SEBI AS A

REGULATOR

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CONTENT PAGE NO.
(1) INTRODUCTION 3
(2) FUNCTIONS OF SEBI 5
(3) SEBI DEPOSITORIES AND PARTICIPANTS REGULATIONS 6

3a. Registration of depository

3b. Grant of certificate of registration

3c. Registration of participant

3d. Rights and obligations of depositories, participants

3e. Inspection

3f. Action in case of default

(4) SEBI VENTURE CAPITAL FUNDS REGULATIONS 8

4a. Registration of venture capital funds

4b. Investment conditions and restrictions

4c. General obligations and responsibilities

4d. Inspection and investigation

4e. Procedure for action in case of default

(5) SEBI FOREIGN VENTURE CAPITAL INVESTORS REGULATIONS 10

5a. Registration of foreign venture capital investors

5b. Investment conditions and restrictions

5c. General obligations and responsibilities

5d. Inspection and investigation
5e. Procedure for action in case of default

(6)SEBI TAKEOVER CODE 12

6a. Disclosure of shareholding and control in a listed company

6b. Substantial acquisition of shares/voting rights/control over limited company
6c. Bail out takeovers
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 6d. Investigation and action by the sebi

(7) MUTUAL FUND 15

7a. Registration of mutual fund

7b. Schemes of mutual fund

7c. General obligations

7d. Inspection and audit

(1) SEBI - Introduction

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In 1988 the Securities and Exchange Board of India (SEBI) was established by the Government
of India through an executive resolution, and was subsequently upgraded as a fully autonomous
body (a statutory Board) in the year 1992 with the passing of the Securities and Exchange Board
of India Act (SEBI Act) on 30th January 1992. In place of Government Control, a statutory and
autonomous regulatory board with defined responsibilities, to cover both development &
regulation of the market, and independent powers has been set up.

The basic objectives of the Board were identified as:

• to protect the interests of investors in securities;
• to promote the development of Securities Market;
• to regulate the securities market and
• for matters connected therewith or incidental thereto.
SEBI has introduced the comprehensive regulatory measures, prescribed registration norms, the
eligibility criteria, the code of obligations and the code of conduct for different intermediaries
like, bankers to issue, merchant bankers, brokers and sub-brokers, registrars, portfolio managers,
credit rating agencies, underwriters and others. It has framed bye-laws, risk identification and
risk management systems for Clearing houses of stock exchanges, surveillance system etc. which
has made dealing in securities both safe and transparent to the end investor.

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 (2) FUNCTIONS OF SEBI

1. Regulation Of Business In The Stock Exchanges

A review of the market operations, organizational structure and administrative control of the
exchange .All stock exchanges are required to be Body Corporate and these exchanges provides
a fair, equitable and growing market to investors. The exchange’s organisation, systems and
practices are in accordance with the Securities Contracts (Regulation) Act (SC(R) Act), 1956.

2. Registration And Regulation Of The Working Of Intermediaries

It regulates the working of the depositories [participants], custodians of securities, foreign

institutional investors, credit rating agencies and such other intermediaries and regulates primary
markets (Merchant Bankers Underwriters, Portfolio Managers) as well as secondary
markets(Stock brokers and Sub- Brokers).

3. Registration And Regulation Of Mutual Funds, Venture Capital Funds

It promotes and protects the interest of mutual funds and their unit-holders, increasing public
awareness of mutual funds, and serving the investors' interest by defining and maintaining high
ethical and professional standards in the mutual funds industry'. Every mutual fund must be
registered with SEBI and registration is granted only where SEBI is satisfied with the
background of the fund. SEBI has the authority to inspect the books of accounts, records and
documents of a mutual fund, where it deems it necessary.

4. Promoting & Regulating Self Regulatory Organizations

In order for the SRO to effectively execute its responsibilities, it would be required to be
structured, organized, managed and controlled such that it retains its independence, while
continuing to perform a genuine market development role.

5. Prohibiting Fraudulent And Unfair Trade Practices In The Securities Market

SEBI is vested with powers to take action against these practices relating to securities market
manipulation and misleading statements to induce sale/purchase of securities.

6. Investor Education And The Training Of Intermediaries

SEBI distributed the booklet titled “A Quick Reference Guide for Investors” to the investors.
SEBI also issued a series of advertisement /public notices in national as well as regional
newspapers to educate and caution the investors about the risks associated with the investments
in collective investment schemes SEBI has also issued messages in the interest of investors on
National Channel and Regional Stations on Doordarshan.

