty  11[which  shall  not  be  less  than  ten  lakh  rupees  but  which  may  extend  to   
twenty-five  crore  rupees  or  three times  the  amount of  profits  made  out  of  insider trading,  whichever is 
higher]. 

1. Subs. by Act 59 of 2002, s. 13, for “a penalty not exceeding five lakh rupees for each such failure” (w.e.f. 29-10-2002). 
2. Subs. by Act 27 of 2014, s. 10, for certain words (w.e.f.8-9-2014). 
3. Ins. by Act 13 of 2018, s. 182 (w.e.f. 8-3-2019). 
4. Subs. by Act 27 of 2014, s. 11, for “a penalty not exceeding five times the amount” (w.e.f. 8-9-2014). 
5. Ins. by Act 23 of 2019, s. 184 (w.e.f. 20-1-2020). 
6.  Subs.  by  Act  59  of  2002,  s.  14,  for  “a  penalty  not  exceeding  five  thousand  rupees  for  each  day  during  which  such  failure 

continues” (w.e.f. 29-10-2002). 

7. Subs. by Act 27 of 2014, s. 11, for certain words (w.e.f.8-9-2014). 
8. Subs. by Act 13 of 2018, s. 183, for” he sponsors or carries on any such collective investment scheme including mutual funds” 

(w.e.f. 8-3-2019). 

9. Subs. by Act 59 of 2002, s. 14, for “a penalty not exceeding five thousand rupees” (w.e.f. 29-10-2002). 
10. Subs. by Act 27 of 2014, s. 11, for “of one lakh rupees or five times the amount of brokerage” (w.e.f.8-9-2014). 
11. Subs. by s. 12, ibid., for certain words (w.e.f.8-2-2014). 

17 

 
                                                           
15H. Penalty for  non-disclosure  of  acquisition  of shares  and takeovers.—If  any  person,  who  is 

required under this Act or any rules or regulations made thereunder, fails to— 

(i) disclose the aggregate of his share holding in the body corporate before he acquires any shares 

of that body corporate; or 

(ii) make a public announcement to acquire shares at a minimum price; 
1[(iii)  make  a  public  offer  by  sending  letter  of  offer  to  the  shareholders  of  the  concerned 

company; or 

(iv) make payment of consideration to the shareholders who sold their shares pursuant to letter of 

offer,] 

he  shall  be  liable  to  a  penalty  2[which  shall  not  be  less  than  ten  lakh  rupees  but  which  may  extend  to   
twenty-five  crore  rupees  or  three  times  the  amount  of  profits  made  out  of  such  failure,  whichever  is 
higher]. 

3[15HA. Penalty for fraudulent and unfair trade practices.—If any person indulges in fraudulent 
and  unfair trade  practices  relating  to  securities,  he shall  be liable  to  a penalty  4[which shall  not be less 
than  five  lakh  rupees  but  which  may  extend  to  twenty-five  crore  rupees  or  three  times  the  amount  of 
profits made out of such practices, whichever is higher]. 

5[15HAA.  Penalty  for  alteration,  destruction,  etc.,  of  records  and  failure  to  protect  the 

electronic database of Board.—Any person, who— 

(a)  knowingly  alters,  destroys,  mutilates,  conceals,  falsifies,  or  makes  a  false  entry  in  any 
information, record, document (including electronic records), which is required under this Act or any 
rules  or  regulations  made  there  under,  so  as  to  impede,  obstruct,  or  influence  the  investigation, 
inquiry, audit, inspection or proper administration of any matter within the jurisdiction of the Board. 

Explanation.—For  the  purposes  of  this  clause,  a  person  shall  be  deemed  to  have  altered, 
concealed  or  destroyed  such  information,  record  or  document,  in  case  he  knowingly  fails  to 
immediately  report  the  matter  to  the  Board  or  fails  to  preserve  the  same  till  such  information 
continues to be relevant to any investigation, inquiry, audit, inspection or proceeding, which may be 
initiated by the Board and conclusion thereof; 

(b) without being authorised to do so, access or tries to access, or denies of access 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), shall be liable to a penalty which shall not be less than one lakh rupees 
but which may extend to ten crore rupees or three times the amount of profits made out of such act, 
whichever is higher. 

Explanation.—In  this  section,  the  expressions  “computer  contaminant”,  “computer  virus”  and 
“damage” shall have the meanings respectively assigned to them under section 43 of the Information 
Technology Act, 2000 (21 of 2000).] 

1. Ins. by Act 59 of 2002, s. 16 (w.e.f. 29-10-2002). 
2. Subs. by Act 27 of 2014, s.13, for certain words (w.e.f.8-2-2014). 
3. Ins. by Act 59 of 2002, s. 17 (w.e.f. 29-10-2002). 
4. Subs. by Act 27 of 2014, s. 14, for certain words (w.e.f. 8-2-2014). 
5. Ins. by Act 23 of 2019, s. 185 (w.e.f. 20-1-2020). 

18 

 
                                                           
15HB. Penalty for contravention where no separate penalty has been provided.—Whoever fails 
to  comply  with  any  provision  of  this  Act,  the  rules  or  the  regulations  made  or directions  issued by  the 
Board  thereunder for  which  no  separate  penalty  has been  provided, shall  be  1[liable  to  a  penalty  which 
shall not be less one lakh rupees but which may extend to one crore rupees].] 

15-I. Power to adjudicate.—(1) For the purpose of adjudging under sections 15A, 15B, 15C, 15D, 
15E, 2[15EA, 15EB,] 15F, 15G, 3[15H, 15HA and 15HB] the Board 4[may] appoint any officer not below 
the rank of a Division Chief to be an adjudicating officer for holding an inquiry in the prescribed manner 
after giving any person concerned a reasonable opportunity of being heard for the purpose of imposing 
any penalty. 

(2)  While  holding  an  inquiry  the  adjudicating  officer  shall  have  power  to  summon  and  enforce  the 
attendance of any person acquainted with the facts and circumstances of the case to give evidence or to 
produce any document which in the opinion of the adjudicating officer, may be useful for or relevant to 
the subject matter of the inquiry and if, on such inquiry, he is satisfied that the person has failed to comply 
with the provisions of any of the sections specified in sub-section (1), he may impose such penalty as he 
thinks fit in accordance with the provisions of any of those sections. 

5[(3) The Board may call for and examine the record of any proceedings under this section and if it 
considers  that  the  order  passed  by  the  adjudicating  officer  is  erroneous  to  the  extent  it  is  not  in  the 
interests  of  the  securities  market,  it  may,  after  making  or  causing  to  be  made  such  inquiry  as  it  deems 
necessary, pass an order enhancing the quantum of penalty, if the circumstances of the case so justify: 

Provided that no such order shall be passed unless the person concerned has been given an opportunity 

of being heard in the matter: 

Provided  further  that  nothing  contained  in  this  sub-section  shall  be  applicable  after  an  expiry  of  a 
period  of  three  months  from  the  date  of the  order  passed  by  the  adjudicating  officer  or  disposal  of  the 
appeal under section 15T, whichever is earlier.] 

