Investment Material

Securities and Exchange Board of India Act, 1992
SECTIONS
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement

2. Definitions
CHAPTER II
ESTABLISHMENT OF THE SECURITIES AND
EXCHANGE BOARD OF INDIA
3. Establishment and incorporation of Board

4. Management of the Board
5. Term of office and conditions of service of Chairman and members of the Board
6. Removal of member from office
7. Meetings
7A. Member not to participate in meetings in certain cases
8. Vacancies, etc., not to invalidate proceedings of Board
9. Officers and employees of the Board
CHAPTER III
TRANSFER OF ASSETS, LIABILITIES, ETC., OF THE
EXISTING SECURITIES AND EXCHANGE
BOARD TO THE BOARD
10. Transfer of assets, liabilities, etc., of existing Securities and Exchange Board to the Board
CHAPTER IV
POWERS AND FUNCTIONS OF THE BOARD
11. Functions of Board

11A. Board to regulate or prohibit issue of prospectus, offer document or advertisement
soliciting money for issue of securities
11AA. Collective investment scheme
11B. Power to issue directions
11C. Investigation
11D. Cease and desist proceedings
CHAPTER V
REGISTRATION CERTIFICATE
12. Registration of stock brokers, sub-brokers, share transfer agents, etc.
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CHAPTER VA
PROHIBITION OF MANIPULATIVE AND DECEPTIVE
DEVICES, INSIDER TRADING AND SUBSTANTIAL
ACQUISITION OF SECURITIES OR CONTROL
12A. Prohibition of manipulative and deceptive devices, insider trading and substantial
acquisition of securities or control
CHAPTER VI
FINANCE, ACCOUNTS AND AUDIT
13. Grants by the Central Government

14. Fund
15. Accounts and audit
CHAPTER VIA
PENALTIES AND ADJUDICATION
15A. Penalty for failure to furnish information, return, etc.

15B. Penalty for failure by any person to enter into agreement with clients
15C. Penalty for failure to redress investors’ grievances
15D. Penalty for certain defaults in case of mutual funds
15E. Penalty for failure to observe rules and regulations by an asset management company
15EA. Penalty for default in case of alternative investment funds, infrastructure investment
trusts and real estate investment trusts.
15EB. Penalty for default in case of investment adviser and research analyst.
15F. Penalty for default in case of stock brokers
15G. Penalty for insider trading
15H. Penalty for non-disclosure of acquisition of shares and takeovers
15HA. Penalty for fraudulent and unfair trade practices
15HAA. Penalty for alteration, destruction, etc., of records and failure to protect the electronic
database of Board.
15HB. Penalty for contravention where no separate penalty has been provided
15-I. Power to adjudicate
15J. Factors to be taken into account by the Adjudicating Officer
15JA. Crediting sums realised by way of penalties to Consolidated Fund of India
15JB. Settlement of administrative and civil proceedings
CHAPTER VIB
ESTABLISHMENT, JURISDICTION, AUTHORITY AND
PROCEDURE OF APPELLATE TRIBUNAL
15K. Establishment of Securities Appellate Tribunals

15L. Composition of Securities Appellate Tribunal
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15M. Qualification for appointment as Presiding Officer or Member of Securities Appellate
Tribunal
15N. Tenure of office of Presiding Officer and other members of Securities Appellate
Tribunal
15-O. Salary and allowances and other terms and conditions of service of Presiding Officers
15P. Filling up of vacancies
15Q. Resignation and removal
15R. Orders constituting Appellate Tribunal to be final and not to invalidate its proceedings
15S. Staff of the Securities Appellate Tribunal
15T. Appeal to the Securities Appellate Tribunal
15U. Procedure and powers of the Securities Appellate Tribunal
15V. Right to legal representation
15W. Limitation
15X. Presiding Officer, members and staff of Securities Appellate Tribunals to be public
servants
15Y. Civil Court not to have jurisdiction
15Z. Appeal to Supreme Court
CHAPTER VII
MISCELLANEOUS
16. Power of Central Government to issue directions

17. Power of Central Government to supersede the Board
18. Returns and reports
19. Delegation
20. Appeals
20A. Bar of jurisdiction
21. Savings
22. Members, officers and employees of the Board to be public servants
23. Protection of action taken in good faith
24. Offences
24A. Composition of certain offences
24B. Power to grant immunity
25. Exemption from tax on wealth and income
26. Cognizance of offences by Courts
26A. Establishment of Special Courts
26B. Offences triable by Special Courts
26C. Appeal and revision
26D. Application of Code to proceedings before Special Court
26E. Transitional Provisions
27. Offences by companies
28. [Omitted by the Securities Laws (Amendment) Act, 1995, w.e.f. 25-1-1995]
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28A. Recovery of amounts
28B. Continuance of proceedings
29. Power to make rules
30. Power to make regulations
31. Rules and regulations to be laid before Parliament
32. Application of other laws not barred
33. [Repealed by Repealing & Amending Act, 2001]
34. Power to remove difficulties
34A. Validation of certain acts
35. Repeal and saving
THE SCHEDULE [Repealed by Repealing & Amending Act, 2001]
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SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992
[15 OF 1992]
[4th April, 1992]
An Act to provide for the establishment of a Board to protect the interests of investors in
securities and to promote the development of, and to regulate, the securities market and for
matters connected therewith or incidental thereto
BE it enacted by Parliament in the Forty-third Year of the Republic of India as follows:
CHAPTER I
PRELIMINARY
Short title, extent and commencement.
1. (1) This Act may be called the Securities and Exchange Board of India Act, 1992.
(2) It extends to the whole of India.
(3) It shall be deemed to have come into force on the 30th day of January, 1992.
Definitions.
2. (1) In this Act, unless the context otherwise requires,—
(a) “Board” means the Securities and Exchange Board of India established under section 3;
(b) “Chairman” means the Chairman of the Board;
1[(ba) “collective investment scheme” means any scheme or arrangement which satisfies the
conditions specified in section 11AA;]

(c) “existing Securities and Exchange Board” means the Securities and Exchange Board of
India constituted under the Resolution of the Government of India in the Department of
Economic Affairs No. 1(44) SE/86, dated the 12th day of April, 1988;
(d) “Fund” means the Fund constituted under section 14;
2[(da) Insurance Regulatory and Development Authority” means the Insurance Regulatory and
Development Authority of India established under sub-section (1) of section 3 of the

Insurance Regulatory and Development Authority Act, 1999;]
3[(db) Judicial Member” means a Member of the Securities Appellate Tribunal appointed under
sub-section (1) of section 15MA and includes the Presiding Officer;]

(e) “member” means a member of the Board and includes the Chairman;
(f) “notification” means a notification published in the Official Gazette;
4[(fa) Pension Fund Regulatory and Development Authority” means the Pension Fund
Regulatory and Development Authority established under subsection (1) of section 3 of

the Pension Fund Regulatory and Development Authority Act, 2013;]
(g) “prescribed” means prescribed by rules made under this Act;
(h) “regulations” means the regulations made by the Board under this Act;
1 Inserted by the Securities Laws (Amendment) Act, 1999, w.e.f. 22-2-2000.

2
Inserted by Part VIII of Chapter VI of the Finance Act, 2017 vide Gazette Notification No. 7, Extraordinary Prt II
Section 1 dated March 31, 2017. This shall come into force from April 26, 2017.
3
4
5
5[(ha) “Reserve Bank” means the Reserve Bank of India constituted under section 3 of the
Reserve Bank of India Act, 1934 (2 of 1934);]
(i) “securities” has the meaning assigned to it in section 2 of the Securities Contracts
(Regulation) Act, 1956 (42 of 1956);
6[(j) Technical Member” means a Technical Member appointed under sub-section (1) of section
15MB.]
7[(2) Words and expressions used and not defined in this Act but defined in the Securities
Contracts (Regulation) Act, 1956 (42 of 1956) 8[or the Depositories Act, 1996], shall have the
meanings respectively assigned to them in that Act].
CHAPTER II
ESTABLISHMENT OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
Establishment and incorporation of Board.
3. (1) With effect from such date as the Central Government may, by notification, appoint, there
shall be established, for the purposes of this Act, a Board by the name of the Securities and
Exchange Board of India.
(2) The Board shall be a body corporate by the name aforesaid, having perpetual succession and
a common seal, with power subject to the provisions of this Act, to acquire, hold and dispose of
property, both movable and immovable, and to contract, and shall, by the said name, sue or be
sued.
(3) The head office of the Board shall be at Bombay.
(4) The Board may establish offices at other places in India.
Management of the Board.

4. (1) The Board shall consist of the following members, namely:—
(a) a Chairman;
(b) two members from amongst the officials of the 9[Ministry] of the Central Government
dealing with Finance 10[and administration of the Companies Act, 1956 (1 of 1956)];
(c) one member from amongst the officials of 11[the Reserve Bank];

6
7 Substituted by the Securities Laws (Amendment) Act, 1995, w.e.f. 25-01-1995. Prior to its substitution, sub-
section (2) reads as under:

“(2) Words and expressions used and not defined in this Act but defined in the Capital Issues (Control)
Act, 1947 or the Securities Contracts Regulation Act, 1956 shall have the same meanings respectively
assigned to them in those Acts.”
8 Inserted by the Depositories Act, 1996, w.r.e.f. 20-09-1995.
9 Substituted for “Ministries” by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
10 Substituted for “and law”, by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
11 Substituted for “the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act
1934 (2 of 1934)”, by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

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12[(d) five
other members of whom at least three shall be the whole-time members,] to be
appointed by the Central Government.
(2) The general superintendence, direction and management of the affairs of the Board shall vest
in a Board of members, which may exercise all powers and do all acts and things which may be
exercised or done by the Board.
(3) Save as otherwise determined by regulations, the Chairman shall also have powers of general
superintendence and direction of the affairs of the Board and may also exercise all powers and
do all acts and things which may be exercised or done by that Board.
(4) The Chairman and members referred to in clauses (a) and (d) of sub-section (1) shall be
appointed by the Central Government and the members referred to in clauses (b) and (c) of that
sub-section shall be nominated by the Central Government and the 13[Reserve Bank] respectively.
(5) The Chairman and the other members referred to in clauses (a) and (d) of sub-section (1) shall
be persons of ability, integrity and standing who have shown capacity in dealing with problems
relating to securities market or have special knowledge or experience of law, finance, economics,
accountancy, administration or in any other discipline which, in the opinion of the Central
Government, shall be useful to the Board.
Term of office and conditions of service of Chairman and members of the Board.
5. (1) The term of office and other conditions of service of the Chairman and the members referred
to in clause (d) of sub-section (1) of section 4 shall be such as may be prescribed.
(2) Notwithstanding anything contained in sub-section (1), the Central Government shall have
the right to terminate the services of the Chairman or a member appointed under clause (d) of
sub-section (1) of section 4, at any time before the expiry of the period prescribed under sub-
section (1), by giving him notice of not less than three months in writing or three months’ salary
and allowances in lieu thereof, and the Chairman or a member, as the case may be, shall also have
the right to relinquish his office, at any time before the expiry of the period prescribed under sub-
section (1), by giving to the Central Government notice of not less than three months in writing.
Removal of member from office.

6. 14[* * *] The Central Government shall remove a member from office if he—
(a) is, or at any time has been, adjudicated as insolvent;
(b) is of unsound mind and stands so declared by a competent court;
(c) has been convicted of an offence which, in the opinion of the Central Government,
involves a moral turpitude;
(d) 15[* * *]
(e) has, in the opinion of the Central Government, so abused his position as to render his
continuation in office detrimental to the public interest :
Provided that no member shall be removed under this clause unless he has been given a
reasonable opportunity of being heard in the matter.
12 Substituted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002. Prior to its substitution, clause (d)
read as: “(d) two other members”.
13 Substituted for “Reserve Bank of India” by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
14 “(1)” omitted by Securities Laws (Amendment) Act 1995, w.e.f. 25-1-1995.
15 Omitted, by Securities Laws (Amendment) Act 1995, w.e.f. 25-1-1995. Prior to omission clause (d) read
as: “(d) is appointed as a director of a company”.

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Meetings.
7. (1) The Board shall meet at such times and places, and shall observe such rules of procedure in
regard to the transaction of business at its meetings (including quorum at such meetings) as may
be provided by regulations.
(2) The Chairman or, if for any reason, he is unable to attend a meeting of the Board, any other
member chosen by the members present from amongst themselves at the meeting shall preside
at the meeting.
(3) All questions which come up before any meeting of the Board shall be decided by a majority
votes of the members present and voting, and, in the event of an equality of votes, the Chairman,
or in his absence, the person presiding, shall have a second or casting vote.
16[Member not to participate in meetings in certain cases.