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7. Inspection And Inquiries
SEBI inspect the records and inquire timely where ever it is required.

(3) SEBI DEPOSITORIES AND PARTICIPANTS REGULATIONS

3a. REGISTRATION OF DEPOSITORY

An application for the grant of a certificate of registration as a depository shall be made to the
Board by the sponsor shall be accompanied by the fee specified. The sponsor belongs to one of
the following categories, namely:-(i) a public financial institution (ii) a bank (iii) a foreign bank
operating in India with the approval of RBI (iv) a recognised stock exchange (vi) a body
corporate constituted or recognised under any law for the time being in force in a foreign country
for providing custodial, clearing or settlement services in the securities market and approved by
the Central Government (vii) an institution engaged in providing financial services established
outside India and approved by the Central Government

3b. GRANT OF CERTIFICATE OF REGISTRATION

Within a year of registration, depository has to apply for a certificate of commencement of

business. SEBI consider all matters related to the efficient & orderly functioning of the
depository. Before granting the certificate, SEBI would make a physical verification of the
infrastructure facilities and systems that depository has.

3c. REGISTRATION OF PARTICIPANT

An application for the grant of a certificate of registration as a participant shall be made to the
SEBI through depository. The depository shall forward to the Board the application with its
recommendations and certifying that the participant complies with the eligibility criteria
including adequate infrastructure as per law. The depository should have certificate. The
applicant may be (i)public financial institution (ii)bank (iii) a foreign bank operating in India
with the approval (iv) a state financial corporation

3d. RIGHTS AND OBLIGATIONS OF DEPOSITORIES, PARTICIPANTS

Depository: Every depository shall state the specific securities which are eligible for being held
in dematerialised form in the depository namely (a) shares, scrips, stocks, bonds, debentures,
debenture stock or other marketable securities (b) units of mutual funds, venture capital funds,
commercial paper, government securities etc. (c) any other security as may be specified by the
Board.

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 The issuer shall enter into an agreement with a depository to enable the investor to dematerialise
the securities except where depository itself is an issuer of securities & where the State or the
Central Government is the issuer of Government securities.

Every depository shall have systems and procedures to co-ordinate with the issuer, its agent
and the participants, to reconcile the records of ownership of securities with the issuer or its
agent and with participants, on a daily basis.

Participants: Participant should enter into an agreement with a beneficial owner before
acting as participant on his behalf as per laws of depository. There should a separate account
for every owner and transfer of securities to or from account should be made on his
instruction. Participant should maintain records of transactions and all other matters related
to dematerialisation.

3e. INSPECTION

SEBI can undertake inspection of the books of accounts, records, documents and
infrastructure, systems and procedures, or to investigate the affairs of a depository, a
participant, a beneficial owner, an issuer or its agent (a) to ensure maintenance of books as
specified regulations (b) to look into the complaints received from them (c) to ascertain
whether the systems, procedures being followed are adequate. SEBI has to give notice ten
days before. It is duty of dipository to produce all documents required and provide all type of
assistance in investigation.

3f. ACTION IN CASE OF DEFAULT

The certificate of depository can be (i) suspended in case of failure to comply with SEBI
direction and can be (ii) cancelled in case of fraud or repetitive defaults. Applicable for
depository who:

• fails to furnish any information relating to its activity as a depository

• does not co-operate in any inspection or investigation or enquiry conducted by
the Board
• fails to pay the annual fee

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 (4) SEBI VENTURE CAPITAL FUNDS REGULATIONS

4a. REGISTRATION OF VENTURE CAPITAL FUNDS

Any company or trust proposing to carry on any activity as venture capital fund shall make an
application to the Board for grant of a certificate. Any company or trust fails to make an
application for grant of a certificate within the period specified shall cease to carry on any
activity as a venture capital fund. Board may in the interest of the investors issue directions with
regard to the transfer of records, documents or securities or disposal of investments relating to its
activities as a venture capital fund. The certificate granted shall be inter alia, subject to the
following conditions:—

(a) The venture capital fund shall abide by the provisions of act (b) the VCF shall not carry
on any other activity other than that of a VCF (c) VCF shall inform the Board in writing
if any information found to be false or misleading in any material particular or if there is
any change in the information already submitted
Any applicant whose application has been rejected shall not carry on any activity as VCF.

