The Securities Laws (Amendment) Ordinance, 1995

REGISTERED NO. DW30M/9 5 anm.11<ot • ,.EXTRAORDINARY 1fl1r 11~-t . i.", ·· L . PART ll--8ection t . snf~I"( ~ Wlilfffl ·,: ': l PUBLISHED BY AUTHORITY : ~ ~. 11~-m, ~;r,(~, 25, 1995/'ft~ s, 1916 NEW I)ELJU, W~~A)', JA.l'l«IARY 2J. ~M.u;HA 5, 1916 .·,·~~· ~q-;~:·r~ '!q_ wwn~, ~, ~·f•ff« flfi -~· ~~fl ~mt~if tGT1'1~' '. ~ ~pame. pag,ng ~ given 10 this P~ 'in .orjer tha~ it ·DIily .be Iii~ ._ a .sepinfe .coapDadoa. r,~;-~y; :) MINIS'lllY ·OF .. J..AW,, JUSTICE ·ANI,) OOMPANY ,a:nAIRS -~ve-•nepartnient> . New Delhi, the 251th J~y; tMtM§fihd "5,' '191,g . (5'nkt) · ;·_ THE SECURITIES LAWS (AMENDMENT) ·ORDINANCE, 199S · l)to, -5 OE 19,9,5 • . ·'., ,. '. ·, \. Promulgated Ly the President"in the Forty-fifth Year of the Republic of Indi_a. ··.Ao. Ordinance to' amend the Securit~s an.<i E~hange Board of lndia : • _ Act, . 1992. and further to am,..end t,he Securities C~ntracts ( Regu- , • : .. lation) Act, 1956. • . WHEREAS Parliament. i!5 -1}9t in. ise~n-aJ!ld the'Presideru: is satisfied that • circum.stances exi,st w.luch ~er it in~sary :for him te :take immediate • . • - ~ ' ; -. . - . . . action; - ', i ,; . ; - · ._ , , Now, 'I',HEREFO,R$, i J:t exercise of ' the powers eonfe-rred by clause (1) of ·ar,ticle 123 of the ·Constitution., ·the President is pleased to promulgate t4e follo'Y~g Ordinanc~:-. :. " ' r · ' , . • , : • . • ·: •. ·'.; • '.,, - Cl{APTER I . ; . ~. . ... 1. ( 1) . ';fhis Ordman~ may· be·~ ~e rSiktJr_i~ Law~ (Amendment) · • 1995 · . • . . .. , ' . .. OrdiJ;).anc;:e; • .. • • • _ -,~ .,. , •- i:: · . (2) It ' shall com~ i~to 'force at once. : • • •• Short title and com­ men<:e­ ment. Amend. mcnt of secion 2, Amend. ment of secion 6, Insertion of new section 7A. Member not to particL pate in meeting5 in certain cases. Amend. ment of section lJ 2 • THE <1AZ1iITE OF INDIA EXrnAO!WlNARY ,· ( ''..~ =========::::-:::=:=::::::-:. ·-::::-: : ~ . ..:====--===-- • -- [P.ur ll- CHAPTER II AMENl>MENTs ro THI! SECVJll'l'JES AND ExcHANGE BOARD OF INDIA Acr, 1992 z. In section 2-·of the Securities and Exchange Board of India Act, 1992 (hereinafter in this Chapter referred to as the principal Act), for sub­ section (2), the :tollowing sub-section shall be su!Jstitu~ed, • namely:- "(2) Words and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, 1956 shall have the meanings respecti.vely assigned to them in that Act.". 3. In section 6 of the principal Act: lhe brackets and figure ''(1) ,, and clause ( d) shall be omitted. · · •• I . ... • 4. After section ·7 of·,the principal Act, the following section shall be inserted, namely: - • ''7A. Any member, who is a director of a company and who as such director has any direct or indirect pecuniary interest in any matt,er coming up for consideration _ at a meeting of the Board, shall, as soon as possible after relevant circumstan~~s 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 re~ect to, thaJ_ matter.". 5.,!~ -s~tio~:11,ot the··prJneipal Act;~ .·. ,.•: : / '.l · • \ . .• t; (< f Oi ·'la) , in. sub-section :,(2) ,- 1J/;, . , ' . -·· (i) after clause (b), the following clause shall be inserted, o:, r: . r,amely;;:-:::·, :. ' . , . JSofJ9' "(ba) registering ·and regulating the working of the t , , .. . -· depositories, custodians of securities, foreign institutional • in- .t •. • • V'estors, credit · rating agencies and such other illtennediaries as the Briare! may, by notification, specify in this behalf;"; _,_ ·;'.: -~: • • • •• •. (ii) -in clause· (c); for the words "collective investment (j; !';~/: - : 0 ~ :- - • scheme", the words ''v'entti.re· capital funds· ancl collective invest- ment scheme" shall be substituted; • ' - : ' (iii) in clause (i), for the Words ''stock exchanges and',., the . words "stock exchanges, • mutual funds,'' shall be substituted; (iv) in clause (j), the words~ ·· hrackets and figure ''the Capital Issues Control Act, 1947_ and'' shall be omitted; 29of 1947 . ' • . ( v) after. clause ( 1) , the f (!llowing clause shall be inserted, namely:- ! F « .