15J.  6[Factors to be taken into account while adjudging quantum of penalty].—While adjudging 
the quantum of penalty under  7[15-I or section 11 or section 11B, the Board or the adjudicating officer] 
officer shall have due regard to the following factors, namely:—  

 (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. 

8[Explanation.—For  the  removal  of  doubts,  it  is  clarified  that  the  power  of  9***  to  adjudge  the 
quantum of penalty under sections 15A to 15E, clauses (b) and (c) of section 15F, 15G, 15H and 15HA 
shall be and shall always be deemed to have been exercised under the provisions of this section.] 

10[15JA. Crediting sums realised by way of penalties to Consolidated Fund of India.—All sums 

realised by way of penalties under this Act shall be credited to the Consolidated Fund of India.] 

1. Subs. by Act 27 of 2014, s. 15,  for “liable to a penalty which may extend to one crore rupees” (w.e.f. 8-2-2014). 
2. Ins. by Act 13 of 2018, s. 184 (w.e.f. 8-3-2019). 
3. Subs. by Act 59 of 2002, s. 18, for “and 15H” (w.e.f. 29-10-2002). 
4. Subs. by Act 13 of 2018, s. 184, for “shall” (w.e.f. 8-3-2019). 
5. Ins. by Act 27 of 2014, s. 16 (w.e.f. 28-3-2014). 
6. Subs. by Act 13 of 2018, s. 185, for marginal heading (w.e.f. 8-3-2019). 
7. Subs. by s. 185, ibid., for “section 15-I, the adjudicating officer” (w.e.f. 8-3-2019). 
8. Ins. by Act 7 of 2017, s.147 (w.e.f. 1-3-2017). 
9. The words “of an adjudicating officer” omitted by Act 13 of 2018, s. 185 (w.e.f. 8-3-2018). 
10. Ins. by Act 59 of 2002, s. 19 (w.e.f. 29-10-2002). 

19 

 
                                                           
1[15JB.  Settlement  of  administrative  and  civil  proceedings.—(1)  Notwithstanding  anything 
contained in any other law for the time being in force, any person, against whom any proceedings have 
been initiated or may be initiated under section 11, section 11B, section 11D, sub-section (3) of section 12 
or section 15-I, may file an application in writing to the Board proposing for settlement of the proceedings 
initiated or to be initiated for the alleged defaults. 

(2) The Board may, after taking into consideration the nature, gravity and impact of defaults, agree to 
the proposal for settlement, on payment of such sum by the defaulter or on such other terms as may be 
determined by the Board in accordance with the regulations made under this Act. 

(3)  The  settlement  proceedings  under  this  section  shall  be  conducted  in  accordance  with  the 

procedure specified in the regulations made under this Act. 

(4)  No  appeal  shall  lie  under  section  15T  against  any  order  passed  by  the  Board  or  adjudicating 

officer, as the case may be, under this section.] 

2[(5) All settlement amounts, excluding the disgorgement amount and legal costs, realised under this 

Act shall be credited to the Consolidated Fund of India.] 

CHAPTER VIB 

ESTABLISHMENT, JURISDICTION, AUTHORITY AND PROCEDURE OF 3[SECURITIES APPELLATE TRIBUNAL] 

 4[15K.  Establishment  of  Securities  Appellate  Tribunal.—(1)  The  Central  Government  shall,  by 
notification,  establish  a  Tribunal  to  be  known  as  the  Securities  Appellate  Tribunal  to  exercise  the 
jurisdiction, powers and authority conferred on it by or under this Act or any other law for the time being 
in force. 

(2)  The  Central  Government  shall  also  specify  in  the  notification  referred  to  in  sub-section  (1),  the 

matters and places in relation to which the Securities Appellate Tribunal may exercise jurisdiction.]  

5[15L. Composition of Securities Appellate.—(1) 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 this Act or any other law for the time being in force.  

(2) Subject to the provisions of this Act,—  

(a) the jurisdiction of the Securities Appellate Tribunal may be exercised by Benches thereof;  

(b) a Bench may be constituted by the Presiding Officer of the Securities Appellate Tribunal with 

two or more Judicial or Technical Members as he may deem fit:  

Provided that every Bench constituted shall include at least one Judicial Member and one Technical 

Member;  

(c) the Benches of the Securities Appellate Tribunal shall ordinarily sit at Mumbai and may also sit 
at such other places as the Central Government may, in consultation with the Presiding Officer, notify. 

(3)  Notwithstanding  anything  contained  in  sub-section  (2),  the  Presiding  Officer  may  transfer  a 
Judicial Member or a Technical Member of the Securities Appellate Tribunal from one Bench to another 
Bench.] 

1. Ins. by Act 27 of 2014, s. 17 (w.e.f. 20-4-2007). 
2. Ins. by Act 13 of 2018, s. 186 (w.e.f. 8-3-2019). 
3. Subs. by Act 7 of 2017, s. 148, for “APPELLATE TRIBUNAL” (w.e.f. 1-3-2017). 
4. Subs. by s. 148, ibid., for section 15K (w.e.f. 1-3-2017). 
5. Subs. by s.148, ibid., for section 15L (w.e.f.1-3-2017) 

20 

 
 
 
                                                           
1[15M.  Qualification  for  appointment  as  Presiding  Officer,  Judicial  Member  and  Technical 
Member.—A person shall not be qualified for appointment as the Presiding Officer or a Judicial Member 
or a Technical Member of the Securities Appellate Tribunal, unless he—  

(a) 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, in the case of the Presiding Officer; and  

(b) is, or has been, a Judge of High Court for at least five years, in the case of a Judicial Member; 

or 

(c) in the case of a Technical Member––  

(i) is, or has been, a Secretary or an Additional Secretary in the Ministry or Department of the 

Central Government or any equivalent post in the Central Government or a State Government; or  

(ii)  is  a  person  of  proven  ability,  integrity  and  standing  having  special  knowledge  and 
professional  experience,  of  not  less  than  fifteen  years,  in  financial  sector  including  securities 
market or pension funds or commodity derivatives or insurance.  

15MA.  Appointment  of  Presiding  Officer  and  Judicial  Member.—The  Presiding  Officer  and 
Judicial Members of the Securities Appellate Tribunal shall be appointed by the Central Government in 
consultation with the Chief Justice of India or his nominee. 

