Executive Summary:
This document contains the Securities and Exchange Board of India (SEBI) Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market Second Amendment Regulations, 2020. It clarifies that manipulation of a listed company's assets, earnings, books, or financial statements to influence securities prices is considered a fraudulent and unfair trade practice. The regulations take effect upon publication in the Official Gazette, October 19, 2020.
Key Points / Main Content:
* **Regulations Overview:**
* These regulations are called the Securities and Exchange Board of India Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Second Amendment Regulations, 2020.
* The regulations are issued under Section 30 of the Securities and Exchange Board of India Act, 1992.
* **Effective Date:**
* The regulations come into force on the date of their publication in the Official Gazette (October 19, 2020).
* **Amendment to Regulation 4:**
* An explanation is inserted into sub-regulation 1 of regulation 4.
* **Explanation Clarification:**
* Any act of diversion, misutilisation, or siphoning off of assets or earnings of a listed company is clarified as a manipulative, fraudulent and an unfair trade practice.
* Concealment of such acts is also clarified as a manipulative, fraudulent and an unfair trade practice.
* Any device, scheme, or artifice to manipulate the books of accounts or financial statements of such a company is clarified as a manipulative, fraudulent and an unfair trade practice.
* If the actions above directly or indirectly manipulate the price of securities of that company, this is considered a fraudulent and unfair trade practice.
Impact Analysis:
* **Listed Companies:**
* *Impact:* Increased scrutiny of financial practices and potential liability for fraudulent activities related to asset diversion or earnings manipulation.
* *Action Required:* Ensure strict compliance with accounting standards and ethical financial practices, and review internal controls to prevent fraudulent activities.
* **Investors:**
* *Impact:* Greater protection against fraudulent activities that could manipulate securities prices, potentially leading to more informed investment decisions.
* *Action Required:* Stay informed about company financials and report any suspected fraudulent activities.
* **Securities and Exchange Board of India (SEBI):**
* *Impact:* Enhanced authority to take action against companies and individuals engaging in fraudulent and unfair trade practices.
* *Action Required:* Enforce the amended regulations and investigate potential violations.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): A regulatory body for the securities market in India.
Securities and Exchange Board of India Act, 1992: The act of Indian Parliament under which SEBI was established and granted statutory powers.
Securities and Exchange Board of India Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Regulations, 2003: Regulations framed by SEBI to prohibit fraudulent and unfair trade practices in the securities market.
Securities and Exchange Board of India Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market Second Amendment Regulations, 2020: Amendment regulations made by SEBI in 2020 to the 2003 regulations.
Official Gazette: A public journal that publishes official notifications, regulations, and other legal documents.
Mumbai, Maharashtra: The city in Maharashtra where the SEBI notification was issued.
Ajay Tyagi: The Chairman of SEBI during the time of notification.
New Delhi: The city in Delhi where the Gazette of India is published.
रिज(cid:7021)(cid:7069)ी स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
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सी.जी.-एम.एच.-अ.-19102020-222561
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CG-MH-E-19102020-222561
असाधारण
EXTRAORDINARY
भाग III—ख(cid:7003) ड 4
PART III—Section 4
(cid:7079)ािधकार स े(cid:7079)कािशत
PUBLISHED BY AUTHORITY
स.ं 443] नई (cid:7408)द(cid:7016)ली, सोमवार, अ(cid:6989)त बू र 19, 2020/आि(cid:7019)व न 27, 1942
No. 443] NEW DELHI, MONDAY, OCTOBER 19, 2020/ASVINA 27, 1942