-::, : - - : ,, , ; ,. · - " (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;"; • \_ I of 1956, nm GAZe11~ OF L~DI :\ EXlRAORDlNAltY 3 ----- - • . • , (b) after sub-s~tion (2), the foll~wing su~tio~--sh;-~ inserted, namely:- · -- ''(3)-_ Notwithstanding ~nything. contltined • in any other law • . for tbe _tune being in force while exercising the powers under :;, .• clause (,) of • sub.section (2), the Board shall have the same ~ers as are • vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit, in respect of the following matters, namely:_ r . (i) the discovery and production of books of account and oth_er documents, at sueh place and such time as may be specified, by the Board· • . . , (ii) ~oning and enforcing the attendance ot persons - and examining them on oath•- . . .· (iii) ~tion of any boob, registers and other docu­ ments of any person, referred to in section 12, at any place.". ~- After section 11 of the principal Act, the following secdon:s shall be mserted, namely:_,; _ ''ll_A. Without prejudice to the provisions of the Companies- Act, . _ .~956, the .Board tnay for the protection of inyestors, specify by regu- lations,-=-- • , . . . .. ~ . . ~ (a) the matters relating to issue of capital transfer of securities and other matters incidental thereto; and • (b) the ·manner in which such matters, shall be disclosed by the companies. 11B. 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 ~:ecurities market; or ( ii) to prevent the affairs of any intermediary or other persons referred to in section 12 being conducted in a manner deterimental to interest of investors or securities market; or • • (iii) to secure the proper management o~ any such _inter. med.iary or person, In section of new :;c;:tions llA and ItB_ Matters to be dr.,closcd by tho com. P3-nies, Powor to ;ssue dircc. tion.'I. ·t ·ssu"' such directions to any person referred to. in 'that section 1 mav 1 ~ • • • . rif and as m~y b~ • ~PP!Qpria~ in th~ jnter~ts :of 4lvestors 1n s~ : 1es the securities market. . • ~ 7 ~ lrt ~ection 12 of the principal Act,..:.. • . . . ' (a) .in sub-section . (l) ;--- ·._ . ·. , __ .. . : .. _ _. .. ._ ,, •• • :·• ·_ (i) for .the word ··~ul~". the wo~d nreguiatioll$.~ sball 1)e substituted; • Amend. ment of section 12 . Amend­ ment of section 14_ 4 THE GAZETfB OF INDIA EXTRAORDINARY [PART II-- . (ii) after the prov!so, the following proviso shall be, inserted, 'namely:-= · • • • • • • . • _. ''Provided further that a certificate of registration_ obtained immediately · before the commencement of the Securitles Laws (Arneridment) Ordinance, 1995', shall be deemed to have beeri obtained from the Board in accordance with the regulations providing f~r such ~egistratio:n.''; ( b) after sub-section (1), the following snb .. seetions &hiW be . inserted, namely: - l L~- • • • (IA) No • deposh~fy, . ~u~~an; ·~ s'equrities~ foreign institu~ tional investor, credit rating agency, or any other intermediary &ssoCiated ~ith th~· set'llritie~ market ;ss> the, Board may by noti­ fication in this behalf specify, shall buy iJr sen ot deal in securi .. ~ie3 except . UI1der. and in accordaq~e with th~ c;onditions of a cer~te of re8istration obtahred £tom the &,ard ~ accordance with the regulations made under this Act: ' . . . . :<·; Provided that a person buying or selling sedUrities or other .. wise dealing with the securities market as a depository, custo­ dian of securities, foreign institutional investor or credit rating agency immediately before the commencement of the Securities Laws (Amendment) Ordinance, 1995, for which no ;registration certificate w~, required prior .to such commencement, may con· tinue to buy or sell securities or otherwise deal with the securities market until such time regulations are made under clause (ba) a: .-.~ stib~se€Hdn (2) df section 30; :. ; ,: ; .. : :, ! ... - r ,- • • • .· : . ;~. _·\·:· ·1 -~ <; ,· (1B) No person shall sponsor .or eaus.e, to be:gponsored or carry on or caused to be carried on any v~nture . capital funds and collective investment schem~ itrcluding n1tiitihl fund's, unless ,- .. : , r_ ... he . obta~ns. a ~ertificate of. registration from . tbe Board, in accor- , · 1 • • • - . · ! ~ . . .. . . •. ,l .:.. '. ,! · ' .• ., , , _ • . ., • _ :_. ... ~ , ••-- · , -' • ~-. ~ .. > c , ,; _ : ; . 1- d~c~_w.ith. !he• regajati9~: , . '. .. -. .. ,, ,< ,," . • , ... : , ... ,1• .. . r . ,. . • . • • • -. . , ,., , . . , ., ; . , ~-- . •• , , _, .. J. -: .