 15MB.  Search-cum-Selection  Committee  for  appointment  of  Technical  Members.—(1)  The 
Technical Members of the Securities Appellate Tribunal shall be appointed by the Central Government on 
the recommendation of a Search-cum-Selection Committee consisting of the following, namely:––  

(a) Presiding Officer, Securities Appellate Tribunal—Chairperson;  

(b) Secretary, Department of Economic Affairs—Member;  

(c) Secretary, Department of Financial Services—Member; and  

(d) Secretary, Legislative Department or Secretary, Department of Legal Affairs—Member.  

(2)  The  Secretary,  Department  of  Economic  Affairs  shall  be  the  Convener  of  the  Search-cum-

Selection Committee.  

(3) The Search-cum-Selection Committee shall determine its procedure for recommending the names 

of persons to be appointed under sub-section (1).  

15MC.  Vacancy  not  to  invalidate  selection  proceeding.—(1)  No  appointment  of  the  Presiding 
Officer, a Judicial Member or a Technical Member of the Securities Appellate Tribunal shall be invalid 
merely  by  reason  of  any  vacancy  or  any  defect  in  the  constitution  of  the  Search-cum-Selection 
Committee.  

(2)  A  member  or  part  time  member  of  the  Board  or  the  Insurance  Regulatory  and  Development 
Authority  or  the  Pension  Fund  Regulatory  and  Development  Authority,  or  any  person  at  senior 
management level equivalent to the Executive Director in the Board or in such Authorities, shall not be 
appointed  as  Presiding  Officer  or  Member  of  the  Securities  Appellate  Tribunal,  during  his  service  or 
tenure as such with the Board or with such Authorities, as the case may be, or within two years from the 
date on which he ceases to hold office as such in the Board or in such Authorities.  

(3) The Presiding Officer or such other member of the Securities Appellate Tribunal, holding office 
on  the  date  of  commencement  of  Part  VIII  of  Chapter  VI  of  the  Finance  Act,  2017  (7  of  2017)  shall 
continue to hold office for such term as he was appointed and the other provisions of this Act shall apply 
to such Presiding Officer or such other member, as if Part VIII of Chapter VI of the Finance Act, 2017 
had not been enacted.] 

1. Subs. by Act 7 of 2017, s. 148, for section 15M (w.e.f. 1-3-2017). 

21 

 
                                                           
 
1[15N.  Tenure  of  office  of  Presiding  Office,  Judicial  or  Technical  Members  of  Securities 
Appellate  Tribunal.—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 five years:  

Provided that no Presiding Officer or the Judicial or Technical Member shall hold office after he has 

attained the age of seventy years.] 

15-O. Salary and allowances and other terms and conditions of service of Presiding Officers.—
The salary and allowances payable to, and the other terms and conditions of service (including pension, 
gratuity  and  other  retirement  benefits)  of,  the  2[Presiding  Officer  and  other  Members  of  a  Securities 
Appellate Tribunal] shall be such as may be prescribed: 

Provided that neither the salary and allowances nor the other terms and conditions of services of the 
3[Presiding  Officer  and  other  Members  of  a  Securities  Appellate  Tribunal]  shall  be  varied  to  their 
disadvantage after appointment. 

15P. Filling up of vacancies.—If, for reason other than temporary absence, any  vacancy occurs in 
4[the office of the Presiding Officer or any other Member,] of a  Securities Appellate Tribunal, then the 
Central Government shall appoint another person in accordance with the provisions of this Act to fill the 
vacancy and the proceedings may be continued before the Securities Appellate Tribunal from the stage at 
which the vacancy is filled.  

5[15PA. Member to act as Presiding Officer in certain circumstances.—In the event of occurrence 
of any vacancy in the office of the Presiding Officer of the Securities Appellate Tribunal by reason of his 
death,  resignation  or  otherwise,  the  senior-most  Judicial  Member  of  the  Securities  Appellate  Tribunal 
shall  act  as  the  Presiding  Officer  until  the  date  on  which  a  new  Presiding  Officer  is  appointed  in 
accordance with the provisions of this Act.] 

15Q. Resignation and removal.—(1)  6[The Presiding Officer  or any other Member  of a Securities 
Appellate Tribunal] may, by notice in writing under his hand addressed to the Central Government, resign 
his office: 

Provided  that  7[the  Presiding  Officer  or  any  other  Member]  shall,  unless  he  is  permitted  by  the 
Central  Government  to  relinquish  his  office  sooner,  continue  to  hold  office  until  the  expiry  of  three 
months  from  the  date  of  receipt  of  such  notice  or  until  a  person  duly  appointed  as  his  successor  inters 
upon his office or until the expiry of his term of office, whichever is the earliest. 

8[(2) The Central Government may, after an inquiry made by the Judge of the Supreme Court, remove 
the  Presiding  Officer  or Judicial  Member  or Technical Member  of the  Securities  Appellate Tribunal,  if 
he—  

(a) is, or at any time has been adjudged as an insolvent;  

(b)  has  become  physically  or  mentally  incapable  of  acting  as  the  Presiding  Officer,  Judicial  or 

Technical Member;  

(c) has been convicted of any offence which, in the opinion of the Central Government, involves 

moral turpitude;  

(d)  has,  in  the  opinion  of  the  Central  Government,  so  abused  his  position  as  to  render  his 

continuation in office detrimental to the public interest; or 

1. Subs. by Act 7 of 2017, s.148, for section 15N (w.e.f. 26-5-2017). 
2. Subs. by Act 59 of 2002, s. 22, for “Presiding Officer of a Securities Appellate Tribunal” (w.e.f. 29-10-2002). 
3. Subs. by s. 22, ibid., for “said Presiding Officers” (w.e.f. 29-10-2002). 
4. Subs. by s. 23, ibid., for “office of the Presiding Officer” (w.e.f. 29-10-2002). 
5. Ins. by Act 7 of 2017, s. 148 (w.e.f. 26-5-2017).  
6. Subs. by Act 59 of 2002, s. 24, for “Presiding Officer of a Securities Appellate Tribunal” (w.e.f. 29-10-2002). 
7. Subs. by s. 24, ibid., for “the said Presiding Officer” (w.e.f. 29-10-2002). 
8. Subs. by Act 7 of 2017, s.148, for sub-section (2)  (w.e.f. 26-5-2017) 

22 

 
                                                           
(e)  has  acquired  such  financial  interest  or  other  interest  as  is  likely  to  affect  prejudicially  his 

functions as the Presiding Officer or Judicial or Technical Member:  

Provided that he shall not be removed from office under clauses (d) and (e), unless he has been given 

a reasonable opportunity of being heard in the matter.] 

(3)  The  Central  Government  may,  by  rules,  regulate  the  procedure  for  the  investigation  of 

misbehaviour or incapacity of the 1[the Presiding Officer or any other Member].  