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

8. No act or proceeding of the Board shall be invalid merely by reason of—
(a) any vacancy in, or any defect in the constitution of, the Board; or
(b) any defect in the appointment of a person acting as a member of the Board; or
(c) any irregularity in the procedure of the Board not affecting the merits of the case.
Officers and employees of the Board.

9. (1) The Board may appoint such other officers and employees as it considers necessary for the
efficient discharge of its functions under this Act.
(2) The term and other conditions of service of officers and employees of the Board appointed
under sub-section (1) shall be such as may be determined by regulations.
CHAPTER III
TRANSFER OF ASSETS, LIABILITIES, ETC., OF THE EXISTING SECURITIES AND
EXCHANGE BOARD TO THE BOARD
Transfer of assets, liabilities, etc., of existing Securities and Exchange Board to the Board.
10. (1) On and from the date of establishment of the Board,—
(a) any reference to the existing Securities and Exchange Board in any law other than this Act
or in any contract or other instrument shall be deemed as a reference to the Board;
(b) all properties and assets, movable and immovable, of, or belonging to, the existing
Securities and Exchange Board, shall vest in the Board;
16 Inserted by Securities Laws (Amendment) Act 1995, w.e.f. 25-1-1995.

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(c) all rights and liabilities of the existing Securities and Exchange Board shall be transferred
to, and be the rights and liabilities of, the Board;
(d) without prejudice to the provisions of clause (c), all debts, obligations and liabilities
incurred, all contracts entered into and all matters and things engaged to be done by, with
or for the existing Securities and Exchange Board immediately before that date, for or in
connection with the purpose of the said existing Board shall be deemed to have been
incurred, entered into, or engaged to be done by, with or for, the Board;
(e) all sums of money due to the existing Securities and Exchange Board immediately before
that date shall be deemed to be due to the Board;
(f) all suits and other legal proceedings instituted or which could have been instituted by or
against the existing Securities and Exchange Board immediately before that date may be
continued or may be instituted by or against the Board; and
(g) every employee holding any office under the existing Securities and Exchange Board
immediately before that date shall hold his office in the Board by the same tenure and
upon the same terms and conditions of service as respects remuneration, leave, provident
fund, retirement and other terminal benefits as he would have held such office if the Board
had not been established and shall continue to do so as an employee of the Board or until
the expiry of the period of six months from that date if such employee opts not to be the
employee of the Board within such period.
(2) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or in
any other law for the time being in force, absorption of any employee by the Board in its regular
service under this section shall not entitle such employee to any compensation under that Act or
other law and no such claim shall be entertained by any court, tribunal or other authority.
CHAPTER IV
POWERS AND FUNCTIONS OF THE BOARD
Functions of Board.
11. (1) Subject to the provisions of this Act, it shall be the duty of the Board to protect the interests
of investors in securities and to promote the development of, and to regulate the securities
market, by such measures as it thinks fit.
(2) Without prejudice to the generality of the foregoing provisions, the measures referred to
therein may provide for—
(a) regulating the business in stock exchanges and any other securities markets;
(b) registering and regulating the working of stock brokers, sub-brokers, share transfer
agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant
bankers, underwriters, portfolio managers, investment advisers and such other
intermediaries who may be associated with securities markets in any manner;
17[(ba) registering and regulating the working of the depositories, 18[participants], custodians
of securities, foreign institutional investors, credit rating agencies and such other
intermediaries as the Board may, by notification, specify in this behalf;]
(c) registering and regulating the working of 19[venture capital funds and collective
investment schemes], including mutual funds;
17 Inserted by Securities Laws (Amendment) Act 1995, w.r.e.f. 25-1-1995.

19 Substituted for “collective investment schemes” by Securities Laws (Amendment) Act 1995, w.e.f. 25-1-
1995.
9
(d) promoting and regulating self-regulatory organisations;
(e) prohibiting fraudulent and unfair trade practices relating to securities markets;
(f) promoting investors’ education and training of intermediaries of securities markets;
(g) prohibiting insider trading in securities;
(h) regulating substantial acquisition of shares and take over of companies;
(i) calling for information from, undertaking inspection, conducting inquiries and audits of
the 20[stock exchanges, mutual funds, other persons associated with the securities market],
intermediaries and self-regulatory organisations in the securities market;
21[(ia) calling for information and records from any person including any bank or any other
authority or board or corporation established or constituted by or under any Central or

State Act which, in the opinion of the Board, shall be relevant to any investigation or
inquiry by the Board in respect of any transaction in securities;]
22[(ib) calling for information from, or furnishing information to, other authorities, whether in
India or outside India, having functions similar to those of the Board, in the matters
relating to the prevention or detection of violations in respect of securities laws, subject to
the provisions of other laws for the time being in force in this regard:
Provided that the Board, for the purpose of furnishing any information to any
authority outside India, may enter into an arrangement or agreement or understanding
with such authority with the prior approval of the Central Government;]
(j) performing such functions and exercising such powers under the provisions of 23[* * *] the
Securities Contracts (Regulation) Act, 1956 (42 of 1956), as may be delegated to it by the
Central Government;
(k) levying fees or other charges for carrying out the purposes of this section;
(l) conducting research for the above purposes;
24[(la) calling from or furnishing to any such agencies, as may be specified by the Board, such
information as may be considered necessary by it for the efficient discharge of its

functions;]
(m) performing such other functions as may be prescribed.
25[(2A) Without prejudice to the provisions contained in sub-section (2), the Board may take
measures to undertake inspection of any book, or register, or other document or record of any
listed public company or a public company (not being intermediaries referred to in section 12)
which intends to get its securities listed on any recognised stock exchange where the Board has
reasonable grounds to believe that such company has been indulging in insider trading or
fraudulent and unfair trade practices relating to securities market.]
20 Substituted for “stock exchanges and” by the Securities Laws (Amendment) Act 1995, w.e.f. 25-1-1995.
21 Substituted for “calling for information and record from any bank or any other authority or board or
corporation established or constituted by or under any Central, State or Provincial Act in respect of any
transaction in securities which is under investigation or inquiry by the Board” by the Securities Laws
(Amendment) Act, 2014, w.r.e.f. 18-07-2013. Earlier, section 11(2)(ia) was inserted by the SEBI
(Amendment) Act, 2002 w.e.f. 29-10-2002.
22 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 06-03-1998.
23 The words “the Capital Issues (Control) Act, 1947 (29 of 1947) and” omitted by the Securities Laws
(Amendment) Act 1995, w.e.f. 25-1-1995.

24 Inserted by the Securities Laws (Amendment) Act 1995, w.e.f. 25-1-1995.
25 Inserted by the the SEBI (Amendment) Act, 2002 w.e.f. 29-10-2002.
10
26[(3)Notwithstanding anything contained in any other law for the time being in force while
exercising the powers under 27[clause (i) or clause (ia) of sub-section (2) or sub- section (2A)], the
Board shall have the same powers as are vested in a civil court under the Code of Civil Procedure,
1908 (5 of 1908), while trying a suit, in respect of the following matters, namely :—
(i) the discovery and production of books of account and other documents, at such place and
such time as may be specified by the Board;
(ii) summoning and enforcing the attendance of persons and examining them on oath;
(iii) inspection of any books, registers and other documents of any person referred to in section
12, at any place;]
28[(iv) inspection of any book, or register, or other document or record of the company referred
to in sub-section (2A);
(v) issuing commissions for the examination of witnesses or documents.]
29[(4)Without prejudice to the provisions contained in sub-sections (1), (2), (2A) and (3) and
section 11B, the Board may, by an order, for reasons to be recorded in writing, in the interests of
investors or securities market, take any of the following measures, either pending investigation
or inquiry or on completion of such investigation or inquiry, namely:—
(a) suspend the trading of any security in a recognised stock exchange;
(b) restrain persons from accessing the securities market and prohibit any person associated
with securities market to buy, sell or deal in securities;
(c) suspend any office-bearer of any stock exchange or self-regulatory organisation from
holding such position;
(d) impound and retain the proceeds or securities in respect of any transaction which is under
investigation;
(e) 30[attach, for a period not exceeding ninety days, bank accounts or other property of any
intermediary or any person associated with the securities market in any manner involved
in violation of any of the provisions of this Act, or the rules or the regulations made
thereunder:
Provided that the Board shall, within ninety days of the said attachment, obtain
confirmation of the said attachment from the Special Court, established under section 26A,
having jurisdiction and on such confirmation, such attachment shall continue during the
pendency of the aforesaid proceedings and on conclusion of the said proceedings, the
provisions of section 28A shall apply:

27 Substituted for “clause (i) of sub-section (2)” by the SEBI (Amendment) Act, 2002 w.e.f. 29-10-2002.
28 Inserted by the SEBI (Amendment) Act, 2002 w.e.f. 29-10-2002.
29 Inserted by the SEBI (Amendment) Act, 2002 w.e.f. 29-10-2002.
30
Substituted by the Banning of Unregulated Deposit Schemes Ordinance, 2019 [No. 7 of 2019] w.e.f 21-2-
2019. Prior to its substitution, clause (e) read as follows,-
"(e) attach, after passing of an order on an application made for approval by the Judicial Magistrate
of the first class having jurisdiction, for a period not exceeding one month, one or more bank account
or accounts of any intermediary or any person associated with the securities market in any manner
involved in violation of any of the provisions of this Act, or the rules or the regulations made
thereunder :
Provided that only the bank account or accounts or any transaction entered therein, so far
as it relates to the proceeds actually involved in violation of any of the provisions of this Act, or the
rules or the regulations made thereunder shall be allowed to be attached;”
11
Provided further that only property, bank account or accounts or any transaction
entered therein, so far as it relates to the proceeds actually involved in violation of any of
the provisions of this Act, or the rules or the regulations made thereunder shall be allowed
to be attached];
(f) direct any intermediary or any person associated with the securities market in any manner
not to dispose of or alienate an asset forming part of any transaction which is under
investigation :
Provided that the Board may, without prejudice to the provisions contained in sub-section (2) or
sub-section (2A), take any of the measures specified in clause (d) or clause (e) or clause (f), in
respect of any listed public company or a public company (not being intermediaries referred to
in section 12) which intends to get its securities listed on any recognised stock exchange where
the Board has reasonable grounds to believe that such company has been indulging in insider
trading or fraudulent and unfair trade practices relating to securities market :
Provided further that the Board shall, either before or after passing such orders, give an
opportunity of hearing to such intermediaries or persons concerned.]
31[(4A)Without prejudice to the provisions contained in sub-sections (1), (2), (2A), (3) and (4),
section 11B and section 15-I, the Board may, by an order, for reasons to be recorded in writing,
levy penalty under sections 15A, 15B, 15C, 15D, 15E, 15EA, 15EB, 15F, 15G, 15H, 15HA and 15HB
after holding an inquiry in the prescribed manner.]
32[(5)The amount disgorged, pursuant to a direction issued, under section 11B of this Act or
section 12A of the Securities Contracts (Regulation) Act, 1956 or section 19 of the Depositories
Act, 1996 , 33[or under a settlement made under section 15JB or section 23JA of the Securities
Contracts (Regulation) Act, 1956 or section 19-IA of the Depositories Act, 1996,] as the case may
be, shall be credited to the Investor Protection and Education Fund established by the Board and
such amount shall be utilised by the Board in accordance with the regulations made under this
Act.]
34[Board to regulate or prohibit issue of prospectus, offer document or advertisement soliciting

money for issue of securities.
11A. (1) Without prejudice to the provisions of the Companies Act, 1956 (1 of 1956), the Board
may, for the protection of investors,—
(a) specify, by regulations—
31
Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.
32 Inserted by the Securities Laws (Amendment) Act, 2014 w.e.f. 18-07-2013.
33
34 Substituted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002. Earlier section 11A was inserted by
the Securities Laws (Amendment) Act, 1995, w.e.f. 25-1-1995. Prior to its substitution, section 11A read as
under:-
“11A. Matters to be disclosed by the companies.- Without Prejudice to the Provisions of the Companies Act
, 1956 (1 of 1956), the board may , for the protection of investors, specify, by regulations,-
(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.”
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(i) the matters relating to issue of capital, transfer of securities and other matters
incidental thereto; and
(ii) the manner in which such matters shall be disclosed by the companies;
(b) by general or special orders—
(i) prohibit any company from issuing prospectus, any offer document, or advertisement
soliciting money from the public for the issue of securities;
(ii) specify the conditions subject to which the prospectus, such offer document or
advertisement, if not prohibited, may be issued.
(2) Without prejudice to the provisions of section 21 of the Securities Contracts (Regulation) Act,
1956 (42 of 1956), the Board may specify the requirements for listing and transfer of securities and
other matters incidental thereto.]
35[Collective investment scheme.