भारतीय (cid:7079)ितभिू त और िविनमय बोड(cid:6981)
अिधसचू ना
म(cid:7013)ु बई, 19 अ(cid:6989) तूबर, 2020
भारतीय (cid:7079)ितभिू त और िविनमय बोड(cid:6981)
((cid:7079)ितभिू त बाजार स ेसंबिं धत कपटपणू (cid:6981)और अऋज ु (cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का (cid:7079)ितषधे )
(दसू रा सशं ोधन) िविनयम, 2020
स.ं सबे ी/एलएडी-एनआरओ/जीएन/2020/36.—बोड(cid:6981), भारतीय (cid:7079)ितभूित और िविनमय बोड (cid:6981) अिधिनयम, 1992
(1992 का 15) क(cid:7409) धारा 30 के तहत (cid:7079)द(cid:7275) शि(cid:7334)य(cid:7298) का (cid:7079)योग करत े (cid:7263)ए, एत(cid:7375)ारा भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981)
((cid:7079)ितभूित बाजार से संबंिधत कपटपरू ्ण और अऋज ु (cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का (cid:7079)ितषेध) िविनयम, 2003 का संशोधन करने
के िलए िन(cid:7388)िलिखत िविनयम बनाता ह,ै अथा(cid:6981)त:्-
1. इन िविनयम(cid:7298) को भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981) ((cid:7079)ितभूित बाजार से संबिं धत कपटपूण (cid:6981) और अऋज ु
(cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का (cid:7079)ितषेध) (दसू रा संशोधन) िविनयम, 2020 कहा जा सकेगा ।
2. व े राजप(cid:7074) म(cid:7286) उनके (cid:7079)काशन क(cid:7409) तारीख को (cid:7079)व(cid:7275)ृ (लाग)ू ह(cid:7298)ग े।
3. भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981) ((cid:7079)ितभूित बाजार स े संबंिधत कपटपूण (cid:6981) और अऋज ु (cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का
(cid:7079)ितषेध) िविनयम, 2003 म(cid:7286),-
5014 GI/2020 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC. 4]
I. िविनयम 4 म(cid:7286), उप-िविनयम (1) म(cid:7286), िन(cid:7388)िलिखत (cid:7021)प(cid:7397)ीकरण अतं ः(cid:7021)थािपत (cid:7408)कया जाएगा, अथा(cid:6981)त्:-
“(cid:7021)प(cid:7397)ीकरण.- शंकाएँ दरू करने के िलए, यह (cid:7021)प(cid:7397) (cid:7408)कया जाता ह ै (cid:7408)क (cid:7408)कसी कंपनी [िजसक(cid:7409)
(cid:7079)ितभूितयाँ (िस(cid:6989)य(cid:7407)ू रटीज़) सूचीब(cid:7373) (िलि(cid:7021)टड) ह(cid:7298)] क(cid:7409) आि(cid:7021)तय(cid:7298) (असे(cid:6999)स) या उसक(cid:7409) आमदनी को कह(cid:7277)
और लगान े (का अ(cid:7008)यतर् उपयोग करने), का गलत इ(cid:7021)तेमाल (द(cid:7271)ु पयोग) करन े या को बेईमानी से
िनकालने के िलए (cid:7408)कए गए ऐसे (cid:7408)कसी भी काय(cid:6981) के बारे म(cid:7286) अथवा ऐसे (cid:7408)कसी काय(cid:6981) को िछपाने के बारे म (cid:7286)
अथवा ऐसी (cid:7408)कसी कंपनी क(cid:7409) लेखा बिहय(cid:7298) या िव(cid:7275)ीय िववरण म(cid:7286) हरे ाफेरी करने के िलए रची गई ऐसी
(cid:7408)कसी सािजश (ऐसी (cid:7408)कसी युि(cid:7334)), योजना ((cid:7021)क(cid:7409)म) आ(cid:7408)द [िजससे (cid:7408)क उस कंपनी क(cid:7409) (cid:7079)ितभूितय(cid:7298)
(िस(cid:6989)य(cid:7407)ू रटीज़) क(cid:7409) क(cid:7409)मत म(cid:7286) (cid:7079)(cid:7004)य(cid:6979) (cid:7272)प से या अ(cid:7079)(cid:7004)य(cid:6979) (cid:7272)प से हरे ाफेरी हो] के बारे म(cid:7286) यह समझा जाएगा
और हमेशा यही समझा जाएगा (cid:7408)क (cid:7079)ितभूित बाजार (िस(cid:6989)य(cid:7407)ू रटीज़ माक(cid:7287)ट) म(cid:7286) हरे ाफेरीय(cid:7334)ु , कपटपणू (cid:6981)
और अनुिचत (अऋजु) (cid:7390)ापा(cid:7407)रक (cid:7390)वहार ((cid:7069)ेड (cid:7079)ैि(cid:6989)टस) (cid:7408)कया गया ह ै।”
अजय (cid:7004)यागी, अ(cid:7007)य(cid:6979)
[िव(cid:6980)ापन-III/4/असा./303/2020-21]
पाद (cid:7407)ट(cid:7009)पण:
1. भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981) ((cid:7079)ितभूित बाजार स े संबंिधत कपटपूण (cid:6981) और अऋज ु (cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का
(cid:7079)ितषेध) िविनयम, 2003, स.ं का.आ. 816(अ), 17 जुलाई, 2003 को भारत के राजप(cid:7074) म(cid:7286) (cid:7079)कािशत (cid:7263)ए थे ।
2. भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981) ((cid:7079)ितभूित बाजार स े संबंिधत कपटपूण (cid:6981) और अऋज ु (cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का
(cid:7079)ितषेध) िविनयम, 2003 -
i. 23 अ(cid:7079)ैल, 2007 को भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981) (बोड(cid:6981) (cid:7367)ारा जारी समन(cid:7298) और सूचना(cid:7312) क(cid:7409)
तामील क(cid:7409) रीित) (संशोधन) िविनयम, 2007, फा. स.ं भा(cid:7079)िवबो/िवकािव/नी(cid:7079)/2232/2007, (cid:7367)ारा
ii. 11 (cid:7408)दस(cid:7013)बर, 2012 को भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981) ((cid:7079)ितभूित बाजार से संबंिधत कपटपूण (cid:6981) और
