## Report on Securities and Exchange Board of India Intermediaries Amendment Regulations, 2021
**1. Executive Summary:**
This report analyzes the Securities and Exchange Board of India (SEBI) Intermediaries Amendment Regulations, 2021, as published in the Gazette of India on January 21, 2021. This amendment modifies the Securities and Exchange Board of India Intermediaries Regulations, 2008. The core purpose of these amendments appears to be to revise and refine the procedures related to inquiries, recommendations, and orders pertaining to SEBI-registered intermediaries. Key findings include substantial changes to regulations 25, 26, and 27 concerning the process of holding inquiries, recommending actions, and issuing orders and the omission of regulation 28. The amendments outline detailed procedures for issuing notices, conducting hearings, and recommending and implementing actions against intermediaries found in violation of securities laws.
**2. Introduction:**
This report provides an informative analysis of the Securities and Exchange Board of India Intermediaries Amendment Regulations, 2021, based solely on the text published in the Gazette of India on January 21, 2021. The purpose is to inform affected parties of the specific changes introduced to the existing regulatory framework.
**3. Policy Overview:**
* This is an **Amendment** to the Securities and Exchange Board of India Intermediaries Regulations, 2008.
* **Core Objective(s) as inferred from the provided text:** The primary objective of these amendments is to refine and clarify the procedural framework for handling inquiries, making recommendations, and issuing orders related to potential violations by SEBI-registered intermediaries. This includes specifying timelines, providing opportunities for hearings, and defining potential actions that can be taken.
**4. Background and Rationale:**
* **(Amendment):** The amendments likely aim to address perceived gaps or inefficiencies in the existing 2008 regulations regarding the handling of inquiries and disciplinary actions against intermediaries. Based on the detailed procedural changes outlined in the amendment, it seems designed to provide greater clarity and standardization to the investigation and enforcement process, potentially ensuring fairness and efficiency. The changes likely resulted from experience gained during the implementation of the initial regulations.
**5. Key Provisions / Changes:**
The amendment introduces the following key changes:
* **Regulation 25 (Holding of Enquiry):** This regulation is substituted entirely.
* **Old Rule (Inferred):** The previous procedure for holding an enquiry is entirely replaced.
* **New Rule:** The new rule outlines a detailed procedure for initiating and conducting an enquiry, including:
* Issuing a show-cause notice to the person under enquiry, specifying the alleged contravention.
* Allowing the noticee a period (not exceeding 21 days, extendable with justification) to submit a written reply with supporting evidence.
* Providing copies of relied-upon documents and relevant extracts of inquiry reports.
* Granting inspection of documents upon request, within a specified timeframe (30 days from request receipt).
* Offering an opportunity for a personal hearing, except in cases of non-payment of fees, wilful defaulters or fugitive economic offenders.
* Specifying procedures for cases where the noticee fails to respond or appear for a hearing.
* **Effect of Change:** This provides greater procedural clarity and explicitly outlines the rights and responsibilities of both the designated authority and the person under enquiry, fostering a more transparent and structured process.
* **Regulation 26 (Recommendation of Action):** This regulation is also substituted entirely.
* **Old Rule (Inferred):** The previous rule is entirely replaced
* **New Rule:** This regulation now details the permissible actions that can be recommended by the designated authority following an enquiry, including:
* Disposing of the proceedings without adverse action.
* Cancellation of registration.
* Suspension of registration for a specified period.
* Prohibition from taking new assignments/contracts or launching new schemes.
* Debarment of an officer from being employed/associated with registered intermediaries or other market participants.
* Debarment of a branch/office from carrying out activities.
* Issuance of a regulatory censure. A maximum of five regulatory censures may be recommended for the same certificate of registration before harsher penalties are considered.
* It states that the designated authority shall endeavour to submit the report within one hundred and twenty days from the date of receipt of reply to the notice or date of personal hearing, whichever is later.
* **Effect of Change:** This change aims to clearly define the range of potential actions, providing more predictability and guidance for both the regulator and the regulated entities. The inclusion of a timeline for report submission intends to improve efficiency.