11AA. (1) Any scheme or arrangement which satisfies the conditions referred to in sub-section
(2) 36[or sub-section (2A)] shall be a collective investment scheme:
37[Provided
that any pooling of funds under any scheme or arrangement, which is
not registered with the Board or is not covered under sub-section (3), involving a corpus amount
of one hundred crore rupees or more shall be deemed to be a collective investment scheme.]
(2) Any scheme or arrangement made or offered by any 38[person] under which,—
(i) the contributions, or payments made by the investors, by whatever name called, are
pooled and utilized for the purposes of the scheme or arrangement;
(ii) the contributions or payments are made to such scheme or arrangement by the investors
with a view to receive profits, income, produce or property, whether movable or
immovable, from such scheme or arrangement;
(iii) the property, contribution or investment forming part of scheme or arrangement, whether
identifiable or not, is managed on behalf of the investors;
(iv) the investors do not have day-to-day control over the management and operation of the
scheme or arrangement.
39[(2A)]
Any scheme or arrangement made or offered by any person satisfying the conditions as
may be specified in accordance with the regulations made under this Act.]
(3) Notwithstanding anything contained in sub-section (2) 40[or sub-section (2A)], any scheme or
arrangement—
(i) made or offered by a co-operative society registered under the Co-operative Societies Act,
1912 (2 of 1912) or a society being a society registered or deemed to be registered under
any law relating to co-operative societies for the time being in force in any State;
(ii) under which deposits are accepted by non-banking financial companies as defined in
clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);
35Inserted by the SEBI (Amendment) Act 1999, w.e.f. 22-2-2000.

36Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013.
38 Substituted for “company” by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013.
13
(iii) being a contract of insurance to which the Insurance Act, 1938 (4 of 1938), applies;
(iv) providing for any Scheme, Pension Scheme or the Insurance Scheme framed under the
Employees Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952);
(v) under which deposits are accepted under section 58A of the Companies Act, 1956 (1 of
1956);
(vi) under which deposits are accepted by a company declared as a Nidhi or a mutual benefit
society under section 620A of the Companies Act, 1956 (1 of 1956);
(vii) falling within the meaning of Chit business as defined in clause (d) of section 2 of the Chit
Fund Act, 1982 (40 of 1982);
(viii) under which contributions made are in the nature of subscription to a mutual fund;
41[(ix) such other scheme or arrangement which the Central Government may, in consultation
with the Board, notify,]

shall not be a collective investment scheme.]
42[Power to issue directions 43[and levy penalty].

11B. 44[(1)[ Save as otherwise provided in section 11, if after making or causing to be made an
enquiry, the Board is satisfied that it is necessary,—
(i) in the interest of investors, or orderly development of securities market; or
(ii) to prevent the affairs of any intermediary or other persons referred to in section 12 being
conducted in a manner detrimental to the interest of investors or securities market; or
(iii) to secure the proper management of any such intermediary or person,
it may issue such directions,—
(a) to any person or class of persons referred to in section 12, or associated with the securities
market; or
(b) to any company in respect of matters specified in section 11A, as may be appropriate in
the interests of investors in securities and the securities market.]
45[Explanation.—For the removal of doubts, it is hereby declared that the power to issue
directions under this section shall include and always be deemed to have been included the
power to direct any person, who made profit or averted loss by indulging in any transaction or
activity in contravention of the provisions of this Act or regulations made thereunder, to disgorge
an amount equivalent to the wrongful gain made or loss averted by such contravention.]
(2) Without prejudice to the provisions contained in sub-section (1), sub-section (4A) of section
46[
11 and section 15-I, the Board may, by an order, for reasons to be recorded in writing, levy penalty
under sections 15A, 15B, 15C, 15D, 15E, 15EA, 15EB, 15F, 15G, 15H, 15HA and 15HB after
holding an inquiry in the prescribed manner.]
47[Investigation.
11C. (1) Where the Board has reasonable ground to believe that—

43
44
46
47 Inserted by SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
14
(a) the transactions in securities are being dealt with in a manner detrimental to the investors
or the securities market; or
(b) any intermediary or any person associated with the securities market has violated any of
the provisions of this Act or the rules or the regulations made or directions issued by the
Board thereunder,
it may, at any time by order in writing, direct any person (hereafter in this section referred to as
the Investigating Authority) specified in the order to investigate the affairs of such intermediary
or persons associated with the securities market and to report thereon to the Board.
(2) Without prejudice to the provisions of sections 235 to 241 of the Companies Act, 1956 (1 of
1956), it shall be the duty of every manager, managing director, officer and other employee of the
company and every intermediary referred to in section 12 or every person associated with the
securities market to preserve and to produce to the Investigating Authority or any person
authorised by it in this behalf, all the books, registers, other documents and record of, or relating
to, the company or, as the case may be, of or relating to, the intermediary or such person, which
are in their custody or power.
(3) The Investigating Authority may require any intermediary or any person associated with
securities market in any manner to furnish such information to, or produce such books, or
registers, or other documents, or record before him or any person authorised by it in this behalf
as it may consider necessary if the furnishing of such information or the production of such books,
or registers, or other documents, or record is relevant or necessary for the purposes of its
investigation.
(4) The Investigating Authority may keep in its custody any books, registers, other documents
and record produced under sub-section (2) or sub-section (3) for six months and thereafter shall
return the same to any intermediary or any person associated with securities market by whom or
on whose behalf the books, registers, other documents and record are produced :
Provided that the Investigating Authority may call for any book, register, other document and
record if they are needed again :
Provided further that if the person on whose behalf the books, registers, other documents and
record are produced requires certified copies of the books, registers, other documents and record
produced before the Investigating Authority, it shall give certified copies of such books, registers,
other documents and record to such person or on whose behalf the books, registers, other
documents and record were produced.
(5) Any person, directed to make an investigation under sub-section (1), may examine on oath,
any manager, managing director, officer and other employee of any intermediary or any person
associated with securities market in any manner, in relation to the affairs of his business and may
administer an oath accordingly and for that purpose may require any of those persons to appear
before it personally.
(6) If any person fails without reasonable cause or refuses—
(a) to produce to the Investigating Authority or any person authorised by it in this behalf any
book, register, other document and record which is his duty under sub-section (2) or sub-
section (3) to produce; or
(b) to furnish any information which is his duty under sub-section (3) to furnish; or
(c) to appear before the Investigating Authority personally when required to do so under
sub-section (5) or to answer any question which is put to him by the Investigating
Authority in pursuance of that sub-section; or
(d) to sign the notes of any examination referred to in sub-section (7),
15
he shall be punishable with imprisonment for a term which may extend to one year, or with fine,
which may extend to one crore rupees, or with both, and also with a further fine which may
extend to five lakh rupees for every day after the first during which the failure or refusal
continues.
(7) Notes of any examination under sub-section (5) shall be taken down in writing and shall be
read over to, or by, and signed by, the person examined, and may thereafter be used in evidence
against him.
(8) Where in the course of investigation, the Investigating Authority has reasonable ground to
believe that the books, registers, other documents and record of, or relating to, any intermediary
or any person associated with securities market in any manner, may be destroyed, mutilated,
altered, falsified or secreted, the Investigating Authority may make an application to 48[the
Magistrate or Judge of such designated court in Mumbai, as may be notified by the Central
Government] for an order for the seizure of such books, registers, other documents and record.
49[(8A) The authorised officer may requisition the services of any police officer or any officer of
the Central Government, or of both, to assist him for all or any of the purposes specified in sub-
section (8) and it shall be the duty of every such officer to comply with such requisition.]
(9) After considering the application and hearing the Investigating Authority, if necessary, 50[the
Magistrate or Judge of the Designated Court] may, by order, authorise the Investigating Authority
–
(a) to enter, with such assistance, as may be required, the place or places where such books,
registers, other documents and record are kept;
(b) to search that place or those places in the manner specified in the order; and
(c ) to seize books, registers, other documents and record, it considers necessary for the
purposes of the investigation:
Provided that 51[the Magistrate or Judge of the Designated Court] shall not authorise seizure of
books, registers, other documents and record, of any listed public company or a public company
(not being the intermediaries specified under section 12) which intends to get its securities listed
on any recognised stock exchange unless such company indulges in insider trading or market
manipulation.
(10) The Investigating Authority shall keep in its custody the books, registers, other documents
and record seized under this section for such period not later than the conclusion of the
investigation as it considers necessary and thereafter shall return the same to the company or the
other body corporate, or, as the case may be, to the managing director or the manager or any other
person, from whose custody or power they were seized and inform 52[the Magistrate or Judge of
the Designated Court] of such return:
Provided that the Investigating Authority may, before returning such books, registers, other
documents and record as aforesaid, place identification marks on them or any part thereof.
(11) Save as otherwise provided in this section, every search or seizure made under this section
shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973
(2 of 1974) relating to searches or seizures made under that Code.
Cease and desist proceedings.
48
Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013.
49
50
51
Inserted by the Securities Laws (Amendment) Act, 2014 , w.r.e.f. 18-07-2013.
52
16
11D. If the Board finds, after causing an inquiry to be made, that any person has violated, or is
likely to violate, any provisions of this Act, or any rules or regulations made thereunder, it may
pass an order requiring such person to cease and desist from committing or causing such
violation:
Provided that the Board shall not pass such order in respect of any listed public company or a
public company (other than the intermediaries specified under section 12) which intends to get
its securities listed on any recognised stock exchange unless the Board has reasonable grounds to
believe that such company has indulged in insider trading or market manipulation.]
CHAPTER V
REGISTRATION CERTIFICATE
Registration of stock brokers, sub-brokers, share transfer agents, etc.
12. (1) No stock broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed,
registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and
such other intermediary who may be associated with securities market shall buy, sell or deal in
securities except under, and in accordance with, the conditions of a certificate of registration
obtained from the Board in accordance with the 53[regulations] made under this Act:
Provided that a person buying or selling securities or otherwise dealing with the securities market
as a stock broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed,
registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and
such other intermediary who may be associated with securities market immediately before the
establishment of the Board for which no registration certificate was necessary prior to such
establishment, may continue to do so for a period of three months from such establishment or, if
he has made an application for such registration within the said period of three months, till the
disposal of such application:
54[Provided further that any certificate of registration, obtained immediately before the
commencement of the Securities Laws (Amendment) Act, 1995, shall be deemed to have been
obtained from the Board in accordance with the regulations providing for such registration.
(1A) No depository, 55[participant,] custodian of securities, foreign institutional investor, credit
rating agency, or any other intermediary associated with the securities market as the Board may
by notification in this behalf specify, shall buy or sell or deal in securities except under and in
accordance with the conditions of a certificate of registration obtained from the Board in
accordance with the regulations made under this Act:
Provided that a person buying or selling securities or otherwise dealing with the securities market
as a depository, 56[participant,] custodian of securities, foreign institutional investor or credit
rating agency immediately before the commencement of the Securities Laws (Amendment) Act,
1995, for which no certificate of registration was required prior to such commencement, may
continue to buy or sell securities or otherwise deal with the securities market until such time
regulations are made under clause (d) of sub-section (2) of section 30.
53 Substituted for “rules” by Securities Law (Amendment) Act, 1995, w.e.f. 25-1-1995.
17
(1B) No person shall sponsor or cause to be sponsored or carry on or caused to be carried on any
venture capital funds or collective investment schemes including mutual funds, unless he obtains
a certificate of registration from the Board in accordance with the regulations:
Provided that any person sponsoring or causing to be sponsored, carrying or causing to be carried
on any venture capital funds or collective investment schemes operating in the securities market
immediately before the commencement of the Securities Laws (Amendment) Act, 1995, for which
no certificate of registration was required prior to such commencement, may continue to operate
till such time regulations are made under clause (d) of sub-section (2) of section 30.]
57[Explanation- For the removal of doubts, it is hereby declared that, for purposes of this section,
a collective investment scheme or mutual fund shall not include any unit linked insurance policy
or scrips or any such instrument or unit, by whatever name called, which provides a component
of investment besides the component of insurance issued by an insurer.]
(2) Every application for registration shall be in such manner and on payment of such fees as may
be determined by regulations.
(3) The Board may, by order, suspend or cancel a certificate of registration in such manner as may
be determined by regulations:
Provided that no order under this sub-section shall be made unless the person concerned has
been given a reasonable opportunity of being heard.
58[CHAPTER VA
PROHIBITION OF MANIPULATIVE AND DECEPTIVE DEVICES, INSIDER TRADING
AND SUBSTANTIAL ACQUISITION OF SECURITIES OR CONTROL
Prohibition of manipulative and deceptive devices, insider trading and substantial acquisition
of securities or control.
12A. No person shall directly or indirectly—
57 Inserted by the Securities and Insurance Laws (Amendment and Validation) Act, 2010, w.r.e.f 9-4-2010.
Chapter VI of the Securities and Insurance Laws (Amendment and Validation) Act, 2010, reads as under:
CHAPTER VI
MISCELLANEOUS
6. Validation- Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other
authority, the provisions of section 2 of the Insurance Act, 1938 (4 of 1938) or section 2 of the Securities Contracts
(Regulation) Act, 1956 (42 of 1956) or section 12 of the Securities and Exchange Board of India Act, 1992 (15 of
1992), as amended by this Act, shall have and shall be deemed to always have effect for all purposes as if the provisions
of the said Acts, as amended by this Act, had been in force at all material times and accordingly any unit linked
insurance policy or scrips or any such instrument or unit, by whatever name called, issued or purported to have been
issued at any time before the 9th day of April, 2010, shall be deemed and always deemed to have been validly issued
and shall not be called in question in any court of law or other authority solely on the ground that it was issued
without a certificate of registration under any law for the time being in force or without following any procedure
under any law for the time being in force, by an insurer or any other person.
7. Repeal and savings - (1) The Securities and Insurance Laws (Amendment and Validation) Ordinance, 2010 (Ord.
3 of 2010) is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the Reserve Bank of India Act, 1934 (2 of
1934) or the Insurance Act, 1938 (4 of 1938) or the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the
Securities and Exchange Board of India Act, 1992 (15 of 1992), as amended by the said Ordinance, shall be deemed to
have been done or taken under the corresponding provisions of those Acts, as amended by this Act.
58 Chapter VA inserted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
18
(a) use or employ, in connection with the issue, purchase or sale of any securities listed or
proposed to be listed on a recognized stock exchange, any manipulative or deceptive
device or contrivance in contravention of the provisions of this Act or the rules or the
regulations made thereunder;
(b) employ any device, scheme or artifice to defraud in connection with issue or dealing in
securities which are listed or proposed to be listed on a recognised stock exchange;
(c) engage in any act, practice, course of business which operates or would operate as fraud
or deceit upon any person, in connection with the issue, dealing in securities which are
listed or proposed to be listed on a recognised stock exchange, in contravention of the
provisions of this Act or the rules or the regulations made thereunder;
(d) engage in insider trading;
(e) deal in securities while in possession of material or non-public information or
communicate such material or non-public information to any other person, in a manner
which is in contravention of the provisions of this Act or the rules or the regulations made
thereunder;
(f) acquire control of any company or securities more than the percentage of equity share
capital of a company whose securities are listed or proposed to be listed on a recognised
stock exchange in contravention of the regulations made under this Act.]
CHAPTER VI
FINANCE, ACCOUNTS AND AUDIT
Grants by the Central Government.
13. The Central Government may, after due appropriation made by Parliament by law in this
behalf, make to the Board grants of such sums of money as that Government may think fit for
being utilized for the purposes of this Act.
Fund.
14. (1) There shall be constituted a Fund to be called the Securities and Exchange Board of India
General Fund and there shall be credited thereto—
(a) all grants, fees and charges received by the Board under this Act;
59 [* * *]
(aa) 60[* * *]
(b) all sums received by the Board from such other sources as may be decided upon by the
Central Government.
(2) The Fund shall be applied for meeting—
(a) the salaries, allowances and other remuneration of the members, officers and other
employees of the Board;
(b) the expenses of the Board in the discharge of its functions under section 11;
59The word “and” omitted by Securities Laws (Amendment) Act, 1995, w.e.f. 25-1-1995.
60Clause (aa) omitted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002. It was inserted by Securities
Laws (Amendment) Act, 1995, w.e.f. 25-1-1995. Prior to its omission, clause (aa) reads as under:-
“(aa) all sums realized by way of Penalties under this Act; and”.
19
(c) the expenses on objects and for purposes authorised by this Act.
Accounts and audit.