2[15QA.Qualifications, 

terms  and  conditions  of 

service  of  Presiding  Officer  and                 

Member.—  Notwithstanding  anything  contained  in  this  Act,  the  qualifications,  appointment,  term  of 
office, salaries and allowances, resignation, removal and the other terms and conditions of service of the 
Presiding  Officer  and  other  Members  of  the  Appellate  Tribunal  appointed  after  the  commencement  of 
3[the Tribunals Reforms Act, 2021, shall be governed by the provisions of Chapter II of the said Act]:  

Provided that the Presiding Officer and Member appointed before the commencement of Part XIV of 
Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions of this Act and the 
rules  made  thereunder  as  if  the  provisions  of  section  184  of  the  Finance  Act,  2017  had  not  come  into 
force.] 

15R. Orders constituting Appellate Tribunal to be final and not to invalidate its proceedings.—
No order of the Central Government appointing any person as the  4[Presiding Officer or a Member] of a 
Securities Appellate Tribunal shall be called in question in any manner, and no act or proceeding before a 
Securities  Appellate  Tribunal  shall  be  called  in  question  in  any  manner  on  the  ground  merely  of  any 
defect in the constitution of a Securities Appellate Tribunal. 

15S.  Staff  of  the  Securities  Appellate  Tribunal.—(1)  The  Central  Government  shall  provide  the 

Securities Appellate Tribunal with such officers and employees as that Government may think fit. 

(2)  The  officers  and  employees  of  the  Securities  Appellate  Tribunal  shall  discharge  their  functions 

under general superintendence of the Presiding Officer. 

(3) The salaries and allowances and other conditions of service of the officers and employees of the 

Securities Appellate Tribunal shall be such as may be prescribed. 

15T. Appeal to the Securities Appellate Tribunal.—5[(1) Save as provided in sub-section (2), 

any person aggrieved,— 

(a) by an order of the Board made, on and after the com mencement of the Securities Laws 
(Second  Amendment) Act,  1999  (32  of  1999),  under  this  Act,  or  the  rules  or  regulations 
made thereunder; or 

(b) by an order made by an adjudicating officer  6[under this Act; or]  

7[(c)  by  an  order  of  the  Insurance  Regulatory  and  Development  Authority  or  the  Pension  Fund 

Regulatory and Development Authority,] 

may prefer an appeal to a Securities Appellate Tribunal  having jurisdiction in the matter.]  

8* 

* 

* 

* 

(3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the 
date on which 9[a copy of the order made by the Board or the adjudicating officer 10[or the Insurance 
Regulatory and Development Authority or the Pension Fund Regulatory and Development Authority] as 

1. Subs. by Act 59 of 2002, s. 24, for “aforesaid Presiding Officer” (w.e.f. 29-10-2002). 
2. Ins. by Act 7 of 2017, s.178  (w.e.f. 26-5-2017) 
3. Subs. by Act 33 of 2021, s. 17, for “Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the provisions  of 

section 184 of that Act” (w.e.f. 4-4-2021). 

4. Subs. by Act 59 of 2002, s. 25, for “Presiding Officer” (w.e.f. 29-10-2002). 
5. Subs. by Act 32 of 1999, s. 9, for sub-section (1) (w.e.f. 16-12-1999). 
6. Subs. by Act 7 of 2017, s. 148, “under this Act,” (w.e.f. 26-5-2017) 
7. Ins. by s.148, ibid.  (w.e.f. 26-5-2017) 
8. Sub-section (2) omitted by Act 27 of 2014, s. 18 (w.e.f. 18-7-2013). 
9. Subs. by Act 32 of 1999, s. 9, for “a copy of the order made, by the adjudicating officer” (w.e.f. 16-12-1999). 
10. Ins. by Act 7 of 2017, s.148 (w.e.f. 26-5-2017). 

23 

 
 
 
 
 
 
 
 
 
                                                           
the case may be,] is received by him and it shall be in such form and be accompanied by such fee as 
may be prescribed: 

Provided that 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. 

(4) On receipt of an appeal under sub-section (1), 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. 

(5)  The  Securities  Appellate  Tribunal  shall  send  a  copy  of  every  order  made  by  it  to  the 
1[Board,  2[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. 

(6) The appeal filed before the Securities Appellate Tribunal under sub-section (1) 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. 

15U. Procedure and powers of the Securities Appellate Tribunal.—(1) The Securities Appellate 
Tribunal shall not be bound by the procedure laid down by the code of Civil Procedure, 1908 (5 of 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. 

(2) 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                   
(5 of 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. 

(3)  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 (45 of 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 (2 of 1974).  

2[(4) Where Benches are constituted, the Presiding Officer of the Securities Appellate Tribunal may, 
from  time  to  time  make  provisions  as  to  the  distribution  of  the  business  of  the  Securities  Appellate 
Tribunal amongst the Benches and also provide for the matters which may be dealt with, by each Bench.  

(5) On the application of any of the parties and after notice to the parties, and after hearing such of 
them as he may desire to be heard, or on his own motion without such notice, the Presiding Officer of the 
Securities Appellate Tribunal may transfer any case pending before one Bench, for disposal, to any other 
Bench.  

(6) If a Bench of the Securities Appellate Tribunal consisting of two members differ in opinion on 
any point, they shall state the point or points on which they differ, and make a reference to the Presiding 

1. Subs. by Act 32 of 1999, s. 9, for “parties” (w.e.f. 16-12-1999). 
2. Ins. by Act 7 of 2017, s.148 (w.e.f. 26-5-2017). 

24 

 
                                                           
Officer of the Securities Appellate Tribunal who shall either hear the point or points himself or refer the 
case  for  hearing  only  on  such  point  or  points  by  one  or  more  of  the  other  members  of  the  Securities 
Appellate Tribunal and such point or points shall be decided according to the opinion of the majority of 
the  members  of  the  Securities  Appellate  Tribunal  who  have  heard  the  case,  including  those  who  first 
heard it.] 

1[15V. Right to legal representation.—The appellant may either appear in person or authorise one 
or more chartered accountants or company secretaries or cost accountants or legal practitioners or 
any of its officers to present his or its case before the Securities Appellate Tribunal. 

Explanation.—For the purposes of this section,— 

(a) ”chartered accountant” means a chartered accountant as defined in clause (b) of sub-section (1) 
of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of 
practice under sub-section (1) of section 6 of that Act; 

(b) ”company secretary” means a company secretary as defined in clause (c) of sub-section (1) 
of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate of 
practice under sub-section (1) of section 6 of that Act; 

(c) ”cost  accountant”  means  a  cost  accountant  as  defined  in  clause  (b) of  sub-section  (1)  of             

section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate 
of practice under sub-section (1) of section 6 of that Act; 

(d) ”legal practitioner” means an advocate, vakil or an attorney of any High Court, and includes a 

pleader in practice.] 