* **Regulation 27 (Order):** This regulation is also substituted entirely.
* **Old Rule (Inferred):** The previous procedure is entirely replaced
* **New Rule:** This regulation outlines the process for issuing orders based on the designated authority's recommendations, including:
* Forwarding the report to the noticee and soliciting a written submission.
* Allowing the noticee up to 21 days to respond, extendable with justification.
* Potentially remitting the matter back to the designated authority for further enquiry.
* Offering a personal hearing where cancellation of registration is recommended or being considered, unless explicitly determined unnecessary.
* Specifies a timeline of one hundred and twenty days from the date of receipt of submissions under subregulation 2 or the date of personal hearing, whichever is later, to pass an appropriate order.
* **Effect of Change:** This aims to streamline the order-issuing process, ensuring that the noticee has an opportunity to respond to the designated authority's report before an order is passed. The change intends to enhance procedural fairness and transparency.
* **Regulation 28:** This regulation is omitted entirely. The content of the previous regulation cannot be determined from the text alone.
**6. Target Audience and Stakeholders:**
The primary target audience and stakeholders are **SEBI-registered intermediaries** and their associated personnel (officers, branches). This includes entities such as brokers, investment advisors, portfolio managers, and other market participants registered with SEBI. The amendment also affects individuals or entities being investigated.
**7. Implementation Aspects (Inferred):**
* **Responsible agency/bodies mentioned:** The Securities and Exchange Board of India (SEBI) is the primary responsible body. The text also mentions "designated authority" and "designated member," which are likely internal positions within SEBI responsible for conducting inquiries and issuing orders, respectively.
* **Timelines or procedures specified in the text:** The text specifies timelines for responding to notices (21 days, extendable), inspection of documents (within 30 days of request), submission of report (120 days from date of receipt of reply to the notice or date of personal hearing), and passing an appropriate order (120 days from the date of receipt of submissions or the date of personal hearing). Detailed procedures for conducting inquiries, recommending actions, and issuing orders are outlined in the amended regulations 25, 26, and 27.
* **(Amendment):** The key implementation aspects relate to ensuring that the designated authorities adhere to the new timelines and procedures when initiating and conducting inquiries. Intermediaries need to be aware of their rights and responsibilities under the amended regulations, particularly the process for responding to notices, requesting document inspection, and seeking personal hearings.
**8. Expected Outcomes / Impact of Changes:**
* **(Amendment):** The likely intended outcomes of these changes include:
* Enhanced procedural clarity and fairness in investigations and disciplinary actions against intermediaries.
* Increased efficiency in the handling of inquiries and the issuance of orders, potentially leading to quicker resolution of cases.
* Greater transparency in the decision-making process, fostering confidence among market participants.
* More consistent application of sanctions and remedies for violations of securities laws.
* Reduced ambiguity, thereby improving the process
**9. Conclusion:**
The Securities and Exchange Board of India Intermediaries Amendment Regulations, 2021, represent a significant refinement of the regulatory framework governing SEBI-registered intermediaries. By clarifying procedures, specifying timelines, and outlining permissible actions, these amendments aim to enhance the fairness, efficiency, and transparency of SEBI's enforcement process. Understanding these changes is crucial for all affected intermediaries to ensure compliance and navigate potential enforcement actions effectively.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body in India, often referred to as SEBI.
Securities and Exchange Board of India Act, 1992: The act under which the Securities and Exchange Board of India (SEBI) derives its powers.
Securities and Exchange Board of India Intermediaries Regulations, 2008: Regulations pertaining to intermediaries under SEBI's jurisdiction.
Securities and Exchange Board of India Intermediaries Amendment Regulations, 2021: Amendment regulations to the Securities and Exchange Board of India Intermediaries Regulations, 2008.
Official Gazette: The official government publication where regulations are published.
Securities and Exchange Board of India Stock Brokers and SubBrokers Amendment Regulations, 2008: Amendment regulations to the Securities and Exchange Board of India Intermediaries Regulations, 2008.