~-..,- Li -~, _,·. ••~ -; ., ,J ·. · (i, :--1' •· .,.. , ;.,~.• i . . J:>rpvideq that any ~rson sponsoring O:t:' causing to be sponsored, carrying ·or caused to be carried on any venture capital funds or collective investment scheme operating in the securities • • • ,. market immedi~tely . before the commencement. of the Securities :·<o.-:,-:: r • ·Laws· (Amehdment')' Ord!nance, 1995 fM which no registration · ,- certificate was required prior tc, such commencement, may con• -:::,: .• tinu_e to opera.!t;. till such timeregulati·ons are made proillding for such registration.". • • ' • • · . ,· • • •• • • · . • • , : ; , -: : ; -..-_l ::8, In section 14 ·ot .the principal Act, in sub-section (1),-· '. ~ ~·-~ (i). in clause (a), the word "and" shall be. ()lllitte4; : • . , (ii) after clause (a), th~ •~~llovy:m,g .. ~lause. 5¥1J ~e inserted, namely:- • • (t' ~ r: . · • '; .r. ... --· - .,., ~ • __ _ ,,_, ... ~~ .......... - ... , ..... , ,.,.... M • IIC. IJ T~ GAZETTE -::::-·:'. . -·-:':-----==-::::::._--::--.__ OF lNDIA EXfRAORDINARY 5 9. After Chapter;;-~ th~·.-··: ·-:-···· - - • · ~---- - - ---- ·- be inserted, namely:- 0 e principal Act, the following Qhapters shall ''CJ-L.Wr.ER VIA ~ALTJEs AND ADJUDICA'nON' . 15A. If any person wh . . • , • • 0 , 1S required under this Act or any rules or regulations Inade thereu· d • n er,- . (a) to furnish • d • · • • · fails to fur • h any ocument, return or report to the Board, Ceedin oneni:~,.~he same, he shall be liable to a penalty not ex- g <l.lUl and fifty thousand rupees for each such failure; • (b) to file . ether _1 any return or furnish any information, hooks or uocuments With th~ . • . . . fails t fiJ '- time specified therefor m the regulat1ons, al • 0 • 1 c return or furnish the same he shall be liable to a pen ty not exceedin fi. ' . n· h • g Ve thousand rupees · for every dav durmg w ic such failure continues. . . (c) to maintain h..._, f . . h • 'UV\JOJCS o accounts or records fans to m:.untam t e same • he shall '-- 1· b ' • • • uo Ia, le to a penalty not exceeding ten thousm1d iupees for every day during which the failure continues. · _1 5 B. If any person who, is regist~r-ed as an -intermediary and is reqtiir~ u nd er this Act or .my rul~s or regulations made thereunder 1!0 enter mto an. agreement with his client, fails to enter into such · a·gree.mcnt, he shall be liable to a penal~y not exceedin!! five · lakh rupees for every -• iSuch, failure. - . ~ , 15C. If any person who, is registered as an intermediary, after hav­ ing been called upon by the Boord in writing to redress the grievances of invest~rs, fails to redress such grievances, he shall be liable t~ a penalty not exceeding ten thousand . rupees for each s•:ch . failure,, ' ,, • t5D· If any person _who, :~ · {a) ·required under 'this Act or any' rul~s or regulations made thereunder to obtain a cer~ificate of registration from tl)e Board for spo~oring or carrying on any coll~ive investment scheme,· including mutual funds, sponsors or carries 011 any collective • investment scheme, including mutJal funds, without obtaining_ such certificate of registration, be. shijll be liabie to· a penaltiY· not ex~.eding ten thousand rupees for each day during which h~ canies o~ any -suc.\J.. collective. investment scheme, including mutual funds, or • ten · ,la~h . rupees, whichev~r is ,higher; (b) registered 'with the . Board as a . coll~tive iiwestment ,scheme, : including mutual funds, for sponsoring ·. or carrying on any · invest­ .. ment sch:me, fails t(). comply with th~ terms, and conditi?ns. of certi· ficate of registration, he shall be liable to . ; a; ·penalty· ~t exceeding ,,. f Insertion of new Chapters VIA and vm. Penelty for failure t<> iurnJsh infor_ mation. return,. etc. Penfllty for failure by any person . tc:, enter into: agreement with . clients, Pen-alty • • for failure to redress: investors• g'I'iev_ ances.. , Penalty· for certain defaults in ca•3eof mutual funds. Penalty for failure 10 observe rules and regula.. lions by an asset manage_ ment company_ Ponalty for • defeult in case of stock brokers. 