15W. Limitation.—The provisions of the Limited Act, 1963 (36 of 1963), shall, as far as may be, 

apply to an appeal made to a Securities Appellate Tribunal. 

2[15X.  Presiding  Officer,  Members  and  staff  of  Securities  Appellate  tribunal  to  be  public 
servants.—The Presiding Officer, Members and other officers and employees of a Securities Appellate 
Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code 
(45 of 1860).] 

15Y. Civil Court not to have jurisdiction.—No civil court shall have jurisdiction to entertain any 
suit or proceeding in respect of any matter which an adjudication 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. 

3[15Z. Appeal to Supreme Court.—Any person aggrieved by any decision or order of the Securities 
Appellate  Tribunal  may  file  an  appeal  to  the  Supreme  Court  within  sixty  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: 

Provided that the Supreme Court may, if it is satisfied that the appellant was prevented by sufficient 
cause  from  filing  the  appeal  within  the  said  period,  allow  it  to  be  filed  within  a  further  period  not 
exceeding sixty days.]] 

CHAPTER VII 

MISCELLANEOUS 

16.  Power  to  Central  Government  to  issue  directions.—(1)  Without  prejudice  to  the  foregoing 
provisions of this Act, the Board shall, in exercise of its powers or the performance of its functions under 
4[this Act or the Depositories Act, 1996 (22 of 1996)], be bound by such directions on questions of policy 
as the Central Government may give in writing to it from time to time: 

1. Subs. by Act 32 of 1999, s. 10, for section 15V (w.e.f. 16-12-1999). 
2. Subs. by Act 59 of 2002, s. 26, for section 15X (w.e.f. 29-10-2002). 
3. Subs. by s. 27, ibid., for section 15Z (w.e.f. 29-10-2002). 
4. Subs. by Act 22 of 1996, s. 30 and the Schedule, for “this Act” (w.e.f. 20-9-1995). 

25 

 
                                                           
Provided  that  the  Board  shall,  as  far  as  practicable,  be  given  an  opportunity  to  express  its  views 

before any direction is given under this sub-section. 

(2) The decision of the Central Government whether a question is one of policy or not shall be final. 

17.  Power  of  Central  Government  to  supersede  the  Board.—(1)  If  at  any  time  the  Central 

Government is of opinion— 

(a) that on account of grave emergency, the Board is unable to discharge the functions and duties 

imposed on it by or under the provisions of this Act; or 

(b)  that  the  Board  has  persistently  made  default  in  complying  with  any  direction  issued  by  the 
Central Government under this Act or in the discharge of the functions and duties imposed on it by or 
under the provisions of this Act and as a result of such default the financial position of the Board or 
the administration of the Board has deteriorated; or 

(c) that circumstances exist which render it necessary in the public interest so to do, 

the  Central  Government  may,  by  notification,  supersede  the  Board  for  such  period,  not  exceeding  six 
months, as may be specified in the notification. 

(2) Upon the publication of a notification under sub-section (1) superseding the Board,— 

(a) all the members shall, as from the date of supersession, vacate their offices as such; 

(b)  all  the  powers,  functions  and  duties  which  may,  by  or  under  the  provisions  of  this  Act,  be 
exercised  or  discharged  by  or  on  behalf  of  the  Board,  shall  until  the  Board  is  reconstituted  under      
sub-section (3),  be  exercised  and  discharged  by  such  person  or  persons  as the Central  Government 
may direct; and 

(c)  all  property  owned  or  controlled  by  the  Board  shall,  until  the  Board  is  reconstituted  under     

sub-section (3), vest in the Central Government. 

(3)  On  the  expiration  of  the  period  of  supersession  specified  in  the  notification  issued  under              

sub-section (1), the Central Government may reconstitute the Board by a fresh appointment and in such 
case  any  person  or  persons  who  vacated  their  offices  under  clause  (a)  of  sub-section  (2),  shall  not  be 
deemed disqualified for appointment: 

Provided  that  the  Central  Government  may,  at  any  time,  before  the  expiration  of  the  period  of 

supersession, take action under this sub-section. 

(4) The Central Government shall cause a notification issued under sub-section (1) and a full report of 
any action taken under this section and the circumstances leading to such action to be laid before each 
House of Parliament at the earliest. 

18. Returns and reports.—(1) The Board shall furnish to the Central Government at such time and 
in such form and manner as may be prescribed or as the Central Government may direct, such returns and 
statements and such particulars in regard to any proposed or existing programme for the promotion and 
development of the securities market, as the Central Government may, from time to time, require. 

(2) Without prejudice to the provisions of sub-section (1), the Board shall, within 1[ninety days] after 
the  end  of  each  financial  year,  submit  to  the  Central  Government  a  report  in  such  form,  as  may  be 
prescribed,  giving  a  true  and  full  account  of  its  activities,  policy  and  programmes  during  the  previous 
financial year. 

(3)  A  copy  of  the  report  received  under  sub-section  (2)  shall  be  laid,  as  soon  as  may  be  after  it  is 

received, before each House of Parliament. 

19.  Delegation.—The  Board  may,  by  general  or  special  order  in  writing  delegate  to  any  member, 
officer  of  the  Board  or  any  other  person  subject  to  such  conditions,  if  any,  as  may  be  specified  in  the 
order,  such  of  its  powers  and  functions  under  this  Act  (except  the  powers  under  section  29)  as  it  may 
deem necessary. 

20. Appeals.—(1) Any person aggrieved by 2[an order of the Board made, before the commencement 
of  the  Securities  Laws  (Second  Amendment)  Act,  1999  (32  of  1999),]  under  this  Act,  or  the  rules  or 

1. Subs. by Act 9 of 1995, s. 10, for “sixty days” (w.e.f. 25-1-1995). 
2. Subs. by Act 32 of 1999, s. 11, for “an order of the Board made” (w.e.f. 16-12-1999). 

26 

 
                                                           
regulations made thereunder may prefer an appeal to the Central Government within such time as may be 
prescribed. 

(2) No appeal shall be admitted if it is preferred after the expiry of the period prescribed therefor: 

Provided  that  an  appeal  may  be  admitted  after  the  expiry  of  the  period  prescribed  therefor  if  the 
appellant satisfies the Central Government that he had sufficient cause for not preferring the appeal within 
the prescribed period. 

(3) Every appeal made under this section shall be made in such form and shall be accompanied by a 

copy of the order appealed against and by such fees as may be prescribed. 