Securities and Exchange Board of India Intermediaries Amendment Regulations, 2009: Amendment regulations to the Securities and Exchange Board of India Intermediaries Regulations, 2008.
Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2014: Regulations pertaining to Foreign Portfolio Investors under SEBI's jurisdiction.
Securities and Exchange Board of India Intermediaries Amendment Regulations, 2016: Amendment regulations to the Securities and Exchange Board of India Intermediaries Regulations, 2008.
Securities and Exchange Board of India Intermediaries Amendment Regulations, 2017: Amendment regulations to the Securities and Exchange Board of India Intermediaries Regulations, 2008.
Securities and Exchange Board of India Regulatory Sandbox Amendment Regulations: Amendment regulations by the Securities and Exchange Board of India
Mumbai, Maharashtra: City in India, location of SEBI headquarters.
New Delhi, Delhi: The location where the document was printed.
AJAY TYAGI: Chairman of SEBI at the time of this notification.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-एम.एच.-अ.-21012021-224625
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CG-MH-E-21012021-224625
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असाधारण
EXTRAORDINARY
भाग III—खण् ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 40] िई ददल्ली, बृहस्ट्प जतिार, िििरी 21, 2021/माघ 1, 1942
No. 40] NEW DELHI, THURSDAY, JANUARY 21, 2021/MAGHA 1, 1942
भारतीय प्रजतभजू त और जिजिमय बोड ड
अजधसचू िा
मुम् बई, 21 िििरी, 2021
भारतीय प्रजतभजू त और जिजिमय बोडड (मध्यवर्ती) (संिोधि) जिजियम, 2021
स.ं सबे ी/एलएडी-एिआरओ/िीएि/2021/07.—बोडड, भारतीय प्रजतभूजत और जिजिमय बोडड अजधजियम, 1992
(1992 का 15) की धारा 30 द्वारा प्रदत्त िजियों का प्रयोग करत े हुए एतद्द्वारा भारतीय प्रजतभूजत और जिजिमय बोडड
(मध्यवर्ती) जिजियम, 2008 का और संिोधि करिे के जलए जिम्नजलजखत जिजियम बिाता ह,ै अर्ाडत ् :-
1. इि जिजियमों को भारतीय प्रजतभूजत और जिजिमय बोडड (मध्यवर्ती) (संिोधि) जिजियम, 2021 कहा िा सकेगा ।
2. ि े रािपत्र म ें उिके प्रकािि की तारीख को प्रिृत्त (लाग)ू होंगे ।
3. भारतीय प्रजतभूजत और जिजिमय बोडड (मध्यवर्ती) जिजियम, 2008 म,ें -
(I) वववियम 25 जिम्नजलजखत से प्रजतस्ट्र्ाजपत हो िाएगा, अर्ाडत् :-
"िााँच करिा
416 GI/2021 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
25. (1) जिस व्यजि के जखलाफ िााँच िुरू की गई हो, उस व्यजि को पदाजभजहत प्राजधकारी (डेजसग्नेटेड अर्ॉररटी)
सूचिा (िोरटस) िारी करेगा, तादक िह व्यजि यह कारण बताए दक उसके जखलाफ िो कारडिाई करिे का जिचार
दकया िा रहा ह ैउसकी जसफाररि क्यों ि की िाए ।
(2) िोरटसी से, सूचिा (िोरटस) में जिधाडररत की िाि े िाली अिजध (िो उसकी तामील होि े की तारीख से इक्कीस
ददिों स े अजधक की ि हो) के भीतर, सूचिा (िोरटस) का जलजखत ििाब (इस प्रकार प्रस्ट्तुत दकए िाि े िाल े