15. (1) The Board shall maintain proper accounts and other relevant records and prepare an
annual statement of accounts in such form as may be prescribed by the Central Government in
consultation with the Comptroller and Auditor-General of India.
(2) The accounts of the Board shall be audited by the Comptroller and Auditor-General of India
at such intervals as may be specified by him and any expenditure incurred in connection with
such audit shall be payable by the Board to the Comptroller and Auditor-General of India.
(3) The Comptroller and Auditor-General of India and any other person appointed by him in
connection with the audit of the accounts of the Board shall have the same rights and privileges
and authority in connection with such audit as the Comptroller and Auditor-General generally
has in connection with the audit of the Government accounts and, in particular, shall have the
right to demand the production of books, accounts, connected vouchers and other documents
and papers and to inspect any of the offices of the Board.
(4) The accounts of the Board as certified by the Comptroller and Auditor-General of India or any
other person appointed by him in this behalf together with the audit report thereon shall be
forwarded annually to the Central Government and that Government shall cause the same to be
laid before each House of Parliament.
61[CHAPTER VIA
PENALTIES AND ADJUDICATION
Penalty for failure to furnish information, return, etc.
15A. If any person, who is required under this Act or any rules or regulations made thereunder,—
(a) to furnish any document, return or report to the Board, fails to furnish the same 62[or who
furnishes or files false, incorrect or incomplete information, return, report, books or other
documents], he shall be liable to 63[a penalty 64[which shall not be less than one lakh rupees
but which may extend to one lakh rupees for each day during which such failure
continues subject to a maximum of one crore rupees]];
(b) to file any return or furnish any information, books or other documents within the time
specified therefor in the regulations, fails to file return or furnish the same within the time
specified therefor in the regulations 65[or who furnishes or files false, incorrect or
incomplete information, return, report, books or other documents ], he shall be liable to 66[a
61 Chapters VI A and VI B containing sections 15A to 15J and 15K to 15Z respectively, inserted by Securities
Laws (Amendment) Act, 1995 w.e.f. 25-1-1995.
62
63 Substituted for “a penalty not exceeding one lakh and fifty thousand rupees for each such failure” by the
SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

64
Substituted for the words “of one lakh rupees for each day during which such failure continues or one
crore rupees, whichever is less” by the Securities Laws (Amendment) Act, 2014, w.e.f. 08-09-2014.
65
66 Substituted for “a penalty not exceeding five thousand rupees for every day during which such failure
continues”, by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

20
penalty 67[which shall not be less than one lakh rupees but which may extend to one lakh
rupees for each day during which such failure continues subject to a maximum of one
crore rupees]];
(c) to maintain books of account or records, fails to maintain the same, he shall be liable to
68[a penalty 69[which shall not be less than one lakh rupees but which may extend to one
lakh rupees for each day during which such failure continues subject to a maximum of
one crore rupees]].
Penalty for failure by any person to enter into agreement with clients.
15B. If any person, who is registered as an intermediary and is required under this Act or any
rules or regulations made thereunder to enter into an agreement with his client, fails to enter into
such agreement, he shall be liable to 70[a penalty 71[which shall not be less than one lakh rupees
but which may extend to one lakh rupees for each day during which such failure continues subject
to a maximum of one crore rupees]].
72[Penalty for failure to redress investors’ grievances.

15C. If any listed company or any person who is registered as an intermediary, after having been
called upon by the Board in writing 73[including by any means of electronic communication], to
redress the grievances of investors, fails to redress such grievances within the time specified by
the Board, such company or intermediary shall be liable to a penalty 74[which shall not be less
than one lakh rupees but which may extend to one lakh rupees for each day during which such
failure continues subject to a maximum of one crore rupees].
Penalty for certain defaults in case of mutual funds.

15D. If any person, who is—
(a) required under this Act or any rules or regulations made thereunder to obtain a certificate
of registration from the Board for sponsoring or carrying on any collective investment
scheme, including mutual funds, sponsors or carries on any collective investment scheme,
including mutual funds, without obtaining such certificate of registration, he shall be
67
68 Substituted for “a penalty not exceeding ten thousand rupees for every day during which the failure
continues”, by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

69
70 Substituted for “a penalty not exceeding five lakh rupees for every such failure”, by the SEBI
(Amendment) Act, 2002, w.e.f. 29-10-2002.

71
72 Substituted for “If any person, who is registered as an intermediary, after having been called upon by
the Board in writing to redress the grievances of investors, fails to redress such grievances, he shall be liable
to a penalty not exceeding ten thousand rupees for each such failure”, by the SEBI (Amendment) Act , 2002,
w.e.f. 29-10-2002.
73
Inserted by the Finance (No.2) Act, 2019, w.e.f. 20-01-2020.
74
21
liable to 75[a penalty 76[which shall not be less than one lakh rupees but which may extend
to one lakh rupees for each day during which he sponsors or carries on any such collective
investment scheme including mutual funds subject to a maximum of one crore rupees]];
(b) registered with the Board as a collective investment scheme, including mutual
funds, for sponsoring or carrying on any investment scheme, fails to comply with the
terms and conditions of certificate of registration, he shall be liable to 77[a penalty 78[which
shall not be less than one lakh rupees but which may extend to one lakh rupees for each
day during which such failure continues subject to a maximum of one crore rupees]];
(c) registered with the Board as a collective investment scheme, including mutual funds, fails
to make an application for listing of its schemes as provided for in the regulations
governing such listing, he shall be liable to 79[a penalty 80[which shall not be less than one
lakh rupees but which may extend to one lakh rupees for each day during which such
failure continues subject to a maximum of one crore rupees]];
(d) registered as a collective investment scheme, including mutual funds, fails to despatch
unit certificates of any scheme in the manner provided in the regulation governing such
despatch, he shall be liable to 81[a penalty 82[which shall not be less than one lakh rupees
but which may extend to one lakh rupees for each day during which such failure
continues subject to a maximum of one crore rupees]];
(e) registered as a collective investment scheme, including mutual funds, fails to refund the
application monies paid by the investors within the period specified in the regulations, he
shall be liable to 83[a penalty 84[which shall not be less than one lakh rupees but which may
extend to one lakh rupees for each day during which such failure continues subject to a
maximum of one crore rupees]];
(f) registered as a collective investment scheme, including mutual funds, fails to invest
money collected by such collective investment schemes in the manner or within the period
75 Substituted for “a penalty not exceeding ten thousand rupees for each day during which he carries on
any such collective investment scheme including mutual funds, or ten lakh rupees whichever is higher.”
by the SEBI (Amendment) Act , 2002, w.e.f. 29-10-2002.
76
Substituted for the words “of one lakh rupees for each day during which the sponsors or carries on any
collective investment scheme including mutual funds, or one crore rupees, whichever is less” by the
Securities Laws (Amendment) Act, 2014, w.e.f. 08-09-2014.
77 Substituted for “a penalty not exceeding ten thousand rupees for each day during which such failure
continues or ten lakh rupees, whichever is higher” by the SEBI (Amendment) Act , 2002, w.e.f. 29-10-2002.
78
79 Substituted for “a penalty not exceeding five thousand rupees for each day during which such failure
continues or five lakh rupees, whichever is higher” by the SEBI (Amendment) Act , 2002, w.e.f. 29-10-2002.
80
continues” by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

82
83 Substituted for “a penalty not exceeding one thousand rupees for each day during which such failure

84
22
specified in the regulations, he shall be liable to 85[a penalty 86[which shall not be less than
one lakh rupees but which may extend to one lakh rupees for each day during which such
failure continues subject to a maximum of one crore rupees]].
Penalty for failure to observe rules and regulations by an asset management company.
15E. Where any asset management company of a mutual fund registered under this Act, fails to
comply with any of the regulations providing for restrictions on the activities of the asset
management companies, such asset management company shall be liable to 87[a penalty 88[which
shall not be less than one lakh rupees but which may extend to one lakh rupees for each day
during which such failure continues subject to a maximum of one crore rupees]].
89[Penalty for default in case of alternative investment funds, infrastructure investment trusts
and real estate investment trusts.
15EA. Where any person fails to comply with the regulations made by the Board in respect of
alternative investment funds, infrastructure investment trusts and real estate investment trusts
or fails to comply with the directions issued by the Board, such person shall be liable to penalty
which shall not be less than one lakh rupees but which may extend to one lakh rupees for each
day during which such failure continues subject to a maximum of one crore rupees or three times
the amount of gains made out of such failure, whichever is higher.
Penalty for default in case of investment adviser and research analyst.