6 THE GAZETTE OF INDIA EXTRAORDIN,,Rt : teri thou~ i-upees for e~ch day· during.which ;~ch friiiur~ ~ntin~es or ten lakh rupees, whichever is higher: (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 penalty not exceeding five thousand rnpces for each day dui-ing which such failure continues . or five lakh • ru'pces, whichev:(!r is higher; . · • • - , ' • (d) regisibred as a collective • investment • schem~. • including mutual funds fails to despatch unit cc11ificatcs of any scheme in the manner provided in the regulation governing such despatch shall be liable to a; penalty a sum not exceeding five i11ousMd rupees for t . . . e_ach. day .. during _wh~b: su<;h failur~ ccntinues; ' (e) registered as a collective investment • scheme, including mutual funds or fails to refund the application monies paid by tJ1e investors wi~hin the period specified in the regulaticms, he s1iall be liable to a penalty not exc:!,cding one thousand rupees _for ead1 day during which such failure continues; (/) registered as a collective investment scheme, including mutual Funds fails to invest money collected by such collective invest· ment schemes in the manner or within the period :Specified in the regulation, he shall 1bc liable to a pzna1ty not exceeding five Jakhs rupees for each such failure. 15~. Where any asset management company of a mutual fund re­ gistered under this Act, fails to comply with any of the regulations pro­ viding for restrictions on the activities of the asset management com­ panies, such asset management company shall be liable to a penalty not excieeding five lakhs rupees for each such failure. I SF. If any person who, is registered as a stc;ck broker und~r this Act- (a) fails to issue contract notes in the forun and in the numncr specified by the stock exchange of which such broker is a member, he shall be liable to a penalfy not exceeding five times the amount for which the contract note was . required to be. issued by that broker; . ' • • (b) f.ails to deliver any security or· fails to make paym~nt of the amount due to t11e investor in the mauner or within the period specified in the regulations, he shall be liable to a. penalty not ex­ ceeding five thousand rupees for each day during which such failure continues; (c) charges an amount of brokerage _which is in excess of the brokerage as may be specified in the regulations; he • shall be liable to a penalty not exceeding tfi.vc thousand mper,s or five times the amount of btokerage charged in · excess of ·the specified brokerage, whichever is higher. • : r :. • •• • • • • ssc_. __ .~l __ - rn.r. GAZETTE QF , :=:-:------ -- •-----~ • INDIA EXTRAORDINARY -----~ 15G. If any insider .. .1. ---~ ... uO,-:- _ (i) either on his d · J • own behalf ea s 1n .securities of boc < or on behalf of any other p;!rson, , _ , . _ . . basis ?f any . unpublis~d 1 ~ corpor_a~e--o~ any stock cchange on the -_.., ' • --- -_, .• . ' . - : . _price sensitive mformafion· o.r ,, ' : . ~ . • - . ' - • (ii) CO.mm,unkates :a~l • _ • - to any person, • h _Y unpublished price sensitive information -. \VJ.t or without ihis except as required in the ord· • r~quest for such information J.:lVl; or _ . . mary course of business or under any . . • (iii) counsels or . . .. securities of any bod pwcm cs for, any other 'p;:rson to deal in any sensitive,, information,~ corporate on the basis of unpublished prkc shall be liable to a penalt • • • . • -• Y not exceeding five lakh rupees. 15H. If anj person wh . . . , regulations made th d- o, ~ required under this Act or any rules or - ereun er fails to,- " • te(i)bedfisclose -the aggregate of a share holding io the body cor- pora ore h a • • • _ e cqu1res -any share, of that body cor.porate; or (ii) make a puiblic ann ~ • . , ouncemen,1 to acqmrc • shares at a mini· _m~ pnoe~ he shall be liable to -a penalty not exceeding five lakh rupees. ' t . •• 151. (1) For the pul1)0se of ~djudging under s~tion ·15A, 15B, l5C, 150, 15E, 15F, 150 and 15H, the Board shall -appoint any of its officers not below the rank of Division Chief to be an adjudicating officer for ,; • holding an inquiry in -the . prescribed manner after giving any pe'rs<>n concerned a reasonable opportunity of being heard for the purpose of imposing any penalty. • (2) While holding an inquiry the adj,udicating . . olncer 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 prodm:c any document --which in ~ e opinion of the adjudicating officer, may be useful for or relevant to the subject matter of the inquiry and if, on such inqtin:y, he is satisfied that the person has failed to comply with the provisions of sections specified in sub-section ( 1), he may impose such penalty .is . )l.e ~inks fit in accordance with -the provisio-.:is of any o( those sections., r ·.