जलजखत ििाब के समर्िड म ेंयदद कोई दस्ट्तािेिी सूबत हो, तो उसके सार्) प्रस्ट्तुत करि े की अपेक्षा की िाएगी:
परंतु यह दक पदाजभजहत प्राजधकारी, िोरटसी द्वारा पयाडप्त आधार ददए िाि े पर और जलजखत रूप में कारणों को
दिड करि े के बाद, सूचिा (िोरटस) में जिधाडररत की गई समयािजध को बढा सकेगा ।
(3) उप-जिजियम (1) के तहत िारी की गई प्रत्येक सूचिा (िोरटस) में िोरटसी द्वारा दकए गए कजर्त उल्लंघि का
उल्लेख दकया िाएगा, और सार् ही प्रजतभूजतयों (जसक्यूररटीज़) स े संबंजधत उि कािूिी प्रािधािों [प्रजतभूजत
जिजधयों (जसक्यूररटीज़ लॉज़) के प्रािधािों] अर्िा बोडड के उस जिदेि या आदेि का भी उल्लेख दकया िाएगा
जिसका कजर्त तौर पर उल्लंघि दकया गया हो ।
(4) उप-जिजियम (1) के तहत िारी की गई सूचिा (िोरटस) के सार् उि दस्ट्तािेिों की प्रजतयााँ भी लगाई िाएगाँ ी
जििके आधार पर बोडड द्वारा सचू िा (िोरटस) िारी की िा रही हो और सार् ही उि ररपोटों के संबंजधत जहस्ट्सों के
अंि भी लगाए िाएाँग े जििम ें दकसी िााँच, अन्िेषण (तहकीकात / इन्िेजस्ट्टगिे ि) या जिरीक्षण, यदद कोई हो, के
जिष्कषों का जिक्र दकया गया हो ।
(5) यदद िोरटसी उप-जिजियम (2) के अिुसार जिधाडररत की गई अिजध के भीतर ऐसे दस्ट्तािेिों का जिरीक्षण
करिे की मांग करता ह ै और पदाजभजहत प्राजधकारी की राय में इसकी मंिूरी दी िा सकती हो, तो ऐसे म ें
पदाजभजहत प्राजधकारी दस्ट्ताििे ों के जिरीक्षण की तारीख तय करत े हुए सूचिा (िोरटस) िारी कर सकेगा या
करिा सकेगा:
परंत ु यह दक दस्ट्तािेिों के जिरीक्षण की तारीख ऐसा जििेदि प्राप्त होि े की तारीख से तीस ददिों के
भीतर की होगी ।
(6) पदाजभजहत प्राजधकारी व्यजिगत सुििाई का अिसर प्रदाि करेगा और िोरटसी की सुििाई की तारीख तय
करते हुए सूचिा (िोरटस) िारी करेगा या करिाएगा:
परंत ु यह दक जिि मामलों में िोरटसी िे कजर्त तौर पर संबंजधत जिजियमों (रेग्यलू ेिन्स) के प्रािधािों के
अिुसार बोड ड को रजिस्ट्रीकरण फीस या कोई दसू री लाग ू फीस अदा करि े म ें असफल रहा हो या दफर िोरटसी को
इरादति चूककताड (िािबूझकर चूक करिे िाला / जिलफुल जडफॉल्टर) या भगोडा आर्र्डक अपराधी (फ्यूजिरटि
इकोिॉजमक ऑफेन्डर) घोजषत दकया गया हो, उि मामलों में व्यजिगत सुििाई का कोई अिसर प्रदाि िहीं दकया
िा सकेगा ।
(7) यदद िोरटसी उप-जिजियम (1) के तहत िारी की गई सूचिा (िोरटस) का ििाब ि द े या दफर सुििाई की तय
तारीख को हाजिर होिे में असफल रह े और पदाजभजहत प्राजधकारी इस बात से संतुष्ट हो दक िोरटसी को पयाडप्त
अिसर ददया िा चुका ह,ै तो ऐसे में पदाजभजहत प्राजधकारी ररकॉडड म ें उपलब्ध सामग्री के आधार पर कायडिाजहयााँ
पूरी कर सकेगा, हालााँदक ऐसा करिे से पहल े िह ऐसा करिे के कारणों को दिड करेगा ।"
(II) वववियम 26 जिम्नजलजखत से प्रजतस्ट्र्ाजपत हो िाएगा, अर्ाडत ् :-
"कारडिाई की जसफाररि करिा
26. (1) ररकॉडड म ें उपलब्ध सामग्री और ििाब, यदद कोई हो, पर जिचार करिे के बाद, पदाजभजहत प्राजधकारी
एक ररपोटड के माध्यम से जिम्नजलजखत की जसफाररि कर सकेगा,-
(i) कोई प्रजतकूल कारडिाई दकए जबिा कायडिाजहयााँ पूरी करि े की;