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

15F. If any person, who is registered as a stock broker under this Act,—
(a) fails to issue contract notes in the form and manner specified by the stock exchange of
which such broker is a member, he shall be liable to 90[a penalty which shall not be less
than one lakh rupees but which may extend to 91[one crore rupees]] for which the contract
note was required to be issued by that broker;
85 Substituted for “a penalty not exceeding five lakh rupees for each such failure”, by the SEBI
86
87 Substituted for “a penalty not exceeding five lakh rupees for each such failure”, by the SEBI

88
89
90
Substituted for the words “a penalty not exceeding five times the amount” by the Securities Laws
91
Inserted by the Finance (No.2) Act, 2019 w.e.f. 20-01-2020.
23
(b) fails to deliver any security or fails to make payment of the amount due to the investor in
the manner within the period specified in the regulations, he shall be liable to 92[a penalty
93[which shall not be less than one lakh rupees but which may extend to one lakh rupees
for each day during which 94[such failure continues] subject to a maximum of one crore
rupees]];
(c) charges an amount of brokerage which is in excess of the brokerage specified in the
regulations, he shall be liable to 95[a penalty 96[which shall not be less than one lakh rupees
but which may extend to five times the amount of brokerage]] charged in excess of the
specified brokerage, whichever is higher.
Penalty for insider trading.

15G. If any insider who,—
(i) either on his own behalf or on behalf of any other person, deals in securities of a body
corporate listed on any stock exchange on the basis of any unpublished price-sensitive
information; or
(ii) communicates any unpublished price-sensitive information to any person, with or
without his request for such information except as required in the ordinary course of
business or under any law; or
(iii) counsels, or procures for any other person to deal in any securities of any body corporate
on the basis of unpublished price-sensitive information,
shall be liable to a penalty 97[which shall not be less than ten lakh rupees but which may extend
to twenty-five crore rupees or three times the amount of profits made out of insider trading,
whichever is higher].
Penalty for non-disclosure of acquisition of shares and takeovers.

15H. If any person, who is required under this Act or any rules or regulations made thereunder,
fails to,—
(i) disclose the aggregate of his shareholding in the body corporate before he acquires any
shares of that body corporate; or
(ii) make a public announcement to acquire shares at a minimum price; or
93
94
Substituted for the words "he sponsors or carries on any such collective investment scheme including mutual
funds" by the Finance Act, 2018 w.e.f. 08-03-2019.
95 Substituted for “a penalty not exceeding five thousand rupees” by the SEBI (Amendment) Act, 2002,
w.e.f. 29-10-2002.
96
Substituted for the words “of one lakh rupees or five times the amount of brokerage” by the Securities
Laws (Amendment) Act, 2014, w.e.f. 08-09-2014.
97
Substituted for the words “twenty-five crore rupees or three times the amount of profits made out of such failure,
whichever is higher” by the Securities Laws (Amendment) Act, 2014, w.e.f. 08-09-2014. Prior to substitution,
as substituted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002 it read as under:
“not exceeding five lakh rupees”.
24
98[(iii) make a public offer by sending letter of offer to the shareholders of the concerned
company; or
(iv) make payment of consideration to the shareholders who sold their shares pursuant to
letter of offer,]
he shall be liable to a penalty 99[which shall not be less than ten lakh rupees but which may extend
to twenty-five crore rupees or three times the amount of profits made out of such failure,
100[Penalty for fraudulent and unfair trade practices.

15HA. If any person indulges in fraudulent and unfair trade practices relating to securities, he
shall be liable to a penalty 101[which shall not be less than five lakh rupees but which may extend
to twenty-five crore rupees or three times the amount of profits made out of such practices,
102[Penalty for alteration, destruction, etc., of records and failure to protect the electronic
database of Board.
15HAA. Any person, who—
(a) knowingly alters, destroys, mutilates, conceals, falsifies, or makes a false entry in any
information, record, document (including electronic records), which is required under this
Act or any rules or regulations made thereunder, so as to impede, obstruct, or influence the
investigation, inquiry, audit, inspection or proper administration of any matter within the
jurisdiction of the Board.
Explanation.—For the purposes of this clause, a person shall be deemed to have
altered, concealed or destroyed such information, record or document, in case he
knowingly fails to immediately report the matter to the Board or fails to preserve the same
till such information continues to be relevant to any investigation, inquiry, audit, inspection
or proceeding, which may be initiated by the Board and conclusion thereof;
(b) without being authorised to do so, access or tries to access, or denies of access or
modifies access parameters, to the regulatory data in the database;
(c) without being authorised to do so, downloads, extracts, copies, or reproduces in any
form the regulatory data maintained in the system database;
(d) knowingly introduces any computer virus or other computer contaminant into the
system database and brings out a trading halt;
(e) without authorisation disrupts the functioning of system database;
(f) knowingly damages, destroys, deletes, alters, diminishes in value or utility, or affects by
any means, the regulatory data in the system database; or
(g) knowingly provides any assistance to or causes any other person to do any of the acts
specified in clauses (a) to (f),
98 Inserted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

99Substituted for the words “twenty-five crore rupees or three times the amount of profits made out of such failure,
whichever is higher” by the Securities Laws (Amendment) Act, 2014, w.e.f. 08-09-2014.Prior to substitution, as
substituted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002 it read as under:
“not exceeding five lakh rupees”.
100 Inserted by the SEBI (Amendment) Act, 2002, w.e.f.29-10-2002.
101Substituted for the words “twenty-five crore rupees or three times the amount of profits made out of such
failure, whichever is higher” by the Securities Laws (Amendment) Act, 2014, w.e.f. 08-09-2014.
102
Inserted by the Finance (No. 2) Act, 2019 w.e.f. 20-01-2020.
25
shall be liable to a penalty which shall not be less than one lakh rupees but which may extend to
ten crore rupees or three times the amount of profits made out of such act, whichever is higher.
Explanation.—In this section, the expressions "computer contaminant", "computer virus"
and "damage" shall have the meanings respectively assigned to them undersection 43 of the
Information Technology Act, 2000.]
Penalty for contravention where no separate penalty has been provided.

15HB. Whoever fails to comply with any provision of this Act, the rules or the regulations made
or directions issued by the Board thereunder for which no separate penalty has been provided,
shall be 103[liable to a penalty which shall not be less than one lakh rupees but which may extend
to one crore rupees.]
Power to adjudicate.
15-I. (1) For the purpose of adjudging under sections 15A, 15B, 15C, 15D, 15E, 104[15EA, 15EB,]
15F, 15G 105[,15H, 15HA and 15HB], the Board 106[may] appoint any officer not below the rank of
a Division Chief to be an adjudicating officer for holding an inquiry in the prescribed manner
after giving any person concerned a reasonable opportunity of being heard for the purpose of
imposing any penalty.
(2) While holding an inquiry the adjudicating officer shall have power to summon and enforce
the attendance of any person acquainted with the facts and circumstances of the case to give
evidence or to produce any document which in the opinion of the adjudicating officer, may be
useful for or relevant to the subject-matter of the inquiry and if, on such inquiry, he is satisfied
that the person has failed to comply with the provisions of any of the sections specified in sub-
section (1), he may impose such penalty as he thinks fit in accordance with the provisions of any
of those sections.
107[(3) The Board may call for and examine the record of any proceedings under this section and
if it considers that the order passed by the adjudicating officer is erroneous to the extent it is not
in the interests of the securities market, it may, after making or causing to be made such inquiry
as it deems necessary, pass an order enhancing the quantum of penalty, if the circumstances of
the case so justify:
Provided that no such order shall be passed unless the person concerned has been given an
opportunity of being heard in the matter:
Provided further that nothing contained in this sub-section shall be applicable after an expiry of
a period of three months from the date of the order passed by the adjudicating officer or disposal
of the appeal under section 15T, whichever is earlier.]
108[Factors to be taken into account while adjudging quantum of penalty.]
103Substituted for the words “liable to a penalty which may extend to one crore rupees” by the Securities Laws
104 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.
105 Substituted for “and 15H” by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
106 Substituted for the words " shall" by the Finance Act, 2018 w.e.f. 08-03-2019.
108
Substituted for the words " Factors to be taken into account by the adjudicating officer." by the Finance Act, 2018
w.e.f. 08-03-2019.
26
15J. While adjudging quantum of penalty under 109[15-I or section 11 or section 11B, the Board
or the adjudicating officer] shall have due regard to the following factors, namely :—
(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as
a result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the default;
(c) the repetitive nature of the default.
110[Explanation.—For the removal of doubts, it is clarified that the power 111[…] to
adjudge the quantum of penalty under sections 15A to 15E, clauses (b) and (c) of section
15F, 15G, 15H and 15HA shall be and shall always be deemed to have been exercised
under the provisions of this section.]
112[Crediting sums realised by way of penalties to Consolidated Fund of India.

15JA. All sums realised by way of penalties under this Act shall be credited to the Consolidated
Fund of India.]
113[Settlement of administrative and civil proceedings.

[15JB. (1) Notwithstanding anything contained in any other law for the time being in force, any
person, against whom any proceedings have been initiated or may be initiated under section 11,
section 11B, section 11D, sub-section (3) of section 12 or section 15-I, may file an application in
writing to the Board proposing for settlement of the proceedings initiated or to be initiated for
the alleged defaults.
(2) The Board may, after taking into consideration the nature, gravity and impact of defaults,
agree to the proposal for settlement, on payment of such sum by the defaulter or on such other
terms as may be determined by the Board in accordance with the regulations made under this
Act.
(3) The settlement proceedings under this section shall be conducted in accordance with the
procedure specified in the regulations made under this Act.
(4) No appeal shall lie under section 15T against any order passed by the Board or adjudicating
officer, as the case may be, under this section.]
114[(5)
All settlement amounts, excluding the disgorgement amount and legal costs, realised under
this Act shall be credited to the Consolidated Fund of India.]
CHAPTER VIB
ESTABLISHMENT, JURISDICTION, AUTHORITY AND PROCEDURE OF
115[SECURITIES] APPELLATE TRIBUNAL
109
Substituted for the words "section 15-I, the adjudicating officer" by the Finance Act, 2018 w.e.f. 08-03-2019.
110
Inserted by Part VIII of Chapter VI of the Finance Act, 2017 vide Gazette Notification No. 7, Extraordinary Part
II Section 1 dated March 31, 2017. This shall come into force from April 26, 2017.
111
Omitted the words “of an adjudicating officer " by the Finance Act, 2018 w.e.f. 08-03-2019.
112 Inserted by the SEBI (Amendment) Act, 2002, S.19 w.e.f. 29-10-2002.
114
115
Inserted by Part VIII of Chapter VI of the Finance Act, 2017 vide Gazette Notification No. 7, Extraordinary Prt
27
Establishment of Securities Appellate Tribunals.
116[15K.(1) The Central Government shall, by notification, establish a Tribunal to be known as the
Securities Appellate Tribunal to exercise the jurisdiction, powers and authority conferred on it by
or under this Act or any other law for the time being in force.
(2) The Central Government shall also specify in the notification referred to in sub-section (1), the
matters and places in relation to which the Securities Appellate Tribunal may exercise
jurisdiction.]
117[Composition of Securities Appellate Tribunal.