अऋज ु (cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का (cid:7079)ितषेध) (संशोधन) िविनयम, 2012, स.ं एल.ए.डी.-
एन.आर.ओ./जी.एन./2012-13/25/5455, (cid:7367)ारा
iii. 6 िसत(cid:7013)बर, 2013 को भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981) ((cid:7079)ितभूित बाजार स े संबिं धत कपटपूण (cid:6981) और
अऋज ु (cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का (cid:7079)ितषेध) (संशोधन) िविनयम, 2013, स.ं एलएडी-
एनआरओ/जीएन/2013-14/22/22670, (cid:7367)ारा
iv. 31 (cid:7408)दस(cid:7013)बर, 2018 को भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981) ((cid:7079)ितभूित बाजार से संबंिधत कपटपूण (cid:6981) और
अऋज ु (cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का (cid:7079)ितषेध) (संशोधन) िविनयम, 2018, स.ं सेबी/एल.ए.डी.-
एन.आर.ओ./जी.एन./2018/56, (cid:7367)ारा
v. 13 माच(cid:6981), 2020 को भारतीय (cid:7079)ितभूित और िविनमय बोड(cid:6981) ((cid:7079)ितभूित बाजार स े संबंिधत कपटपूण (cid:6981) और
अऋज ु (cid:7390)ापा(cid:7407)रक (cid:7390)वहार(cid:7298) का (cid:7079)ितषेध) (संशोधन) िविनयम, 2020, सं. सेबी/एलएडी-
एनआरओ/जीएन/2020/08, (cid:7367)ारा
संशोिधत (cid:7263)ए थ े।[भाग III—ख(cid:7003) ड 4] भारत का राजप(cid:7074) : असाधारण 3
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 19th October , 2020
SECURITIES AND EXCHANGE BOARD OF INDIA (PROHIBITION OF FRAUDULENT AND UNFAIR
TRADE PRACTICES RELATING TO SECURITIES MARKET) (SECOND AMENDMENT)
REGULATIONS, 2020
No. SEBI/LAD-NRO/GN/2020/36.—In exercise of the powers conferred under Section 30 of the Securities
and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to amend the
Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities
Market) Regulations, 2003, namely: –
1. These regulations may be called the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair
Trade Practices relating to Securities Market) (Second Amendment) Regulations, 2020.
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 (Prohibition of Fraudulent and Unfair Trade Practices relating
to Securities Market) Regulations, 2003, –
I. In regulation 4, in sub-regulation (1), the following Explanation shall be inserted, namely: –
“Explanation.– For the removal of doubts, it is clarified that any act of diversion,
misutilisation or siphoning off of assets or earnings of a company whose securities are listed or any
concealment of such act or any device, scheme or artifice to manipulate the books of accounts or
financial statement of such a company that would directly or indirectly manipulate the price of
securities of that company shall be and shall always be deemed to have been considered as
manipulative, fraudulent and an unfair trade practice in the securities market.”
AJAY TYAGI, Chairman
[ADVT-III/4/Exty./303/2020-21]
Footnotes:
1. The Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to
Securities Market) Regulations, 2003 was published in the Gazette of India on July 17, 2003 vide No. S. O.
816(E).
2. The Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to
Securities Market) Regulations, 2003 was amended -
i. on April 23, 2007 by the Securities and Exchange Board of India (Manner of Service of Summons
and Notices Issued by the Board) (Amendment) Regulations, 2007 vide No.
SEBI/LAD/DOP/2232/2007;
ii. on December 11, 2012 by the Securities and Exchange Board of India (Prohibition of Fraudulent and
Unfair Trade Practices relating to Securities Market) (Amendment) Regulations, 2012 vide No.
LAD-NRO/GN/2012-13/25/5455;
iii. on September 06, 2013 by the Securities and Exchange Board of India (Prohibition of Fraudulent
and Unfair Trade Practices relating to Securities Market) (Amendment) Regulations, 2013 vide No.
LAD-NRO/GN/2013-14/22/22670;
iv. on December 31, 2018 by the Securities and Exchange Board of India (Prohibition of Fraudulent
and Unfair Trade Practices relating to Securities Market) (Amendment) Regulations, 2018 vide No.
SEBI/LAD-NRO/GN/2018 /56.
v. on March 13, 2020 by the Securities and Exchange Board of India (Prohibition of Fraudulent and
Unfair Trade Practices relating to Securities Market) (Amendment) Regulations, 2020 vide No.
SEBI/LAD-NRO/GN/2020/08.
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