(ii) रजिस्ट्रीकरण प्रमाणपत्र रद्द करिे की;[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3
(iii) एक जिजित अिजध तक रजिस्ट्रीकरण प्रमाणपत्र को जिलंजबत करिे की;
(iv) िोरटसी को यर्ा जिधाडररत अिजध तक कोई िया काय ड आदद हार् म ें लेि े या करार आदद करि े या िई
स्ट्कीम िुरू करि े से प्रजतजषद्ध करिे की;
(v) िोरटसी के दकसी अजधकारी को दकसी रजिस्ट्रीकृत मध्यिती (इंटरमीजडयरी) या प्रजतभजू त बािार
(जसक्यूररटीज़ माकेट) से िडु े दकसी दसू रे व्यजि के यहााँ यर्ा जिधाडररत अिजध तक कायड आदद करि े या
उससे िुडिे स ेजििर्िडत करिे की;
(vi) िोरटसी की दकसी िाखा या उसके दकसी कायाडलय को यर्ा जिधाडररत अिजध तक कायड आदद करि े स े
जििर्िडत करिे की;
(vii) िोरटसी को जिजियामक पररनिंदा (रेग्यलू ेटरी सेन्िर) िारी करिे की:
परंत ु यह दक इि जिजियमों के तहत, एक ही रजिस्ट्रीकरण प्रमाणपत्र के संबंध में पााँच से अजधक
जिजियामक पररनिंदा (रेग्यूलेटरी सेन्िर) िारी करि े की जसफाररि िहीं की िा सकेगी, उसके बाद इस उप-
जिजियम के खंड (ii) से खंड (vi) के तहत उजल्लजखत कारडिाई पर जिचार दकया िा सकेगा ।
(2) पदाजभजहत प्राजधकारी िोरटस का ििाब प्राप्त होिे की तारीख या व्यजिगत सुििाई की तारीख (िो भी
बाद की हो) से एक सौ बीस ददिों के भीतर ररपोटड प्रस्ट्ततु करि े का प्रयास करेगा ।"
(III) वववियम 27 जिम्नजलजखत से प्रजतस्ट्र्ाजपत हो िाएगा, अर्ाडत ् :-
"आदिे
27. (1) जिस ररपोट ड में पदाजभजहत प्राजधकारी की जसफाररि (कारडिाइयों के संबंध म)ें का उल्लेख हो िह ररपोट ड
प्राप्त होि े के बाद, पदाजभजहत सदस्ट्य पदाजभजहत प्राजधकारी द्वारा प्रस्ट्तुत की गई ररपोटड की प्रजत जभििाएगा और
िोरटसी से यह अपेक्षा करेगा दक िह जलजखत रूप म ें अपिा ििाब आदद दे दक पदाजभजहत प्राजधकारी द्वारा जिि
कारडिाइयों की जसफाररि की गई ह ै िे कारडिाइयााँ या इि जिजियमों के अिुसार कोई अन्य कारडिाई (जिस पर
जिचार दकया िा रहा ह)ै क्यों ि की िाए ।
(2) िोरटसी, सूचिा (िोरटस) में यर्ा जिधाडररत अिजध (िो उसकी तामील होिे की तारीख से इक्कीस ददिों स े
अजधक की ि हो) के भीतर, जलजखत ििाब आदद (इस प्रकार प्रस्ट्तुत दकए िािे िाले जलजखत ििाब आदद के
समर्डि म ेंयदद कोई दस्ट्तािेिी सूबत हो, तो उसके सार्) प्रस्ट्ततु करेगा:
परंतु यह दक िोरटसी के जििेदि पर, पदाजभजहत सदस्ट्य, कारणों को जलजखत रूप में दिड करिे के बाद,
सूचिा (िोरटस) का ििाब प्रस्ट्ततु करिे के जलए जिधाडररत की गई समयािजध को बढिा सकेगा ।
(3) िोरटसी के ििाब आदद पर जिचार करि े के बाद, पदाजभजहत सदस्ट्य यदद ठीक समझे, तो कारणों को जलजखत
रूप में दिड करिे के बाद, मामले को पदाजभजहत प्राजधकारी के यहााँ दफर से िााँच करिे या आगे और िााँच करि े
तर्ा ररपोटड दफर स ेप्रस्ट्ततु करिे के जलए जभििा सकेगा ।
(4) जिस मामले म ें पदाजभजहत प्राजधकारी िे रजिस्ट्रीकरण प्रमाणपत्र को रद्द दकए िािे की जसफाररि की हो या
दफर पदाजभजहत सदस्ट्य की पहली िज़र में यह राय हो दक इस मामले में रजिस्ट्रीकरण प्रमाणपत्र रद्द करिा ही
उजचत रहगे ा, उस मामले म ेंपदाजभजहत सदस्ट्य व्यजिगत सुििाई का अिसर प्रदाि कर सकेगा ।