15L. (1) The Securities Appellate Tribunal shall consist of a Presiding Officer and such number
of Judicial Members and Technical Members as the Central Government may determine, by
notification, to exercise the powers and discharge the functions conferred on the Securities
Appellate Tribunal under this Act or any other law for the time being in force.
(2) Subject to the provisions of this Act,—
(a) the jurisdiction of the Securities Appellate Tribunal may be exercised by Benches thereof;
(b) a Bench may be constituted by the Presiding Officer of the Securities Appellate Tribunal with
two or more Judicial or Technical Members as he may deem fit:
Provided that every Bench constituted shall include at least one Judicial Member and one
Technical Member;
116
Substituted by Part VIII of Chapter VI of the Finance Act, 2017 vide Gazette Notification No. 7, Extraordinary
Prt II Section 1 dated March 31, 2017. This shall come into force from April 26, 2017. Prior to its substitution,
Section 15K read as follows:
‘(1) The Central Government shall by notification, establish one or more Appellate Tribunals to be known as the
Securities Appellate Tribunal to exercise the jurisdiction, powers and authority conferred on such Tribunal by or
under this Act [or any other law for the time being in force].
(2) The Central Government shall also specify in the notification referred to in sub-section (1) the matters and
places in relation to which the Securities Appellate Tribunal may exercise jurisdiction.’
117 Substituted by Part VIII of Chapter VI of the Finance Act, 2017 vide Gazette Notification No. 7,
Extraordinary Prt II Section 1 dated March 31, 2017. This shall come into force from April 26, 2017. Prior
to its substitution, Section 15L read as follows:
“A Securities Appellate Tribunal shall consist of a Presiding Officer and two other members, to be appointed, by
notification, by the Central Government:
Provided that the Securities Appellate Tribunal, consisting of one person only, established before the commencement
of the Securities and Exchange Board of India (Amendment) Act, 2002, shall continue to exercise the jurisdiction,
powers and authority conferred on it by or under this Act or any other law for the time being in force till two other
Members are appointed under this section.”
Section 15 L was earlier substituted for Sections 15L and 15M by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-
2002.
Prior to their substitution, Section 15L and 15M read as under:-
“15-L. Composition of securities Appellate Tribunal. – A Securities Appellate Tribunal shall consist of one person
only (hereinafter referred to as the Presiding Officer of the Securities Appellate Tribunal) to be appointed, by
notification, by the central Government.
15M. Qualifications for appointment as Presiding Officer of the Securities Appellate Tribunal. – A person shall not
be qualified for appointment as the Presiding Officer of a Securities Appellate Tribunal unless he - (a) is, or has been,
or is qualified to be, a Judge of a High Court; or
(b) has been a member of the Indian Legal Service and has held a post in Grade I of that service for at least three years;
or
(c) has held office as the Presiding Officer of a tribunal for at least three years.”
28
(c) the Benches of the Securities Appellate Tribunal shall ordinarily sit at Mumbai and may also
sit at such other places as the Central Government may, in consultation with the Presiding Officer,
notify.
(3) Notwithstanding anything contained in sub-section (2), the Presiding Officer may transfer a
Judicial Member or a Technical Member of the Securities Appellate Tribunal from one Bench to
another Bench.]
Qualification for appointment as Presiding Officer or Member of Securities Appellate

Tribunal.
15M. 118[ A person shall not be qualified for appointment as the Presiding Officer or a Judicial
Member or a Technical Member of the Securities Appellate Tribunal, unless he—
(a) is, or has been, a Judge of the Supreme Court or a Chief Justice of a High Court or a Judge
of High Court for at least seven years, in the case of the Presiding Officer; and
(b) is, or has been, a Judge of High Court for at least five years, in the case of a Judicial
Member; or
(c) in the case of a Technical Member––
(i) is, or has been, a Secretary or an Additional Secretary in the Ministry or Department of
the Central Government or any equivalent post in the Central Government or a State
Government; or
(ii) is a person of proven ability, integrity and standing having special knowledge and
professional experience, of not less than fifteen years, in financial sector including
securities market or pension funds or commodity derivatives or insurance.]
118 Substituted by Part VIII of Chapter VI of the Finance Act, 2017 vide Gazette Notification No. 7,
to its substitution, Section 15M read as follows: (1) A person shall not be qualified for appointment as the
Presiding Officer of the Securities Appellate Tribunal unless he -
(a) is a sitting or retired Judge of the Supreme Court or a sitting or retired Chief Justice of a High Court; or
(b) is a sitting or retired Judge of a High Court who has completed not less than seven years of service as a Judge in a
High Court.
(1A) The Presiding Officer of the Securities Appellate Tribunal shall be appointed by the Central Government in
consultation with the Chief Justice of India or his nominee.]
(2) A person shall not be qualified for appointment as member of a Securities Appellate Tribunal unless he is a person
of ability, integrity and standing who has shown capacity in dealing with problems relating to securities market and
has qualification and experience of corporate law, securities laws, finance, economics or accountancy:
Provided that a member of the Board or any person holding a post at senior management level equivalent to Executive
Director in the Board shall not be appointed as Presiding Officer or Member of a Securities Appellate Tribunal during
his service or tenure as such with the Board or within two years from the date on which he ceases to hold office as such
in the Board.
Section 15 L was earlier substituted for sub-section (1) of Section 15M by the SEBI (Amendment) Act, 2013 (Act No.
22 of 2013) w.r.e.f. 21.01.2013. Prior to substitution, it read as under:-
"(1) A person shall not be qualified for appointment as the Presiding Officer of a Securities Appellate Tribunal unless
he is a sitting or retired Judge of the Supreme Court or a sitting or retired Chief Justice of a High Court :
Provided that the Presiding Officer of the Securities Appellate Tribunal shall be appointed by the Central Government
in consultation with the Chief Justice of India or his nominee."
29
119[15MA.The Presiding Officer and Judicial Members of the Securities Appellate Tribunal shall
be appointed by the Central Government in consultation with the Chief Justice of India or his
nominee.
15MB. (1) The Technical Members of the Securities Appellate Tribunal shall be appointed by the
Central Government on the recommendation of a Search-cum-Selection Committee consisting of
the following, namely:––
(a) Presiding Officer, Securities Appellate Tribunal—Chairperson;
(b) Secretary, Department of Economic Affairs—Member;
(c) Secretary, Department of Financial Services—Member; and
(d) Secretary, Legislative Department or Secretary, Department of Legal Affairs—Member.
(2) The Secretary, Department of Economic Affairs shall be the Convener of the Search-cum-
Selection Committee.
(3) The Search-cum-Selection Committee shall determine its procedure for recommending the
names of persons to be appointed under sub-section (1).
15MC. (1) No appointment of the Presiding Officer, a Judicial Member or a Technical Member of
the Securities Appellate Tribunal shall be invalid merely by reason of any vacancy or any defect
in the constitution of the Searchcum- Selection Committee.
(2) A member or part time member of the Board or the Insurance Regulatory and Development
Authority or the Pension Fund Regulatory and Development Authority, or any person at senior
management level equivalent to the Executive Director in the Board or in such Authorities, shall
not be appointed as Presiding Officer or Member of the Securities Appellate Tribunal, during his
service or tenure as such with the Board or with such Authorities, as the case may be, or within
two years from the date on which he ceases to hold office as such in the Board or in such
Authorities.
(3) The Presiding Officer or such other member of the Securities Appellate Tribunal, holding
office on the date of commencement of Part VIII of Chapter VI of the Finance Act, 2017 shall
continue to hold office for such term as he was appointed and the other provisions of this Act
shall apply to such Presiding Officer or such other member, as if Part VIII of Chapter VI of the
Finance Act, 2017 had not been enacted.]
120[Tenure of office of Presiding Officer and other Members of Securities Appellate Tribunal.
15N. The Presiding Officer or every Judicial or Technical Member of the Securities Appellate
Tribunal shall hold office for a term of five years from the date on which he enters upon his office,
and shall be eligible for reappointment for another term of maximum five years:
119
120Substituted by Part VIII of Chapter VI of the Finance Act, 2017 vide Gazette Notification No. 7,
to its substitution, Section 15N read as follows: “The Presiding Officer and every other Member of a Securities
Appellate Tribunal shall hold office for a term of five years from the date on which he enters upon his office and shall
be eligible for re-appointment:
Provided that no person shall hold office as the Presiding Officer of the Securities Appellate Tribunal after he has
attained the age of sixty-eight years:
30
Provided that no Presiding Officer or the Judicial or Technical Member shall hold office after he
has attained the age of seventy years.]
Salary and allowances and other terms and conditions of service of Presiding Officers.
15-O. The salary and allowances payable to and the other terms and conditions of service
including pension, gratuity and other retirement benefits of the 121[Presiding Officer and other
Members] of a Securities Appellate Tribunal shall be such as may be prescribed:
Provided that neither the salary and allowances nor the other terms and conditions of service of
the 122[Presiding Officer and other Members of a Securities Appellate Tribunal] shall be varied to
their disadvantage after appointment.
Filling up of vacancies.
15P. If, for reason other than temporary absence, any vacancy occurs in the 123[office of the
Presiding Officer or any other Member] of a Securities Appellate Tribunal, then the Central
Government shall appoint another person in accordance with the provisions of this Act to fill the
vacancy and the proceedings may be continued before the Securities Appellate Tribunal from the
stage at which the vacancy is filled.
124[15PA. In the event of occurrence of any vacancy in the office of the Presiding Officer of the
Securities Appellate Tribunal by reason of his death, resignation or otherwise, the senior-most
Judicial Member of the Securities Appellate Tribunal shall act as the Presiding Officer until the
date on which a new Presiding Officer is appointed in accordance with the provisions of this Act.]
Resignation and removal.

15Q. (1) The 125[Presiding Officer or any other Member] of a Securities Appellate Tribunal may,
by notice in writing under his hand addressed to the Central Government, resign his office:
Provided that 126[the Presiding Officer or any other Member] shall, unless he is permitted by the
Central Government to relinquish his office sooner, continue to hold office, until the expiry of
three months from the date of receipt of such notice or until a person duly appointed as his
successor enters upon his office or until the expiry of his term of office, whichever is the earliest.
Provided further that no person shall hold office as a Member of the Securities Appellate Tribunal after he has attained
the age of sixty-two years.”
Section 15 N was earlier Substituted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002. Prior to their
substitution, Section 15N read as under:-
“15N. Term of office.- The Presiding officer of a Securities Appellate Tribunal shall hold office for a term of five years
from the date on which he enters upon his office or until he attains the age of sixty-five years, whichever is earlier.”
121 Substituted for “Presiding Officer of a Securities Appellate Tribunal” by the SEBI (Amendment) Act
2002, w.e.f. 29-10-2002.

122 Substituted for “Presiding Officer”, by the SEBI (Amendment) Act 2002, w.e.f. 29-10-2002.
123 Substituted for “said Presiding Officer”, by the SEBI (Amendment) Act 2002, w.e.f. 29-10-2002.
124
126 Substituted for “said Presiding Officer”, by the SEBI (Amendment) Act 2002, w.e.f. 29-10-2002.
31
(2) 127[ The Central Government may, after an inquiry made by the Judge of the Supreme Court,
remove the Presiding Officer or Judicial Member or Technical Member of the Securities Appellate
Tribunal, if he—
(a) is, or at any time has been adjudged as an insolvent;
(b) has become physically or mentally incapable of acting as the Presiding Officer, Judicial or
Technical Member;
(c) has been convicted of any offence which, in the opinion of the Central Government,
involves moral turpitude;
(d) has, in the opinion of the Central Government, so abused his position as to render his
continuation in office detrimental to the public interest; or
(e) has acquired such financial interest or other interest as is likely to affect prejudicially his
functions as the Presiding Officer or Judicial or Technical Member:
Provided that he shall not be removed from office under clauses (d) and (e), unless he has been
given a reasonable opportunity of being heard in the matter.]
(3) The Central Government may, by rules, regulate the procedure for the investigation of
misbehavior or incapacity of the 128[Presiding Officer or any other Member].
129[15QA. Notwithstanding anything contained in this Act, the qualifications, appointment, term
of office, salaries and allowances, resignation, removal and the other terms and conditions of
service of the Presiding Officer and other Members of the Appellate Tribunal appointed after the
commencement of Part XIV of Chapter VI of the Finance Act, 2017, shall be governed by the
provisions of section 184 of that Act:
Provided that the Presiding Officer and Member appointed before the commencement of Part
XIV of Chapter VI of the Finance Act, 2017, shall continue to be governed by the provisions of
this Act and the rules made thereunder as if the provisions of section 184 of the Finance Act, 2017
had not come into force.]
Orders constituting Appellate Tribunal to be final and not to invalidate its proceedings.
15R. No order of the Central Government appointing any person as the 130[Presiding Officer or a
Member] of a Securities Appellate Tribunal shall be called in question in any manner, and no act
or proceeding before a Securities Appellate Tribunal shall be called in question in any manner on
the ground merely of any defect in the constitution of a Securities Appellate Tribunal.
127
Substituted for “The 127[Presiding Officer or any other Member] of a Securities Appellate
Tribunal shall not be removed from his office except by an order by the Central Government on
the ground of proved misbehaviour or incapacity after an inquiry made by a Judge of the
Supreme Court, in which the 127[Presiding Officer or any other Member] concerned has been
informed of the charges against him and given a reasonable opportunity of being heard in
respect of these charges.” by Part VIII of Chapter VI of the Finance Act, 2017 vide Gazette Notification No. 7,
Extraordinary Prt II Section 1 dated March 31, 2017. This shall come into force from April 26, 2017.
128 Substituted for “aforesaid Presiding Officer”, by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
129
Inserted by Part N of Chapter XIV of the Finance Act, 2017 vide Gazette Notification No. 7, Extraordinary Prt II
Section 1 dated March 31, 2017 This shall come into force from date as appointed by Central Government.
32
Staff of the Securities Appellate Tribunal.
15S. (1) The Central Government shall provide the Securities Appellate Tribunal with such
officers and employees as that Government may think fit.
(2) The officers and employees of the Securities Appellate Tribunal shall discharge their functions
under general superintendence of the Presiding Officer.
(3) The salaries and allowances and other conditions of service of the officers and employees of
the Securities Appellate Tribunal shall be such as may be prescribed.
Appeal to the Securities Appellate Tribunal.