(4) The procedure for disposing of an appeal shall be such as may be prescribed: 

Provided that before disposing of an appeal, the appellant shall be given a reasonable opportunity of 

being heard. 

1[20A. Bar of jurisdiction.—No order passed by the  2[Board or the adjudicating officer] under this 
Act shall be appealable except as provided in  3[section 15T or section 20] and no civil court shall have 
jurisdiction in respect of any matter which the  4[Board 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  4[Board  or  the 
adjudicating officer] by, or under, this Act.] 

21. Savings.—Nothing in this Act shall exempt any person from any suit or other proceedings which 

might, apart from this Act, be brought against him. 

22. Members, officers and employees of the Board to be public servants.—All members, officers 
and other employees of the Board shall be deemed, when acting or purporting to act in pursuance of any 
of the provisions of this Act, to be public servants within the meaning of section 21 of the Indian Penal 
Code (45 of 1860). 

23. Protection of action taken in good faith.—No suit, prosecution or other legal proceedings shall 
lie against the Central Government 4[or Board] or any officer of the Central Government or any member, 
officer or other employee of the Board for anything which is in good faith done or intended to be done 
under this Act or the rules or regulations made thereunder. 

5[24. Offences.—(1) Without prejudice to any award of  penalty by the adjudicating officer  6[or the 
Board] under this Act, if any person contravenes or attempts to contravene or abets the contravention of 
the  provisions  of  this  Act  or  of  any  rules  or  regulations  made  thereunder,  he  shall  be  punishable  with 
imprisonment for a term which may extend to  7[ten years, or with fine, which may extend to twenty-five 
crore rupees or with both]. 

(2) If any person fails to pay the penalty imposed by the adjudicating officer 8[or the Board] or fails to 
comply  with any  9*** directions or orders, he shall be punishable with imprisonment for a term which 
shall not be less than one month but which may extend to 10[ten years, or with fine, which may extend to 
twenty-five crore rupees or with both.] 

11[24A.  Composition  of  certain  offences.—Notwithstanding  anything  contained  in  the  Code  of 
Criminal  Procedure,  1973  (2  of  1974),  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  Securities  Appellate  Tribunal  or  a  court  before 
which such proceedings are pending. 

1. Ins. by Act 9 of 1995, s. 11 (w.e.f. 25-1-1995). 
2. Subs. by Act 32 of 1999, s. 12, for “Board” (w.e.f. 16-12-1999). 
3. Subs. by s. 12, ibid., for “section 20” (w.e.f. 16-12-1999). 
4. Ins. by Act 9 of 1995, s. 12 (w.e.f. 25-1-1995). 
5. Subs. by s. 13, ibid., for section 24 (w.e.f. 25-1-1995). 
6. Ins. by Act 13 of 2018, s. 187 (w.e.f. 8-3-2019). 
7. Subs. by Act 59 of 2002, s. 28, for “one year, or with fine, or with both” (w.e.f. 29-10-2002). 
8. Ins. by Act 13 of 2018, s. 187 (w.e.f. 8-3-2019). 
9. The words “of his” omitted by s. 187, ibid. (w.e.f. 8-3-2019). 
10. Subs. by Act 59 of 2002, s. 28,  for certain words (w.e.f. 29-10-2002). 
11. Ins. by s. 29, ibid. (w.e.f. 29-10-2002). 

27 

 
                                                           
24B.  Power  to  grant  immunity.—(1)  The  Central  Government  may,  on  recommendation  by  the 
Board, if the Central Government is satisfied, that any person, who is alleged to have violated any of the 
provisions of this Act or the rules or the regulations made thereunder, has made a full and true disclosure 
in respect of the alleged violation, grant to such person, subject to such conditions as it may think fit to 
impose, immunity from prosecution for any offence under this Act, or the rules or the regulations made 
thereunder or also from the imposition of any penalty under this Act with respect to the alleged violation: 

Provided  that  no  such  immunity  shall  be  granted  by  the  Central  Government  in  cases  where  the 
proceedings  for  the  prosecution  for  any  such  offence  have  been  instituted  before  the  date  of  receipt  of 
application for grant of such immunity: 

Provided further that recommendation of the Board under this sub-section shall not be binding upon 

the Central Government. 

(2)  An  immunity  granted to  a  person  under  sub-section  (1)  may,  at  any  time,  be  withdrawn  by  the 
Central Government, if it is satisfied that such person had, in the course of the proceedings, not complied 
with the condition on which the immunity was granted or had given false  evidence, and thereupon such 
person  may  be  tried  for  the  offence  with  respect  to  which  the  immunity  was  granted  or  for  any  other 
offence  of  which  he  appears  to  have  been  guilty  in  connection  with  the  contravention  and  shall  also 
become  liable  to  the  imposition  of  any  penalty  under  this  Act  to  which  such  person  would  have  been 
liable, had not such immunity been granted.] 

25.  Exemption  from  tax  on  wealth  and  income.—Notwithstanding  anything  contained  in  the 
Wealth-tax Act, 1957 (27 of 1957), the Income-tax Act, 1961 (43 of 1961) or any other enactment for the 
time being in force relating to tax on wealth, income, profits or gains— 

(a) the Board; 

(b)  the  existing  Securities  and  Exchange  Board  from  the  date  of  its  constitution  to  the  date  of 

establishment of the Board, 

shall  not  be  liable  to  pay  wealth-tax,  income-tax  or  any  other  tax  in  respect  of  their  wealth,  income, 
profits or gains derived. 

26.  Cognizance  of  offences  by  courts.—(1)  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 1***. 

* 

2* 
3[26A.  Establishment  of  Special  Courts.—(1)  The  Central  Government  may,  for  the  purpose  of 
providing speedy trial of offences under this Act, by notification, establish or designate as many Special 
Courts as may be necessary. 

* 

* 

* 

(2) A 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. 

(3)  A  person  shall  not  be  qualified  for  appointment  as  a  judge  of  a  Special  Court  unless  he  is, 
immediately before such appointment, holding the office of a Sessions Judge or an Additional Sessions 
Judge, as the case may be. 

26B.  Offences  triable  by  Special  Courts.—Notwithstanding  anything  contained  in  the  Code  of 
Criminal  Procedure,  1973  (2  of  1974),  all  offences  under  this  Act  committed  prior  to  the  date  of 
commencement  of the  Securities  Laws (Amendment)  Act,  2014  (27  of  2014)  or  on  or after the date  of 
such commencement, 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. 

1. The words “with the previous sanction of the Central Government” omitted by Act 9 of 1995, s. 14 (w.e.f. 25-1-1995). 
2. Sub-section (2) omitted by Act 27 of 2014, s. 19 (w.e.f. 18-7-2013). 
3. Ins. by s. 20, ibid. (w.e.f. 18-7-2013). 