4b. INVESTMENT CONDITIONS AND RESTRICTIONS

Minimum investment in a VCF: VCF may raise monies from any investor whether Indian,
Foreign or NRI by way of issue of units. No VCF set up as a company or trust shall accept any
investment from any investor less than five lakh rupees. Provided that nothing contained in sub-
regulation (2) shall apply to investors who are employees or the principal officer or directors of
the VCF, or directors of the trustee company or trustees where VCF has been established as trust.

Restrictions: (a) VCF shall disclose the investment strategy at the time of application for
registration (b) venture capital fund shall not invest more than 25% corpus (c) shall not invest in
the associated companies.
No venture capital fund shall be entitled to get its units listed on any recognized stock exchange
till the expiry of three years from the date of the issuance of units by the VCF

4c. GENERAL OBLIGATIONS AND RESPONSIBILITIES

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The VCF shall— (a) issue a placement memorandum which shall contain details of the terms and
conditions (b) enter into contribution or subscription agreement with the investors which shall
specify the terms and conditions subject to which monies are proposed to be raised.

VCF shall file with the Board for information, the copy of the placement memorandum or the
copy of the contribution or subscription agreement entered with the investors along with a report
of money actually collected from the investor. Every venture capital fund shall maintain for a
period of eight years books of account, records and documents which shall give a true picture of
the state of affairs of the venture capital fund.

Winding-up: A scheme of a VCF set up as a trust shall be wound up (a) when the period of the
scheme is over (b) if it is the opinion of the trustees that the scheme shall be wound up in the
interests of investors in the unit(c) if seventy-five per cent of the investors in the scheme pass a
resolution at a meeting of unitholders that the scheme be wound up.

As a result no further investments shall be made on behalf of the scheme so wound up and the
assets of the scheme shall be liquidated, and the proceeds accruing to investors in the scheme
distributed to them after satisfying all liabilities.

4d. INSPECTION AND INVESTIGATION

SEBI may investigate to ensure that the books of account, records and documents are being
maintained by VCF as per regulations (b) to inspect or investigate into complaints received from
investors, clients or any other person. Before an inspection or investigation SEBI has to give
notice ten days before. It is duty of VCF officer to produce all documents required and provide
all type of assistance in investigation.

4e. PROCEDURE FOR ACTION IN CASE OF DEFAULT

The Board may suspend/cancel the certificate granted to a VCF as a result the certificate of the
venture capital fund shall cease to carry on any activity as a venture capital fund during the
period of suspension.

The Board may suspend the certificate where:

(a) Contravenes any of the provisions of the Act or regulations (b) fails to furnish any
information relating to its activity(c) furnishes to the Board information which is false or
misleading (d) does not submit periodic returns or reports (e) does not co-operate in any
enquiry, inspection or investigation (f) fails to resolve the complaints of investors or fails to
give a satisfactory reply to the Board in this behalf.

The Board may cancel the certificate where:

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(a) Guilty of fraud or has been convicted of an offence involving moral turpitude (b) guilty of
repeated defaults (c) contravenes any of the provisions of the Act or these regulations.

(5) SEBI FOREIGN VENTURE CAPITAL INVESTORS REGULATIONS, 2000

5a.REGISTRATION OF FOREIGN VENTURE CAPITAL INVESTORS

For the registration the applicant shall make an application to the Board with the application fee.
The applicant has to furnish further information as required by SEBI. If the Board is satisfied
that the applicant is eligible for the grant of certificate, it shall send intimation to the applicant.
An application which is not complete in all respects shall be rejected by the Board as a result
applicant cannot carry on any activity as a Foreign Venture Capital Investor.
5b. INVESTMENT CONDITIONS AND RESTRICTIONS

All investments to be made by foreign VCFI shall disclose to the Board its investment strategy.
It can invest its total funds in one venture capital fund. It shall make investments as enumerated
below:

(i) at least 66.67% of the investible funds shall be invested in unlisted equity shares or equity
linked instruments of Venture Capital Undertaking. (ii) not more than 33.33% of the investible
funds may be invested by way of: (a) subscription to initial public offer of a venture capital
undertaking whose shares are proposed to be listed (b)debt or debt instrument of a venture
capital undertaking in which VCFI has already made an investment by way of equity. (c) the
equity shares or equity linked instruments of financially weak company whose shares are listed.