15T. 131[(1) Save as provided in sub-section (2), any person aggrieved,—
(a) by an order of the Board made, on and after the commencement of the Securities Laws
(Second Amendment) Act, 1999, under this Act, or the rules or regulations made
thereunder; or
(b) by an order made by an adjudicating officer under this Act132[; or],
133[“(c)by an order of the Insurance Regulatory and Development Authority or the Pension
Fund Regulatory and Development Authority,]
may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter.
134[(2) ********]
(3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the
date on which a copy of the order made by the 135[Board or the Adjudicating Officer 136[or the
Insurance Regulatory and Development Authority or the Pension Fund Regulatory and
Development Authority], as the case may be,] is received by him and it shall be in such form and
be accompanied by such fee as may be prescribed :
131 Substituted for Sub-sec (1) & (2) by the SEBI (Amendment) Act 1999, w.e.f. 16-12-1999. Prior to their
substitution, Sub-sections (1) & (2) were read as under:
“(1) Save as provided in sub-section (2), any person aggrieved by any order made by any Adjudicating
Officer under this Act, may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the
matter.
(2) No appeal shall lie to the Securities Appellate Tribunal from an order made by an Adjudicating Officer
with the consent of the parties.”
132
II Section 1 dated March 31, 2017 This shall come into force from April 26, 2017.
133
134 Omitted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013. Prior to omission, sub-
section (2) read as under:

“(2) No appeal shall lie to the Securities Appellate Tribunal from an order made—
(a) by the Board on and after the commencement of the Securities Laws (Second Amendment) Act,
1999;
(b) by an adjudicating officer,
with the consent of the parties.”
135 Substituted for “a copy of the order made by the adjudicating officer” by SEBI (Amendment) Act 1999,
w.e.f. 16-12-1999.
136
33
Provided that the Securities Appellate Tribunal may entertain an appeal after the expiry of the
said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within
that period.
(4) On receipt of an appeal under sub-section (1), the Securities Appellate Tribunal may, after
giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it
thinks fit, confirming, modifying or setting aside the order appealed against.
(5) The Securities Appellate Tribunal shall send a copy of every order made by it to the 137[Board,
138[or the Insurance Regulatory and Development Authority or the Pension Fund Regulatory and
Development Authority, as the case may be] the] parties to the appeal and to the concerned
Adjudicating Officer.
(6) The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall be dealt
with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal
finally within six months from the date of receipt of the appeal.
Procedure and powers of the Securities Appellate Tribunal.

15U. (1) The Securities Appellate Tribunal shall not be bound by the procedure laid down by the
Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice
and, subject to the other provisions of this Act, and of any rules, the Securities Appellate Tribunal
shall have powers to regulate their own procedure including the places at which they shall have
their sittings.
(2) The Securities Appellate Tribunal shall have, for the purposes of discharging their functions
under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure,
1908 (5 of 1908), while trying a suit, in respect of the following matters, namely :—
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses or documents;
(e) reviewing its decisions;
(f) dismissing an application for default or deciding it ex parte ;
(g) setting aside any order of dismissal of any application for default or any order passed by
it ex parte ;
(h) any other matter which may be prescribed.
(3) Every proceeding before the Securities Appellate Tribunal shall be deemed to be a judicial
proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the
Indian Penal Code (45 of 1860), and the Securities Appellate Tribunal shall be deemed to be a civil
court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure,
1973 (2 of 1974).
137 Substituted for “parties”, SEBI (Amendment) Act 1999, w.e.f. 16-12-1999.
138
34
139[(4)
Where Benches are constituted, the Presiding Officer of the Securities Appellate Tribunal
may, from time to time make provisions as to the distribution of the business of the Securities
Appellate Tribunal amongst the Benches and also provide for the matters which may be dealt
with, by each Bench.
(5) On the application of any of the parties and after notice to the parties, and after hearing such
of them as he may desire to be heard, or on his own motion without such notice, the Presiding
Officer of the Securities Appellate Tribunal may transfer any case pending before one Bench, for
disposal, to any other Bench.
(6) If a Bench of the Securities Appellate Tribunal consisting of two members differ in opinion on
any point, they shall state the point or points on which they differ, and make a reference to the
Presiding Officer of the Securities Appellate Tribunal who shall either hear the point or points
himself or refer the case for hearing only on such point or points by one or more of the other
members of the Securities Appellate Tribunal and such point or points shall be decided according
to the opinion of the majority of the members of the Securities Appellate Tribunal who have heard
the case, including those who first heard it.]
140[Right to legal representation.

15V. The appellant may either appear in person or authorise one or more chartered accountants
or company secretaries or cost accountants or legal practitioners or any of its officers to present
his or its case before the Securities Appellate Tribunal.
Explanation.—For the purposes of this section,—
(a) “chartered accountant” means a chartered accountant as defined in clause (b) of sub-
section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has
obtained a certificate of practice under sub-section (1) of section 6 of that Act;
(b) “company secretary” means a company secretary as defined in clause (c) of sub-section
(1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a
certificate of practice under sub-section (1) of section 6 of that Act;
(c) “cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of
section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained
a certificate of practice under sub-section (1) of section 6 of that Act;
(d) “legal practitioner” means an advocate, vakil or any attorney of any High Court, and
includes a pleader in practice.]
Limitation.
15W. The provisions of the Limitation Act, 1963 (36 of 1963), shall, as far as may be, apply to an
appeal made to a Securities Appellate Tribunal.
139
140 Substituted for S. 15V by the SEBI (Amendment) Act 1999, w.e.f. 16-12-1999. Prior to their substitution,
S. 15V read as under:-

“15V. The appellant may either appear in person or authorise one or more legal practitioners or any of its
officers to present his or its case before the Securities Appellate Tribunal.”
35
141[Presiding Officer, Members and staff of Securities Appellate Tribunals to be public
servants.
15X. The Presiding Officer, Members and other officers and employees of a Securities Appellate
Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian
Penal Code (45 of 1860).]
Civil Court not to have jurisdiction.

15Y. No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any
matter which an adjudicating officer appointed under this Act or a Securities Appellate Tribunal
constituted under this Act is empowered by or under this Act to determine and no injunction
shall be granted by any court or other authority in respect of any action taken or to be taken in
pursuance of any power conferred by or under this Act.
142[Appeal to Supreme Court.

15Z. Any person aggrieved by any decision or order of the Securities Appellate Tribunal may file
an appeal to the Supreme Court within sixty days from the date of communication of the decision
or order of the Securities Appellate Tribunal to him on any question of law arising out of such
order :
Provided that the Supreme Court may, if it is satisfied that the applicant was prevented by
sufficient cause from filing the appeal within the said period, allow it to be filed within a further
period not exceeding sixty days.]
CHAPTER VII
MISCELLANEOUS
Power of Central Government to issue directions.

16. (1) Without prejudice to the foregoing provisions of this Act 143[or the Depositories Act, 1996],
the Board shall, in exercise of its powers or the performance of its functions under this Act, be
141 Substituted for S. 15X by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002. Prior to its substitution, it
read as under: -
“15X. The Presiding Officer and other officers and employees of a Securities Appellate Tribunal shall be
deemed to be public servants within the meaning of section 21 of the Indian penal Code( 45 of 1860)”.
142 Substituted for section15Z by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002. Prior to its substitution,
it read as under:-
“15Z. Appeal to High Court.- Any person aggrieved by any decision or order of the Securities Appellate
Tribunal may file an appeal to the High Court within sixty days from the date of communication of the
decision or order of the Securities Appellate Tribunal to him on any question of fact or law arising out of
such order:
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause
from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty
days.”
143 Substituted for “this Act” by the Depositories Act 1996, w.r.e.f. 20-9-1995.
36
bound by such directions on questions of policy as the Central Government may give in writing
to it from time to time :
Provided that the Board shall, as far as practicable, be given an opportunity to express its views
before any direction is given under this sub-section.
(2) The decision of the Central Government whether a question is one of policy or not shall be
final.
Power of Central Government to supersede the Board.

17. (1) If at any time the Central Government is of opinion—
(a) that on account of grave emergency, the Board is unable to discharge the functions and
duties imposed on it by or under the provisions of this Act; or
(b) that the Board has persistently made default in complying with any direction issued by
the Central Government under this Act or in the discharge of the functions and duties
imposed on it by or under the provisions of this Act and as a result of such default the
financial position of the Board or the administration of the Board has deteriorated; or
(c) that circumstances exist which render it necessary in the public interest so to do,
the Central Government may, by notification, supersede the Board for such period, not exceeding
six months, as may be specified in the notification.
(2) Upon the publication of a notification under sub-section (1) superseding the Board,—
(a) all the members shall, as from the date of supersession, vacate their offices as such;
(b) all the powers, functions and duties which may, by or under the provisions of this Act, be
exercised or discharged by or on behalf of the Board, shall until the Board is reconstituted
under sub-section (3), be exercised and discharged by such person or persons as the
Central Government may direct; and
(c) all property owned or controlled by the Board shall, until the Board is reconstituted under
sub-section (3), vest in the Central Government.
(3) On the expiration of the period of supersession specified in the notification issued under sub-
section (1), the Central Government may reconstitute the Board by a fresh appointment and in
such case any person or persons who vacated their offices under clause (a) of sub-section (2), shall
not be deemed disqualified for appointment :
Provided that the Central Government may, at any time, before the expiration of the period of
supersession, take action under this sub-section.
(4) The Central Government shall cause a notification issued under sub-section (1) and a full
report of any action taken under this section and the circumstances leading to such action to be
laid before each House of Parliament at the earliest.
Returns and reports.

18. (1) The Board shall furnish to the Central Government at such time and in such form and
manner as may be prescribed or as the Central Government may direct, such returns and
statements and such particulars in regard to any proposed or existing programme for the
promotion and development of the securities market, as the Central Government may, from time
to time, require.
37
(2) Without prejudice to the provisions of sub-section (1), the Board shall, within 144[ninety] days
after the end of each financial year, submit to the Central Government a report in such form, as
may be prescribed, giving a true and full account of its activities, policy and programmes during
the previous financial year.
(3) A copy of the report received under sub-section (2) shall be laid, as soon as may be after it is
received, before each House of Parliament.
Delegation.
19. The Board may, by general or special order in writing delegate to any member, officer of the
Board or any other person subject to such conditions, if any, as may be specified in the order, such
of its powers and functions under this Act (except the powers under section 29) as it may deem
necessary.
Appeals.
20. (1) Any person aggrieved by an order of the Board made 145[, before the commencement of
the Securities Laws (Second Amendment) Act, 1999,] under this Act, or the rules or regulations
made thereunder may prefer an appeal to the Central Government within such time as may be
prescribed.
(2) No appeal shall be admitted if it is preferred after the expiry of the period prescribed therefor:
Provided that an appeal may be admitted after the expiry of the period prescribed therefor if the
appellant satisfies the Central Government that he had sufficient cause for not preferring the
appeal within the prescribed period.
(3) Every appeal made under this section shall be made in such form and shall be accompanied
by a copy of the order appealed against and by such fees as may be prescribed.
(4) The procedure for disposing of an appeal shall be such as may be prescribed:
Provided that before disposing of an appeal, the appellant shall be given a reasonable opportunity
of being heard.
146[Bar of jurisdiction.
20A. No order passed by the Board 147[or the Adjudicating Officer] under this Act shall be
appealable except as provided in 148[section 15T or] section 20 and no civil court shall have
jurisdiction in respect of any matter which the Board 149[or the Adjudicating Officer] is
empowered by, or under, this Act to pass any order and no injunction shall be granted by any
court or other authority in respect of any action taken or to be taken in pursuance of any order
passed by the Board 150[or the Adjudicating Officer] by, or under, this Act.]
144 Substituted for “sixty days” by Securities Laws (Amendment) Act 1995, w.e.f. 25-1-1995.
145 Substituted for “an order of the Board made” by Securities Laws (Second Amendment) Act 1999, w.e.f.
16-12-1999.
147 Substituted for “Board” by the SEBI (Amendment) Act 1999, w.e.f. 16-12-1999.
148 Substituted for “Section 20”, by the SEBI (Amendment) Act 1999, w.e.f. 16-12-1999.
149 Substituted for “Board”, by the SEBI (Amendment) Act 1999, w.e.f. 16-12-1999.
150 Substituted for “Board”, by the SEBI (Amendment) Act 1999, w.e.f. 16-12-1999.
38
Savings.
21. Nothing in this Act shall exempt any person from any suit or other proceedings which might,
apart from this Act, be brought against him.
Members, officers and employees of the Board to be public servants.