स्ट्पष्टीकरण: - यदद ि तो पदाजभजहत प्राजधकारी ि े रजिस्ट्रीकरण प्रमाणपत्र को रद्द दकए िािे की जसफाररि की
हो और ि ही पदाजभजहत सदस्ट्य की पहली िज़र म ेंयह राय हो दक इस मामले म ें रजिस्ट्रीकरण प्रमाणपत्र रद्द
करिा ही उजचत रहगे ा, तो ऐसे में पदाजभजहत सदस्ट्य के जलए िोरटसी को व्यजिगत सुििाई का कोई अिसर
प्रदाि करिा िरूरी िहीं होगा ।
(5) मामल े के तथ्यों और पररजस्ट्र्जतयों, ररकॉड ड म ें उपलब्ध सामग्री और जलजखत रूप म ें प्रस्ट्तुत दकए गए ििाब
आदद, यदद कोई हो, पर जिचार करिे के बाद, पदाजभजहत सदस्ट्य उप-जिजियम (2) के तहत ििाब आदद प्राप्त होिे4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
की तारीख या व्यजिगत सुििाई की तारीख (िो भी बाद की हो) से एक सौ बीस ददिों के भीतर उपयिु आदिे
पाररत करिे का प्रयास करेगा ।"
(IV) वववियम 28 का लोप हो िाएगा ।
अिय त्यागी, अध्यक्ष
[जिज्ञापि-III/4/असा./474/2020-21]
पाद रटप्पण :
1. भारतीय प्रजतभूजत और जिजिमय बोडड (मध्यवर्ती) जिजियम, 2008, अविसूचिा स.ं एलएडी-
एिआरओ/िीएि/2008/11/126538 द्वारा 26 मई, 2008 को भारत के रािपत्र, भाग III, खण्ड 4 म ें प्रकाजित
हुए र् े।
2. भारतीय प्रजतभूजत और जिजिमय बोडड (मध्यवर्ती) जिजियम, 2008 तत्पिात ्:-
क. 11 अगस्र्त, 2008 को भारतीय प्रजतभूजत और जिजिमय बोड ड (स्टॉक दलाल और उप-दलाल) (संशोिि)
जिजियम, 2008, अविसूचिा स.ं एलएडी-एिआरओ/िीएि/2008/20/134766, द्वारा
ख. 14 जुलाई, 2009 को भारतीय प्रजतभूजत और जिजिमय बोड ड (मध्यवर्ती) (संशोिि) जिजियम, 2009,
अविसूचिा सं. एल.ए.डी.-एि.आर.ओ./िी.एि./2009-10/12/169546, द्वारा
ग. 7 जिवरी, 2014 को भारतीय प्रजतभूजत और जिजिमय बोडड [ववदेशी पोटटफोवलयो वववििािकर्ता ट
(विवेशक)] जिजियम, 2014, अविसूचिा सं. एल.ए.डी.एि.आर.ओ./िी.एि./2013-14/36/12, द्वारा
घ. 25 मई, 2016 को भारतीय प्रजतभूजत और जिजिमय बोडड (मध्यवर्ती) (संशोिि) जिजियम, 2016,
अविसूचिा सं. सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2016-17/006, द्वारा
ङ. 21 ििम्बर, 2017 को भारतीय प्रजतभूजत और जिजिमय बोडड (मध्यवर्ती) (संशोिि) जिजियम, 2017,
अविसूचिा सं. सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2017-18/021, द्वारा
च. 17 अप्रलै , 2020 को भारतीय प्रजतभूजत और जिजिमय बोडड (रेग्यूलेटरी सैंडबॉक्स) (संिोधि) जिजियम,
2020, सं. सेबी/एल.ए.डी.-एिआरओ/िीएि/2020/10, द्वारा संिोजधत हुए र् े।
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 21st January, 2021
SECURITIES AND EXCHANGE BOARD OF INDIA (INTERMEDIARIES) (AMENDMENT)
REGULATIONS, 2021
No. SEBI/LAD-NRO/GN/2021/07.—In exercise of the powers conferred by section 30 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992) the Board hereby makes the following
regulations to further amend the Securities and Exchange Board of India (Intermediaries) Regulations,
2008, namely: –
1. These regulations may be called the Securities and Exchange Board of India (Intermediaries)
(Amendment) Regulations, 2021.[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 5