5c. GENERAL OBLIGATIONS AND RESPONSIBILITIES

Maintenance of books and records: Every FVCI should maintain for a period of eight years,
books of accounts, records and documents which give true picture of the state of affairs of the
FVCI.
General Obligations and Responsibilities: FVCI/global custodian acting on behalf of the
foreign venture capital investor shall enter into an agreement with the domestic custodian to act
as a custodian of securities for Foreign Venture Capital Investor. FVCI shall ensure that
domestic custodian takes steps for,-

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(a) Monitoring of investment of FVCI in India (b) furnishing of periodic reports to the Board
Appointment of designated bank
FVCI shall appoint a branch of a bank approved by Reserve Bank of India as designated bank for
opening of foreign currency denominated accounts or special non-resident rupee account.

5d. INSPECTION AND INVESTIGATION

SEBI may investigate to ensure that the books of account, records and documents are being
maintained by VCF as per regulations (b) to inspect or investigate into complaints received from
investors, clients or any other person. Before an inspection or investigation SEBI has to give
notice ten days before. It is duty of VCF officer to produce all documents required and provide
all type of assistance in investigation.

5e. PROCEDURE FOR ACTION IN CASE OF DEFAULT

The Board may suspend/cancel the certificate granted to a VCF as a result the certificate of the
venture capital fund shall cease to carry on any activity as a venture capital fund during the
period of suspension.

The Board may suspend the certificate where:

(a) Contravenes any of the provisions of the Act or regulations (b) fails to furnish any
information relating to its activity(c) furnishes to the Board information which is false or
misleading (d) does not submit periodic returns or reports (e) does not co-operate in any enquiry,
inspection or investigation (f) fails to resolve the complaints of investors or fails to give a
satisfactory reply to the Board in this behalf.

The Board may cancel the certificate where:

(a) Guilty of fraud or has been convicted of an offence involving moral turpitude (b) guilty of
repeated defaults (c) contravenes any of the provisions of the Act or these regulations.

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 (6)SEBI TAKEOVER CODE
When an "acquirer" takes over the control of the "target company", it is termed as Takeover.
When an acquirer acquires "substantial quantity of shares or voting rights" of the Target
Company, it results into substantial acquisition of shares. A takeover bid is generally understood
to imply the acquisition of shares carrying voting rights in a company, in a direct or indirect
manner, with a view to gaining control over the management of the company. Such takeovers
could take place through a process of friendly negotiation or in a hostile manner. The main
elements of SEBI Code are – 1) Disclosure of Shareholding and Control in a Listed Company
2) Substantial Acquisition of Shares / Voting Rights / Control 3)Bail Out Takeovers
4) Investigation / Action by the SEBI

6a. DISCLOSURE OF SHAREHOLDING AND CONTROL IN A LISTED COMPANY – An

acquirer of shares/voting rights with a total of existing holdings in excess of 5% / 10% / 14% /
54% / 74% in a company is required to disclose at every stage, to the concerned company the
aggregate of its shareholding/voting rights. An acquirer who acquires shares/voting rights of a
company under the provisions relating to the consolidation of holdings should disclose
purchases/sales aggregating 2 per cent or more of the share capital of the target company to the
target company and the concerned stock exchanges. If there are two or more persons have
control over the target company cessation or change in nature of any one of them, it would not be
deemed as change in control of management.

Person acting in concert is a person who cooperates for substantial acquisition of shares/voting
rights to gain control over target company. Unless the contrary is established, the following are
deemed to be persons acting in concert with other persons in the same category – a) A company,
its holding/subsidiary company, company under the same management, either individually or
together with each other; b) A company with any of its directors/ any person entrusted with the
management of the funds of the company; c) Directors and their associates [i.e., any relative /
family trusts and Hindu Undivided Families (HUFs)]; d) Mutual funds with sponsors and/or
trustee and/or asset management company; e) FIIs with sub-accounts; f) Merchant bankers with

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their client(s) as acquirer; g) Portfolio managers with their client(s) as acquirer; h) Venture
capital funds with sponsors; i) Banks with financial advisors, stock brokers of the acquirer or
any holding / subsidiary / relative of the acquirer; j) Any investment company, in cases where
such companies are used as vehicles to make substantial acquisition of shares / voting rights in a
company, with any person who has an interest as director / fund manager trustee / shareholder,
having not less than 2% of the paid up capital of the company.