28 

 
 
 
 
 
 
 
 
 
                                                           
26C.  Appeal  and  revision.—The  High  Court  may  exercise,  so  far  as  may  be  applicable,  all  the 
powers conferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 (2 of 1974) on a 
High Court, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court 
of Session trying cases within the local limits of the jurisdiction of the High Court. 

26D. Application of Code to proceedings before Special Court.—(1) Save as otherwise provided 
in  this  Act,  the  provisions  of  the  Code  of  Criminal  Procedure,  1973  (2  of  1974)  shall  apply  to  the 
proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be 
deemed to be a Court of Session and the person conducting prosecution before a Special Court shall be 
deemed to be a Public Prosecutor within the meaning of clause (u) of section 2 of the Code of Criminal 
Procedure, 1973 (2 of 1974). 

(2) The person conducting prosecution referred to in sub-section (1) should have been in practice as 
an advocate for not less than seven years or should have held a post, for a period of not less than seven 
years, under the Union or a State, requiring special knowledge of law. 

26E. Transitional provisions.—Any offence committed under this Act, which is triable by a Special 
Court shall, until a Special Court is established, be taken cognizance of and tried by a Court of Session 
exercising  jurisdiction  over  the  area,  notwithstanding  anything  contained  in  the  Code  of  Criminal 
Procedure, 1973 (2 of 1974): 

Provided  that  nothing  contained  in  this  section  shall  affect  the  powers  of  the  High  Court  under    

section 407 of the Code of Criminal Procedure, 1973  (2 of 1974) to transfer any case or class of cases 
taken cognizance by a Court of Session under this section.] 

27.  1[Contravention by companies].—(1) Where  2[a contravention of any of the provisions of this 
Act or any rule, regulation, direction or order made thereunder] has been committed by a company, every 
person who at the time the 3[contravention] was committed was in charge of, and was responsible to, the 
company for the conduct of the business of the company, as well as the company, shall be deemed to be 
guilty of the offence and shall be liable to be proceeded against and punished accordingly: 

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment  provided  in  this  Act,  if  he  proves  that  the  4[contravention]  was  committed  without  his 
knowledge or that he had exercised all due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where an  4[contravention] under this Act 
has been committed by a company and it is proved that the 4[contravention] has been committed with the 
consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary 
or other officer of the company, such director, manager, secretary or other officer shall also be deemed to 
be guilty of the 4[contravention] and shall be liable to be proceeded against and punished accordingly. 

Explanation.—For the purposes of this section,— 

(a) “company” means any body corporate and includes a firm or other association of individuals; 

and 

(b) “director”, in relation to a firm, means a partner in the firm. 

28.  [Power  to  exempt.]  Omitted  by  the  Securities  Laws  (Amendment)  Act,  1995  (9  of  1995),  s.  15 

(w.e.f. 25-1-1995). 

4[28A. Recovery of amounts.—(1) If a person fails to pay the penalty imposed  5[under this Act] or 
fails to comply with any direction of the Board 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  the  Board,  the  Recovery 
Officer  may  draw  up  under  his  signature  a  statement  in  the  specified  form  specifying  the  amount  due 
from  the  person  (such  statement  being  hereafter  in  this  Chapter  referred  to  as  certificate)  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; 

1. Subs. by Act 13 of 2018, s. 188, for marginal heading (w.e.f. 8-3-2019). 
2. Subs. by s. 188, ibid., for “an offence under this Act” (w.e.f. 8-3-2019). 
3. Subs. by s. 188, ibid., for “offence” (w.e.f. 8-3-2019). 
4. Ins. by Act 27 of 2014, s. 21 (w.e.f. 18-7-2013). 
5. Subs. by Act 13 of 2018, s. 189, for “by the adjudicating officer” (w.e.f. 8-3-2019). 

29 

 
                                                           
(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, 

and  for  this  purpose,  the  provisions  of  sections  220  to  227,  228A,  229,  232,  the  Second  and  Third 
Schedules to the Income-tax Act, 1961 (43 of 1961) and the Income-tax (Certificate Proceedings) Rules, 
1962, as in force from time to time, in so far as may be, apply with necessary modifications as if the said 
provisions and the rules made thereunder were the provisions of this Act and referred to the amount due 
under this Act instead of to income-tax under the Income-tax Act, 1961. 

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 which has been 
transferred directly or indirectly on or after the date when the amount specified in certificate had become 
due,  by  the  person  to  his  spouse  or  minor  child  or  son's  wife  or  son's  minor  child,  otherwise  than  for 
adequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid; and 
so far as 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, it 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. 

Explanation  2.—Any  reference  under  the  provisions  of  the  Second  and  Third  Schedules  to  the 
Income-tax  Act,  1961  (43  of  1961)  and  the  Income-tax  (Certificate  Proceedings)  Rules,  1962  to  the 
assessee shall be construed as a reference to the person specified in the certificate. 

Explanation  3.—Any  reference  to  appeal  in  Chapter  XVIID  and  the  Second  Schedule  to  the       

Income-tax  Act,  1961  (43  of  1961),  shall  be  construed  as  a  reference  to  appeal  before  the  Securities 
Appellate Tribunal under section 15T of this Act. 

1[Explanation  4.  —The  interest  referred  to  in  section  220  of  the  Income-tax  Act,  1961  shall 

commence from the date the amount became payable by the person.] 

(2)  The  Recovery  Officer  shall  be  empowered  to  seek  the  assistance  of  the  local  district 

administration while exercising the powers under sub-section (1). 

(3) Notwithstanding anything contained in any other law for the time being in force, the recovery of 
amounts  by  a  Recovery  Officer  under  sub-section  (1),  pursuant  to  non-compliance  with  any  direction 
issued by the Board under section 11B, shall have precedence over any other claim against such person. 

(4) For the purposes of sub-sections (1), (2) and (3), the expression ‘‘Recovery Officer’’ means any 
officer of the Board who may be authorised, by general or special order in writing, to exercise the powers 
of a Recovery Officer.] 

2[28B.  Continuance  of  proceedings.—(1)  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: 

Provided that, 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. 

(2) 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 

1. The Explanation ins. by Act 21 of 2019, s. 42 and the Second Schedule (w.e.f. 21-2-2019). 
2.  Ins. by Act 13 of 2018, s. 190 (w.e.f. 8-3-2019). 

30 

 
                                                           
against the deceased if he had survived, may be initiated against the legal representative and all the 
provisions of this Act shall apply accordingly. 
(3) 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.  

(4) 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. 

Explanation.—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.]  