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Intermediaries) Regulations, 2008, -
(I) The regulation 25, shall be substituted by the following, namely: –
“Holding of enquiry
25. (1) The designated authority shall issue a notice to a person against whom an enquiry
has been initiated, to show cause as to why the action, as contemplated against such person
should not be recommended.
(2) The noticee shall be called upon to submit, within a period to be specified in the notice,
not exceeding twenty-one days from the date of service thereof, a written reply to the
notice, along with documentary evidence, if any, in support of such written reply:
Provided that the designated authority may extend the time specified in the notice
for sufficient grounds shown by the noticee and after recording reasons in writing.
(3) Every notice issued under sub-regulation (1) shall specify the contravention alleged to
have been committed by the noticee by indicating the provisions of the securities laws or
the direction or the order of the Board alleged to have been contravened.
(4) There shall be annexed to the notice issued under sub- regulation (1), copies of
documents relied upon by the Board along with the extracts of relevant portions of the
reports containing the findings arrived at in an inquiry, investigation or inspection, if any.
(5) If the noticee demands inspection of such documents within the period specified in
sub-regulation (2) and the designated authority is of the opinion that the same may be
granted, then the designated authority may issue or cause to issue a notice fixing a date for
inspection of documents:
Provided that the date for inspection of documents shall be within thirty days from the date
of receipt of such request.
(6) The designated authority shall grant an opportunity of personal hearing and issue or
cause to issue a notice scheduling a date for hearing the notice:
Provided that no opportunity of personal hearing may be granted in the cases
where the noticee is alleged to have failed to pay the registration fee or any other
applicable fees to the Board as per the provisions of the relevant regulations or the noticee
has been declared a wilful defaulter or a fugitive economic offender.
(7) If the noticee does not reply to the notice issued under sub-regulation (1) or fails to
appear on the scheduled date of hearing and the designated authority is satisfied that
sufficient opportunity has been given to the noticee, the designated authority may conclude
the proceedings after recording the reasons for doing so, on the basis of the material
available on record.”