Continual Disclosure – All persons holding more than 15% shares/voting rights have to
disclose within 21 days form the end of each financial year, with respect to their holdings, as on
March 31, to the company concerned. All listed companies have to make yearly disclosures of
changes in respect of the holdings of such persons/promoters to the concerned stock exchange
for the purpose of declaration of dividend. Every listed company should maintain a register in
the specified format to record information received from i) Persons acquiring more than or equal
to 5% shares/voting rights, and ii) Promoters / any person having control over a company.

6b. SUBSTANTIAL ACQUISITION OF SHARES / VOTING RIGHTS / CONTROL OVER A

LIMITED COMPANY –

The SEBI Code is applicable to – a) Acquisition of 15% of shares/voting rights of any company
b) Consolidation of holdings c) Acquisition of control over a company.

Acquisition of 15% or more Shares / Voting Rights – An acquirer acquiring shares / voting
rights that, together with existing holdings by him / person working in concert with him entitle
him, to exercise 15% or more of the voting rights in a company, has to make a public
announcement to that effect.

Consolidation of holdings- An acquirer holding not less than 15% but not more than 55% of the
shares /voting rights in a company has to make a public announcement to acquire additional
shares/ voting rights to exercise more than 5% of the rights in any financial year ending on
march 31. An acquirer who has acquired 55% or more but less than 75% of shares/voting rights
in a company cannot acquire, additional shares without making a public announcement. In case
of disinvestment, an acquirer who has made a public announcement would not required to make
another announcement for further acquisition of shares/voting rights.

Acquisition of Control –No person can acquire control over the target company without making
a public announcement, irrespective of whether or not there has been any acquisition of shares /
voting rights. Acquisition includes direct / indirect acquisition of control of the target company
by virtue of acquisition of companies, whether listed / unlisted and whether in India or abroad.

General obligations of the Acquirer: The public announcement of offer to acquire the shares of
target Company should be made only when acquirer is able to implement the offer. The acquirer
must send a letter of offer to potential shareholders of the target company. A copy of draft letter
of offer must be sent to BOD of target Company and stock exchanges where company is listed.

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If acquirer is a company, the public announcement made to shareholders regarding offers must
state that directors accept the responsibility for the information contained in documents. On or
before the public announcement acquirer should create an escrow account.

General obligations of the BOD of target company: BOD of target company should not
(i) sell, transfer, encumber or otherwise dispose off the assets (ii) issue any authorized but
unissued securities carrying voting rights (iii) enter into any contract, during offer period. The
target company should provide list of eligible shareholders/convertible debenture holders to the
acquirer. The BOD of the target company may send unbiased comments to shareholders about
the offer.

6c. BAIL OUT TAKEOVERS

It refers to substantial acquisition of shares in a financial weak company. A financially weak

company means a company that has at the end of the previous financial year accumulated losses,
which have resulted in the erosion of more than 50% but less than 100% of its net worth at the
beginning of the previous financial year. The lead institution would be responsible for ensuring
compliance with the SEBI Takeover Code. It would appraise the financially weak company,
taking into account the financial viability and assess the requirement of funds for revival and
then draw up the rehabilitation package on the principle of protection of the interests of the
minority shareholders, good management, effective revival and transparency. The rehabilitation
scheme has also to specify the details of any change in management.

6d. INVESTIGATION AND ACTION BY THE SEBI – The SEBI may appoint one or more
persons as investigating officer to undertake investigation for any of the following purposes –
a. Complaints received from the investors, the intermediates or any other person.
b. To investigate suo-moto upon its own knowledge or information, in the interest of securities
market or investors interests, for any breach of the regulations.
c. To ascertain whether the provisions of the SEBI Act and the regulations are being complied
with or for any breach of these regulations.
Before an inspection or investigation SEBI has to give notice ten days before. It is duty of
director or officer to produce all documents required and provide all type of assistance in
investigation.
Penalties for Non-Compliance – Any person failing to make disclosures, as required, would be
liable to action in as per terms of the regulations and the SEBI Act.

a) Failure to carry out the obligations, by the acquirer or any person(s) acting in concert with
him would lead to forfeiture of the entire or a part of the sum deposited with the bank in the
escrow account and also action as per the terms of the regulations and the SEBI Act.

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b) In case the Board of Directors of the target company fail to carry out their obligations they
would be liable for penal action.

c) In case of failure in carrying out the requirements of the regulations by an intermediary, the
SEBI may initiate action for suspension or cancellation of his registration.