- - .._ ~-. ,. • -15J •. While adjudging , ,q:uan:tum ·of p~I?,a:lty .u~_der sec;tion 151, the • adjudi~ting officer • shall Iiavc due _ .. regard to t~p fqllowi~g )/let ors, • namely:- • ,. ; ' • • (a.) the amoun:t' c/f :disproportion~'te gain or unfair advan­ tage, -~h~rever quantifiable, made as a result o'f the defa:ult; . (b) _.the amount ~f_ loss. caused . to an jnvei;to~_ <>r group o'f inve~tors as a resuJ.t. of_ the defawt; .-,r . . : . , _ (c) 'tlie repeti'tivei nature of the· ·defaulr. • for insider 1rading_ Pe11alty for non-dis dosure of acqui,, i_ tion of shares and take. oven. Power to - . adjudi_ • • cate. Factors to be taken into account hy the adjudL eating, officer . Establish· nient of Securi­ ties Ap· pellate Tribunals, Compo· .;ition o! Securi­ ties Ap· pellate Compo- Q,ualifka· tions for • appoint­ ment as PresidL,n Officer of the .. Securi- ties Ap· pellatc Ttibuna1. Terms of! office, Salary and allow­ ancea and other terms and conditions of service -of Presid­ ing Offi· cers. Filling · up of · • vacanies. Resigna­ tion and removal 8 ·n-1e UAZETTB OF .INDIA BxnAOROINARY CHAPTER VIB E.s'rABLISHMENT, JURJSDICTION, AUTHORI'l'); A}jJ) PROCQ>URE Op APPELLATE 'fi.tBUNU 15K. (1) The Central Government shall, by notification, estab. lish one or more Appellate Tribunals to be kn.own ~ the Securities Appellate Tribunal to exe!rcise the jurisdiction, powers ;:ipd Autho­ rity. conferred on such Tibun~l by r,r under this Act. (2.) The Central Government shall also specify in the notifica .. tion referred to in s'.Ib-section (1) the matters and places in relation to \Vhich the Sec.urities Appellate Tribunal may exercise jurisdiction. 1.!1L. A Securities Appellate Tribunal shall consist of a one person only (hereinafter referred to as the Presiding Officer o'f the Securi­ ties Appellate Tribunal) to be appointed, ·by natlification, by the Central Government. ; I • · • I .- : 15M. A person shall not be qualified for appointment as the ' Presiding Officer of a Securities Appellate 'l'rib'Una1 unless he-- ( a) is, or has been, <:Jr is qualified to b~, a Judge of a High ·,u,:,, Coun; or •. ,,, (b) has been a member of the In~an Legal ~ervice and has he.ld a post in Grade I pf ~at Service 'for ,at least .t:hree years; or ( c) has held office as the Presiding, Officer , of 11 Tribunal for at least three yeai-~ • . • ·,- • ' , • . • ~ • . i5N. · The Pr-esiding Officer -0f a Seeurities Appellate 'I'rfbunal -sha1I hold office -for a term .of -five years from • the date ffll ·which he enters upon his office or until he' attams tht:: age of sixty-five years, whichev~r is earlier. 150. The salary and allowances payable, ,;to' and the other terms and conditions of' · service i (incl'uding pension, gratuity and other retirement benefits) olf, the Presiding ·Officer of a Securities Appel­ late Tribunal shall be such as may be prescribed: , . , r - . Provi~ed that neither t'he • salary • and · allowances nor the other terms and conditions • of service of the · said Presid­ ,- ing Officers shall be varied to their disadvantage: ,aft-er appointment. . 15P. • If, for · reason other than temporary absence, any vacancy , occurs in the office of the President Officer of a Securities Appellate Tribunal, then the Central Government shall ap~int another person in accordance with the provisions of this Act to fill the · vacancv and ·•the proceedings may rbe . e9ntinued ·before the Securities Appellate 'Tiribunal from . the stage 111 which the y~cancy is filled. ·. , . . ' 'I 15Q. (1) The Pre~iding Officer of a ·securities Appellate Tribunal may, by notice in writing- under his hand addressed to the Central Government, resign his offi<"e: - SEC. 'l] • ··l'ife.-G A!~t:- . ,..