(II) The regulation 26, shall be substituted by the following, namely:-
“Recommendation of action
26. (1) After considering the material available on record and the reply, if any, the
designated authority may by way of a report, recommend the following measures,–
(i) disposing of the proceedings without any adverse action;
(ii) cancellation of the certificate of registration;
(iii) suspension of the certificate of registration for a specified period;
(iv) prohibition of the noticee from taking up any new assignment or contract or launching
a new scheme for such the period as may be specified;
(v) debarment of an officer of the noticee from being employed or associated with any
registered intermediary or other person associated with the securities market for such
period as may be specified;6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
(vi) debarment of a branch or an office of the noticee from carrying out activities for such
period as may be specified;
(vii) issuance of a regulatory censure to the noticee:
Provided that in respect of the same certificate of registration, not more than five
regulatory censures under these regulations may be recommended to be issued, thereafter,
the action as detailed in clause (ii) to (vi) of this sub-regulation may be considered.
(2) The designated authority shall endeavour to submit the report within one hundred and
twenty days from the date of receipt of reply to the notice or date of personal hearing,
whichever is later.”
(III) The regulation 27, shall be substituted by the following, namely,-
“Order
27. (1) On receipt of the report containing the measures recommended by the designated
authority, the designated member shall cause to forward a copy of the report submitted by
the designated authority and call upon the noticee to make its submission, in writing, as to
why the measures recommended by the designated authority or any other action as
contemplated in these regulations, should not be taken.
(2) The noticee shall submit, within a period as specified in the notice, but not exceeding
twenty-one days from the date of service thereof, a written submission, along with
documentary evidence, if any, in support of the written submission:
Provided that upon the request of the noticee, the designated member, after recording
reasons, in writing may cause to extend the time specified for submitting reply to the
notice.
(3) After considering the submission of the noticee, the designated member may if deemed
fit, for reasons to be recorded by it in writing, remit the matter to the designated authority
to enquire afresh or to further enquire and resubmit the report.
(4) The designated member may grant an opportunity of personal hearing where the
designated authority has recommended cancelation of certificate of registration or the
designated member is of the prima facie view that it is a fit case for cancellation of
certificate of registration.
Explanation: – It shall not be necessary for the designated member to give the noticee any
opportunity of personal hearing if neither the designated authority has recommended
cancelation of certificate of registration nor the designated member is of the prima facie
view that it is a fit case for cancellation of certificate of registration.
(5) After considering the facts and circumstances of the case, material on record and the
written submission, if any, the designated member shall endeavor to pass an appropriate
order within one hundred and twenty days from the date of receipt of submissions under
sub-regulation (2) or the date of personal hearing, whichever is later.”
(IV) The regulation 28, shall be omitted.
AJAY TYAGI, Chairman
[ADVT.-III/4/Exty./474/2020-21]
Footnote:
1. The Securities and Exchange Board of India (Intermediaries) Regulations, 2008 was
published in the Gazette of India, Part III Section 4 on May 26, 2008 vide
notification No. LAD-NRO/GN/2008/11/126538.
2. The Securities and Exchange Board of India (Intermediaries) Regulations, 2008 was
subsequently amended on:-[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 7
a. August 11, 2008 by the Securities and Exchange Board of India (Stock Brokers and
Sub-Brokers) (Amendment) Regulations, 2008, vide notification No. LAD-
NRO/GN/2008/20/134766.
b. July 14, 2009 by the Securities and Exchange Board of India (Intermediaries)
(Amendment) Regulations, 2009, vide notification No. LAD-NRO/GN/2009-10/12/169546.
c. January 7, 2014 by the Securities and Exchange Board of India (Foreign Portfolio
Investors) Regulations, 2014, vide notification No. LAD-NRO/GN/2013-14/36/12.
d. May 25, 2016 by the Securities and Exchange Board of India (Intermediaries)
(Amendment) Regulations, 2016, vide notification No. SEBI/LAD-NRO/GN/2016-17/006.
e. November 21, 2017, by the Securities and Exchange Board of India (Intermediaries)
(Amendment) Regulations, 2017, vide notification no. SEBI/LAD-NRO/GN/2017-18/021.
f. April 17, 2020, by the Securities and Exchange Board of India (Regulatory Sandbox)
(Amendment) Regulations, vide notification no. SEBI/LAD-NRO/GN/2020/10.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.