(7) MUTUAL FUND

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and
investing funds in securities in accordance with objectives as disclosed in offer document.
Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is
reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same
proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of
money invested by them. Investors of mutual funds are known as unitholders.

7a. REGISTRATION OF MUTUAL FUND

An application for registration of a mutual fund shall be made to the Board
by the sponsor. Every application for registration shall be accompanied by nonrefundable
application fee .An application, which is not complete in all respects shall be liable to be rejected
The Board may register the mutual fund and grant a certificate on the
applicant paying the registration fee.
Where the sponsor does not satisfy the eligibility criteria, the Board may reject the application
and inform the applicant of the same.
A mutual fund shall pay before the 15th April each year a service fee for every financial year
from the year following the year of registration:
Provided that the Board may, on being satisfied with the reasons for the delay permit the
mutual fund to pay the service fee at any time before the expiry of two months from the
commencement of the financial year to which such fee relates.
The Board may not permit a mutual fund who has not paid service fee to launch any
scheme.

7b. SCHEMES OF MUTUAL FUND

Procedure for launching of schemes

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 (1) No scheme shall be launched by the asset management company unless such
scheme is approved by the trustees and a copy of the offer document has been filed with
the Board.
(2) The mutual fund shall pay the minimum filing fee to the Board while filing the offer
document.
(3) The mutual fund shall pay the balance filing fee to the Board within such time as may be
specified by the Board.
Disclosures in the offer document
(1) The offer document shall contain disclosures which are adequate in order to
enable the investors to make informed investment decision.
(2) The Board may in the interest of investors require the asset management company to
carry out such modifications in the offer document as it deems fit.
(3) In case no modifications are suggested by the Board in the offer document within 21
working days from the date of filing, the asset management company may issue the
offer document.
(4) No one shall issue any form of application for units of a mutual fund unless the
form is accompanied by the memorandum containing such information as may be
specified by the Board.

7c. GENERAL OBLIGATIONS

To maintain proper books of account and records, etc.
(1) Every asset management company for each scheme shall keep and maintain
proper books of account, records and documents, for each scheme so as to explain its
transactions and to disclose at any point of time the financial position of each scheme.
(2) Every asset management company shall maintain and preserve for a period of
eight years its books of account, records and documents.
(3) The asset management company shall follow the accounting policies and standards so as to
provide appropriate details of the scheme wise disposition of the assets of the fund at the relevant
accounting date and the performance during that period together with information regarding
distribution or accumulation of income accruing to the unitholder in a fair and true manner.

Annual Report to be forwarded to the Board

Every mutual fund shall within six months from the date of closure of each
financial year forward to the Board a copy of the Annual Report and other information
including details of investments and deposits held by the mutual fund so that the entire
schemewise portfolio of the mutual funds is disclosed to the Board.
Periodic and continual disclosures
(1) The mutual fund, the asset management company, the trustee, custodian, sponsor
of the mutual fund shall make such disclosures or submit such documents as they may be
called upon to do so by the Board.
(2) the mutual fund shall furnish the following periodic reports to the Board, namely :—
(a) copies of the duly audited annual statements of accounts including the balance sheet
and the profit and loss account.
(b) a copy of six monthly unaudited accounts ;
(c) a quarterly statement of movements in the net assets for each of the schemes of the

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fund;
(d) a quarterly portfolio statement, including changes from the previous periods, for
each scheme.
(3) No sale of units of any scheme of a mutual fund shall be made by the trustees or an
asset management company unless accompanied by documents which contain all the
information

7d. INSPECTION AND AUDIT

The Board may undertake the inspection of the books of account, records, documents and
infrastructure, systems and procedures or to investigate the affairs of a mutual fund, the trustees
and asset management company.
Obligations on inspection and investigation
It shall be the duty of the mutual fund, trustees or asset management company
to produce books, accounts, records, and other documents in its custody or control to the
inspecting officer.
Action against intermediaries
The Board may initiate action for suspension or cancellation of registration of an
intermediary holding a certificate of registration who fails to exercise due diligence or to comply
with the obligations under these regulations.

REFERENCES:

1. FINANCIAL SERVICES 4th edition by M. Y. Khan

2. FINANCIAL SERVICES AND SYSTEM 2nd edition by S.Gurusamy
3. MARKETING OF FINANCIAL SERVICES 2nd edition by V. A. Avadhani
4. www.sebi.gov.in

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