~~TIE· OF ·IND · · · • - · - • -· - --- - ·--- • IA EXTRAORDJN. · - -· - - ·-··-- •• • • • - -- ::::-~ :.. -.:..: _ . .. 1 ARY ') . Provided that the said ~ ..:.::::._:_~·.:-.· •• : ::-. • :. :..:.: ::-.- -::--··- ·-·::----::---:"'.""-· • • nutted by the Centra1 Go es1d1ng Officer shall, UJiless he is per­ continue • to hold ofli vernrneut . to relinqujsh his office sooner d t f ce untjJ the x . f ' a e o receipt of such ti e piry o three month<: from tlhe ~ successor enters u no ~ or until a person duly appointed as term of office, Which Pon . s • office or until the expiry of his • ever Is the earliest. (2) The Presiding Oflke _ _ ~ . . _ .. . shall not be removed, from ~; 0 1. ,L :SC ... urit:-~s Appellate [ nbunal Central Government on th :us office except _ by an order by the after inquiry made by 'a 1 ~ :round of proved misbehaviour or incapacity ing Officer concerned h u gc of_ ~e Suprem e- Court, h1 which the Presid­ ;,iven a reasonable O as ~een informed of the charges: against him and 0 Pportu'll!ty f b • h • • 0 eing • card in respeci of these charges. • (3) , The Central - Gove-cnt may b. l . the procedure for the investigation o·f m-' b hy . rues, rcguJate h f • Is e aviour or incapacity of t e a oresa1d Presiding Office'!'. 15R. No order of th C •· l G . th • p .di • e . entra overnment appointing any person as e res1 n • om ' , .. all d • _g cer of a Secut'ities Appellate Tribunal shall be cla ; 11:t. queSlion in any manner, and no act or proceeding before s>ecurt Ies App 11 --n..·b • e at u:1 unal shall be called in ql!estion in :my manner _ 0 ~ the ground merely of any defect in the · constitution of a Securities Appellate Tuibunal. - ·· .•' ·' '· • 15S. • (1) The Central Government shall provide the Securities Appellate Tribunal with S'Uch ~fficers _ and employees as that Gov­ e'rrunent may think fit. (2) Thei officers and employees of the Securities Appellale Tribunal shall discharge their functions under general· superinten­ dence of the Presiding Office'!'. (3) The salaries and · allowances and other conditions of service of the officers and employees of the Securities Appellate Tri.bunal shal) be sue~ as may be prescriqed. 1ST. (1) Save as provided in su:l}·section (2), any person aggrieved by an order made, or deemed ro • have been made. by an Adjudicating Officer under this Act, Illay prefer ·au appeal to a Secu!ities Appellate Tribu'Q'al h~vfog jurisdiction in ;~he _matter. • • (2) No appeal shall iJ.ie to the Securities Appellate Tribunal fro.,-n • •• an order made by an Adjudicating Offi.ce'r with the · consent of the parties .. (3) Every appeal under sub-section (1) shall be filed within a period • of -forty~ve days from the date on whi~b ~ c~py of the ~rdeir ~ade, or deemed to have been made, by the Ad1ud1catmg Offi~r 1s received by ·him and it shall he in such form and be accompanied by such fee- as may be prescribed; Orders constitut· ing Ap­ pellate Tribunal io be final and not to invali- d :1te its proceed­ ings. Staff of the Secu­ rities Appel. late Tri ­ bunal. ?,-1)pea1 to the Securities Appellate Tribunal. Proce­ dure and power.; of the Sccuri.• ties Ap· pellate TribunaL Right to legal rep· re.,enta .. tion. IO THE GAZETTE OF INDIA .EXTRAORDINAlt\' (PAU 11 - -. ' Provided that the Securities Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days n 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 App~IJate Tribunal may. after giving the ,parties to the appeal, an op-­ pottunity of bcoog heard, pass such orders thereon as it thinks fit. con~ firming. 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 parties ta the app-tal and to the con:::cmed Ad· judicating Officer. ' ( 6) The app~al filed before the Securities Appellate Tribunal under _:;Ulb-scction (1) shall b:.; dei:11t with by it as ~xpediti-ously as possible and endeavour shall be made by it 10 dispose of the app~al finally within si,c montJ1s f1fom; the date of receipt o'r the appeal. 