1[28C.  Powers  of  Board  not  to  apply  to  International  Financial  Services  Centre.—
Notwithstanding anything contained in any other law for the time being in force, the powers exercisable 
by the Board under this Act,— 

(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of 

section 18 of the Special Economic Zones Act, 2005 (28 of 2005); 

(b)  shall  be  exercisable  by  the  International  Financial  Services  Centres  Authority  established 
under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019,  
in so far as regulation of financial products, financial services and financial institutions that are permitted 
in the International Financial Services Centres are concerned.] 

29.  Power  to  make  rules.—(1)  The  Central  Government  may,  by  notification,  make  rules  for 

carrying out the purposes of this Act. 

(2)  In  particular,  and  without  prejudice  to  the  generality  of  the  foregoing  power,  such  rules  may 

provide for all or any of the following matters, namely:— 

(a)  the  term  of  office  and  other  conditions  of  service  of  the  Chairman  and  the  members  under 

sub-section (1) of section 5; 

* 

(b) the additional functions that may be performed by the Board under section 11; 
2* 
(d) the manner in which the accounts of the Board shall be maintained under section 15; 
3[(da) the manner of inquiry under sub-section (1) of section 15-I; 
(db)  the  salaries  and  allowances  and  other  terms  and  conditions  of  service  of  the  4[Presiding 
Officers,  Members]  and  other  officers  and  employees  of  the  Securities  Appellate  Tribunal  under 
section 15-O and sub-section (3) of section 15S; 

*; 

* 

* 

(dc) the procedure for the investigation of misbehaviour or incapacity of the 5[Presiding Officers, 

or other Members] of the Securities Appellate Tribunal under sub-section (3) of section 15Q; 

(dd)  the  form  in  which  an  appeal  may  be  filed  before  the  Securities  Appellate  Tribunal  under 

section 15T and the fees payable in respect of such appeal;] 

(e) the form and the manner in which returns and report to be made to the Central Government 

under section 18; 

(f) any other matter which is to be, or may be, prescribed, or in respect of which provision is to 

be, or may be, made by rules. 
30.  Power  to  make  regulations.—(1)  The  Board  may,  6***  by  notification,  make  regulations 

consistent with this Act and the rules made thereunder to carry out the purposes of this Act. 

(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may 

provide for all or any of the following matters, namely:— 

1. Ins. by Act 50 of 2019, s. 33 and the second Schedule (w.e.f. 1-10-2020). 
2. Clause (c) omitted by Act 9 of 1995, s. 16 (w.e.f. 25-1-1995). 
3. Ins. by s. 16, ibid. (w.e.f. 25-1-1995). 
4. Subs. by Act 59 of 2002, s. 31, for “Presiding Officers” (w.e.f. 29-10-2002). 
5. Subs. by s. 31, ibid., for “Presiding Officers” (w.e.f. 29-10-2002). 
6. The words “with the previous approval of the Central Government” omitted by Act 9 of 1995, s. 17 (w.e.f. 25-1-1995). 

31 

 
 
 
 
 
 
 
 
                                                           
(a)  the  times  and  places  of  meetings  of  the  Board  and  the  procedure  to  be  followed  at  such 
meetings  under  sub-section  (1)  of  section  7  including  quorum  necessary  for  the  transaction  of 
business; 

(b)  the  term  and  other  conditions  of  service  of  officers  and  employees  of  the  Board  under           

sub-section (2) of section 9; 

1[(c)  the  matters  relating  to  issue  of  capital,  transfer  of  securities  and  other  matters  incidental 
thereto and the manner in which such matters shall be disclosed by the companies under section 11A; 

2[(ca) the utilisation of the amount credited under sub-section (5) of section 11; 
(cb)  the  fulfilment  of  other  conditions  relating  to  collective  investment  scheme  under                        

sub-section (2A) of section 11AA;] 

(d) the conditions subject to which certificate of registration is to be issued, the amount of fee to 
be  paid  for  certificate  of  registration  and  the  manner  of  suspension  or  cancellation  of  certificate  of 
registration under section 12;] 

3[(da) the terms determined by the Board for settlement of proceedings under sub-section (2) and 

the procedure for conducting of settlement proceedings under sub-section (3) of section 15JB; 

(db) any other matter which is required to be, or may be, specified by regulations or in respect of 

which provision is to be made by regulations.] 
31.  Rules  and  regulations  to  be  laid  before  Parliament.—Every  rule  and  every  regulation  made 
under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it 
is in session, for a total period of thirty days which may be comprised in one session or in two or more 
successive  sessions,  and  if,  before  the  expiry  of  the  session  immediately  following  the  session  or  the 
successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or 
both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter 
have effect only in such modified form or be of no effect, as the case may be; so, however, that any such 
modification or annulment shall be without prejudice to the validity of anything previously done under 
that rule or regulation. 

32. Application of other laws not barred.—The provisions of this Act shall be in addition to, and 

not in derogation of, the provisions of any other law for the time being in force. 

[33.  Amendment  of  certain  enactments.]  Rep.  by  the  Repealing  and  Amending  Act,  2001                        

(30 of 2001), s. 2 and the First Schedule (w.e.f. 3-9-2001). 

34. Power to remove  difficulties.—(1)  If  any  difficulty  arises  in  giving  effect to  the  provisions  of 
this Act, the Central Government may, by order, published in the Official Gazette, make such provisions 
not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty: 
Provided  that  no  order  shall  be  made  under  this  section  after  the  expiry  of  five  years  from  the 

commencement of this Act. 

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each 

House of Parliament. 

4[34A. Validation of certain acts.—Any act or thing done or purporting to have been done under the 
principal Act, in respect of calling for information  from, or furnishing information to, other authorities, 
whether  in  India  or  outside  India,  having  functions  similar  to  those  of  the  Board  and  in  respect  of 
settlement  of  administrative  and  civil  proceedings,  shall,  for  all  purposes,  be  deemed  to  be  valid  and 
effective as if the amendments made to the principal Act had been in force at all material times.] 

35.  Repeal  and  saving.—(1)  The  Securities  and  Exchange  Board  of  India  Ordinance,  1992                   

(Ord. 5 of 1992), is hereby repealed. 

(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance, shall be 

deemed to have been done or taken under the corresponding provisions of this Act. 

1. Subs. by Act 9 of 1995, s. 17, for clause (c) (w.e.f. 25-1-1995). 
2. Ins. by Act 27 of 2014, s. 22 (w.e.f. 18-7-2013). 
3. Ins. by s. 22, ibid. (w.e.f. 18-7-2013). 
4. Ins. by s. 23, ibid. (w.e.f. 18-7-2013). 

32 

 
 
 
                                                           
[THE SCHEDULE.] Rep. by the Repealing and Amending Act, 2001 (30 of 2001), s. 2 and the First 

Schedule (w.e.f. 3-9-2001). 

33 

 