15U. (1) The Securities Appellate Trihuna1 shall not be bound by the procedure laid down by the Code of Civil Proceduire, 1908, but shall 5 of 1908_ be guided by the principles of naturaf justice and, subject to the other provisions of this Act and of any rules. the Securities Appellate Tribunal shall have powers to regu)a,te their own procedure including the places at which they shall have their sittings. • (2) Th~ Securities Appellate Tribunal shall have. for the purposes of discharging their functions under this Act, the same powers as are vested in a civil coUlrt under the Code of Criminal • Procedure, 1908. while trying a suit, in respect of the following matter, namely:- ( a) summoning and enforcing the attendance of any person and ,examining him on oath; (~) requiring the discovery and, profiu9"tion . of documents; ( c) receiving evidence on ·affidavits; - (d) • issuing commissions for the examination ·of witnesses or documents; ( e) reveiwing its decisions; (f). dismissing . an · applicaiton for .. default or _deci,ding it cx­ parte; (gj 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) Any proceeding before the Securities Appellate Tribunal • shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for th..:: purposes of section 196, of the Indian Penal Code and the Securities Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 an,d chapter .XXV1I of the Code of Criminal Procedure, 1973. 15V .. The Appellant may either appear in person or authorise one or more legal practitioners or any of its officers to present his or it!s case before the Securities Appellate Tribunal. 2 of 1974. t Sl:C. l] TliEGAZETn: ··---:::::::::::---_ ·--~-~~A __ EXTRAORDINARY l l • 15W The p . . ·--- -. - ·-· ···----• ' · , • · rov1s1ons O . . - ·· - may be. apply to f the Lnrutation Act 1963 shall as f an appeal Ill d . • , , ar as . . , . . a e to a Securities Appellate Tribunal. 15X. The Pre ·ct· • . . Sec • . s1 ing Officer a d h . a unties Appell t Tr· n ot er officers and employees of vants Within the m a e_ ibunal shall be deemed to be public S{!t- • • • .. eani?g of section 21 of· the _Indian Penal Code. . • 15Y N, • • · • ., • . • o civu coun shall ha or proceeding · in res ' Ve Jurisdiction to entertain any suit appointed under th· peAct of any matter which an adjudicating officer . .• . is ct or a Se . . • • tltuted under this Act is • curnies Appellater Tribunal cons- mine and no injuncti hem! powered by or under this Act to deter- •. . on s a 1 be granted by oruy in respect of an . any court Or other auth- y action taken or t b k . any power confe'red 1-. . 0 e ta en m pursuance of . f-'Y OJ under this Act. . , ti;o,z A • · • · , . . " • ny Person . aggrieved b . . . . - unties Appellate Trihuna Y any decision or order of the Sec- within sixty da f 1 may file an appeal to the High Co·..11 t or order of the ~ r~~ the date _of communicalion of the ·decision of fact or law ·· a .. _unties Appellate Ttib'una1 to him on any question t 1s1ng out of such order: Pr~vided that • th , H'' h • c· , a eliant • • • e · ig · ourt may, if h is _satisfied that the ~~- h was_ prev~nted by s'~ffl.cient cause from filing the appeal w1 in t . e said period allow it to he· filed wi'th· fu....n.. . d • • , 1n a n,uer peno not exceedthg sixty days.''. . - .. . . . - 10. In section 18 • of the principal Ac~. in ~ub-section (2) fur the • wor~ "sixty days", the words ''ninety days" shall be substitu;ed. , . . _ 11. !11 section 23 of the principal A£t, the word "Board'.' shall be in- • serted after the words "Central Government'\ · • • ' i 12. For section 24 af the principal Act, the foildv.ririg • section shall be substituted, namely: - Lirnita• tion. Members and staff of Secu- rities Ap pellate Tribunals ' to be pub. lie ser- vants . Bar of Jurisdic- tion of courts. Appeal to High Court. Amenq­ ment of . section 18. Amend­ ment of section 23. Substitu­ tion of new sec­ tion for section 24. cc24, (1) Without prejudice to any award of penalty by the Offiences. , . adjudicating officer 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, shall be punishable with imprisonment for a term which may extend to one year, or with fine, or with_ both. v (2) If any person fails to pay _the ~nalty !111P?5ed __ by the adjudi­ cating officer or fails to comply with any of his directions or orders, he shall be punishable with imprisonment for a tJenn which shall ?ot be less than one month but which may extend to three years or WJ.th Amend­ ment of section 26. Omission ofsect.ion 28. Amend· mcnt of section 29. .~ . .mend­ ment of scc)ion 30. · Amend· ment of Preamble. Amend­ ment of section 8. Amen d­ ment of section 10. 12 I'HE GAZETIE OF INDIA EXTRAORDINARY fine which shall not be less than two thousand rupees but which may, extend to ten tnousand rupees or with both,". • 13. In section 26 of the principal Act, in sub.section (1), the words ·'with the previous sanction of the Central Government'' shall be emitted. - ' •• i • 14. Section 28 of the principal Act shall be omitted. 15. In section 29 of the principal Act, in sub.-section (1) ,­ ( i) clause (c) shall be omitted; (ii) after clause · (d), the following clauses shall be inserted, namely:- • • • - • " (da) the manner of inquiry under sub-section (1) of section 15!; (db) the salaries and allowances and other terms and con­ ditions of service of the Presiding Officers and other officers and employees of the Securities Appellate Tribunal under section 150 and sub-section (3) of section 15S; (de) the procedure 'for the investigation of misbehaviour or incapacity of the Presiding Officers of the Securities Appellate Tribunal under sub.-section (3) of section 150; (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;". 16. In section 30 of the principal Act, in sub-section (2) for clause ·(c), the following clauses shall be substituted, namely:--"'"'. . . . . . ' • . . . . • . ,\(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; . ' - . . ' , .' . . . • ( d) the conditions subject to which registration certificate is to be issued, the amount of 'fee to be paid for registration certificate and the manner of suspension or cancellation of registration certificate under section 12. ~. CHAPTER nr .AMENDMENT TO THE SECURITIES CONTRACTS (RE~ULATI~N) 4 ~T, 195'6 . '17. In the Securities Contracts (Regulation) Act, 1956 (hereafter In 42 of 1956. this Chapter referred to as the principal Act), in the preamble, the words "by prohibiting optipns and" shall be omitted. · ·1s~ In section 8, in ·sub-section (1), for the words "six ~onths", . the words "two months'' shall be substituted. 19. In sectron 10 of the principal Act, in sub-section (3), for the wordS ~•sjx months", the words "two months'' ·shall be substituted. · --- , ·- zo. After section 13 of the princi-pat Act, the following section shall be inserted, namely:- •. "l3A. A_ stock ex.change may estabish addilional trading floor Wl.~ ~he pnor approval of the Securities and Exchange Board of Ino1a 1n a(:(:ordance with the terms and conditions stipulated bY, I.be said Board. . .. • E:cplanation.-For the purposes, of this section, "additional trad:! ing floor" means a trading ring or trading facility offered, by a recog­ nised 'Smck exchange outside its area of operation to enable the investors to buy and sell securities through this trading floor under the regulatory framework of that stock exchange.''. 21. Section 20 of the principal Act shall be omitted. • 21,. For section 21 of the principal Act, the following section shall be substituted, namely: - ~~ - ~ i•21. Where securities are listed on the application of any person in any recognised stock exchange, such ,person shall comply with the condi· tions of the listing agreement with that stock exchange." .. 23. In section 23 of the principal Act,- {a) in sub-section (1), clause (d) shall be omitted; Insertion o[ new section 13A. Addi­ tional trading floor. Omission of section 20, SubstitU• tion of new sec· tion for section 21. Condi­ tions foL· listing, Amend· ment of section 23 . (b) in sub-section (2), for the wor<ls and figures "or who fail,; to comply with the \orders of the Securities and Exchange Board of Tndia under section 21 '', ~e words and fi,,,oUres "or who fails to comply with the provisions of section 2 l or with the orders of' shall be substituted. 24. In section 30 of the principal Act, in sub-section (3) , the words "shall be subject to the, condition of previous publication and shall be omitted. SHANKER DAYAL SHARMA, President. K. L. MOHANPURlA, Secy. to the Govt. of India. Amend­ ment of section 30. --·- -· ---- - ~--- • OP,. OOVBRNMll~ · ~;-~v.--~;;~ ·-~,;NTO ROAD, Nl.F.9,W9' DELm PRINTl!D BY TD MAN.61 ' OF pUBLlC.I.TIONS, DELHI, ... lly Tin! cor-.'TROLLER ANO PUBLISHED