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

23. No suit, prosecution or other legal proceedings shall lie against the Central Government 151[or
Board] or any officer of the Central Government or any member, officer or other employee of the
Board for anything which is in good faith done or intended to be done under this Act or the rules
or regulations made thereunder.
152[Offences.
24. (1) Without prejudice to any award of penalty by the adjudicating officer 153[or the Board]
under this Act, if any person contravenes or attempts to contravene or abets the contravention of
the provisions of this Act or of any rules or regulations made thereunder, he shall be punishable
with imprisonment for a term which may extend to 154[ten years, or with fine, which may extend
to twenty-five crore rupees or with both].
(2) If any person fails to pay the penalty imposed by the adjudicating officer 155[or the Board] or
fails to comply with any 156[***] directions or orders, he shall be punishable with imprisonment
for a term which shall not be less than one month but which may extend to 157[ten years, or with
fine, which may extend to twenty-five crore rupees or with both].
158[Composition of certain offences.

24A. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),
any offence punishable under this Act, not being an offence punishable with imprisonment only,
or with imprisonment and also with fine, may either before or after the institution of any
152 Substituted by for section 24 by the Securities Laws (Amendment) Act 1995, w.e.f. 25-1-1995. Prior to its
substitution section 24 read as under:
“24. Penalty.- Whoever 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.”
153
154 Substituted for “one year, or with fine, or with both” by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-
2002.
155
156
Omitted the words "of his " by the Finance Act, 2018 w.e.f. 08-03-2019
157 Substituted for “three years or with fine which shall not be less than two thousand rupees but which
may extend to ten thousand rupees or with both” by the SEBI (Amendment) Act, 2002 w.e.f. 29-10-2002, for
“three years or with fine which shall not be less than two thousand rupees but which may extend to ten
thousand rupees or with both”.
158 Inserted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
39
proceeding, be compounded by a Securities Appellate Tribunal or a court before which such
proceedings are pending.
Power to grant immunity.

24B. (1) The Central Government may, on recommendation by the Board, if the Central
Government is satisfied, that any person, who is alleged to have violated any of the provisions of
this Act or the rules or the regulations made thereunder, has made a full and true disclosure in
respect of the alleged violation, grant to such person, subject to such conditions as it may think
fit to impose, immunity from prosecution for any offence under this Act, or the rules or the
regulations made thereunder or also from the imposition of any penalty under this Act with
respect to the alleged violation:
Provided that no such immunity shall be granted by the Central Government in cases where the
proceedings for the prosecution for any such offence have been instituted before the date of
receipt of application for grant of such immunity:
Provided further that recommendation of the Board under this sub-section shall not be binding
upon the Central Government.
(2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by
the Central Government, if it is satisfied that such person had, in the course of the proceedings,
not complied with the condition on which the immunity was granted or had given false evidence,
and thereupon such person may be tried for the offence with respect to which the immunity was
granted or for any other offence of which he appears to have been guilty in connection with the
contravention and shall also become liable to the imposition of any penalty under this Act to
which such person would have been liable, had not such immunity been granted.]
Exemption from tax on wealth and income.

25. Notwithstanding anything contained in the Wealth-tax Act, 1957 (27 of 1957), the Income-tax
Act, 1961 (43 of 1961) or any other enactment for the time being in force relating to tax on wealth,
income, profits or gains—
(a) the Board;
(b) the existing Securities and Exchange Board from the date of its constitution to the date of
establishment of the Board,
shall not be liable to pay wealth-tax, income-tax or any other tax in respect of their wealth, income,
profits or gains derived.
Cognizance of offences by courts.

26. (1) No court shall take cognizance of any offence punishable under this Act or any rules or
regulations made thereunder, save on a complaint made by the Board 159[* * *].
160[(2) *****]
159 The words “with the previous sanction of the Central Government” omitted by Securities Laws
(Amendment) Act 1995, w.e.f. 25-1-1995.
160 Omitted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013. Prior to the omission, sub-
section (2) read as under:

“(2) No court inferior to that of a Court of Session shall try any offence punishable under this Act.”
40
161[ Establishment of Special Courts.
26A. (1) The Central Government may, for the purpose of providing speedy trial of offences under
this Act, by notification, establish or designate as many Special Courts as may be necessary.
(2) A Special Court shall consist of a single judge who shall be appointed by the Central
Government with the concurrence of the Chief Justice of the High Court within whose jurisdiction
the judge to be appointed is working.
(3) A person shall not be qualified for appointment as a judge of a Special Court unless he is,
immediately before such appointment, holding the office of a Sessions Judge or an Additional
Sessions Judge, as the case may be.
Offences triable by Special Courts.

26B. Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences
under this Act committed prior to the date of commencement of the Securities Laws
(Amendment) Act, 2014 or on or after the date of such commencement, shall be taken cognizance
of and tried by the Special Court established for the area in which the offence is committed or
where there are more Special Courts than one for such area, by such one of them as may be
specified in this behalf by the High Court concerned.
Appeal and revision.

26C. The High Court may exercise, so far as may be applicable, all the powers conferred by
Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 on a High Court, as if a Special
Court within the local limits of the jurisdiction of the High Court were a Court of Session trying
cases within the local limits of the jurisdiction of the High Court.
Application of Code to proceedings before Special Court.

26D. (1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure,
1973 shall apply to the proceedings before a Special Court and for the purposes of the said
provisions, the Special Court shall be deemed to be a Court of Session and the person conducting
prosecution before a Special Court shall be deemed to be a Public Prosecutor within the meaning
of clause (u) of section 2 of the Code of Criminal Procedure, 1973.
(2) The person conducting prosecution referred to in sub-section (1) should have been in practice
as an advocate for not less than seven years or should have held a post, for a period of not less
than seven years, under the Union or a State, requiring special knowledge of law.
Transitional provisions.
26E. Any offence committed under this Act, which is triable by a Special Court shall, until a
Special Court is established, be taken cognizance of and tried by a Court of Session exercising
jurisdiction over the area, notwithstanding anything contained in the Code of Criminal
Procedure, 1973:
Provided that nothing contained in this section shall affect the powers of the High Court under
section 407 of the Code of Criminal Procedure, 1973 to transfer any case or class of cases taken
cognizance by a Court of Session under this section.]
41
162[Contravention by companies.]
27. (1) Where 163[a contravention of any of the provisions of this Act or any rule, regulation,
direction or order made thereunder] has been committed by a company, every person who at the
time the 164[contravention] was committed was in charge of, and was responsible to, the company
for the conduct of the business of the company, as well as the company, shall be deemed to be
guilty of the 165[contravention] and shall be liable to be proceeded against and punished
accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any
punishment provided in this Act, if he proves that the 166[contravention] was committed without
his knowledge or that he had exercised all due diligence to prevent the commission of such
167[contravention].
(2) Notwithstanding anything contained in sub-section (1), where an 168[contravention] under this
Act has been committed by a company and it is proved that the 169[contravention] has been
committed with the consent or connivance of, or is attributable to any neglect on the part of, any
director, manager, secretary or other officer of the company, such director, manager, secretary or
other officer shall also be deemed to be guilty of the 170[contravention] and shall be liable to be
proceeded against and punished accordingly.
Explanation : For the purposes of this section,—
(a) “company” means any body corporate and includes a firm or other association of
individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.
Power to exempt.
28. 171[***]
172[ Recovery of amounts.

28A. (1) If a person fails to pay the penalty imposed 173[under this Act] or fails to comply with any
direction of the Board for refund of monies or fails to comply with a direction of disgorgement
order issued under section 11B or fails to pay any fees due to the Board, the Recovery Officer may
draw up under his signature a statement in the specified form specifying the amount due from
162
Substituted for the words "Offences by companies." by the Finance Act, 2018 w.e.f. 08-03-2019.
163
Substituted for the words "an offence under this Act" by the Finance Act, 2018 w.e.f. 08-03-2019.
164
Substituted for the word "offence" by the Finance Act, 2018 w.e.f. 08-03-2019.
165
166
167
168
169
170
171 Omitted by the Securities Laws (Amendment) Act, 1995, w.e.f. 25-1-1995. Prior to its omission, Section 28 read
as under:
“28. Power to exempt- If the central government if of the opinion that it is necessary or expedient so to do in public
interest, it may, by order published in the Official gazette, exempt any person or class of persons buying or selling
securities or otherwise dealing with the securities market from the operation of sub-section 91) of Section 12.”
173
Substituted for the words "by the adjudicating officer" by the Finance Act, 2018 w.e.f. 08-03-2019.
42
the person (such statement being hereafter in this Chapter referred to as certificate) and shall
proceed to recover from such person the amount specified in the certificate by one or more of the
following modes, namely:—
(a) attachment and sale of the person's movable property;
(b) attachment of the person's bank accounts;
(c) attachment and sale of the person's immovable property;
(d) arrest of the person and his detention in prison;
(e) appointing a receiver for the management of the person's movable and immovable
properties,
and for this purpose, the provisions of sections 220 to 227, 228A, 229, 232, the Second and Third
Schedules to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962,
as in force from time to time, in so far as may be, apply with necessary modifications as if the said
provisions and the rules made thereunder were the provisions of this Act and referred to the
amount due under this Act instead of to income-tax under the Income-tax Act, 1961.
Explanation 1.— For the purposes of this sub-section, the person's movable or immovable
property or monies held in bank accounts shall include any property or monies held in bank
accounts which has been transferred directly or indirectly on or after the date when the amount
specified in certificate had become due, by the person to his spouse or minor child or son's wife
or son's minor child, otherwise than for adequate consideration, and which is held by, or stands
in the name of, any of the persons aforesaid; and so far as the movable or immovable property or
monies held in bank accounts so transferred to his minor child or his son's minor child is
concerned, it shall, even after the date of attainment of majority by such minor child or son's
minor child, as the case may be, continue to be included in the person's movable or immovable
property or monies held in bank accounts for recovering any amount due from the person under
this Act.
Explanation 2.— Any reference under the provisions of the Second and Third Schedules to
the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962 to the assessee
shall be construed as a reference to the person specified in the certificate.
Explanation 3.— Any reference to appeal in Chapter XVIID and the Second Schedule to the
Income-tax Act, 1961, shall be construed as a reference to appeal before the Securities Appellate
Tribunal under section 15T of this Act.
174[Explanation
4.— The interest referred to in section 220 of the Income-tax Act, 1961 shall
commence from the date the amount became payable by the person]
(2) The Recovery Officer shall be empowered to seek the assistance of the local district
administration while exercising the powers under sub-section (1).
(3) Notwithstanding anything contained in any other law for the time being in force, the recovery
of amounts by a Recovery Officer under sub-section (1), pursuant to non-compliance with any
direction issued by the Board under section 11B, shall have precedence over any other claim
against such person.
Inserted by the Banning of Unregulated Deposit Schemes Ordinance, 2019 [No. 7 of 2019] w.e.f 21-2-
174
2019.
43
(4) For the purposes of sub-sections (1), (2) and (3), the expression ‘‘Recovery Officer’’ means any
officer of the Board who may be authorised, by general or special order in writing, to exercise the
powers of a Recovery Officer.]
175[Continuance of proceedings.
28B. (1) Where a person dies, his legal representative shall be liable to pay any sum which the
deceased would have been liable to pay, if he had not died, in the like manner and to the same
extent as the deceased:
Provided that, in case of any penalty payable under this Act, a legal representative shall
be liable only in case the penalty has been imposed before the death of the deceased person.
(2) For the purposes of sub-section (1),—
(a) any proceeding for disgorgement, refund or an action for recovery before the Recovery
Officer under this Act, except a proceeding for levy of penalty, initiated against the deceased
before his death, shall be deemed to have been initiated against the legal representative, and may
be continued against the legal representative from the stage at which it stood on the date of the
death of the deceased and all the provisions of this Act shall apply accordingly;
(b) any proceeding for disgorgement, refund or an action for recovery before the Recovery
Officer under this Act, except a proceeding for levy of penalty, which could have been initiated
against the deceased if he had survived, may be initiated against the legal representative and all
the provisions of this Act shall apply accordingly.
(3) Every legal representative shall be personally liable for any sum payable by him in his capacity
as legal representative if, while his liability for such sum remains undischarged, he creates a
charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or
may come into, his possession, but such liability shall be limited to the value of the asset so
charged, disposed of or parted with.
(4) The liability of a legal representative under this section shall be limited to the extent to which
the estate of the deceased is capable of meeting the liability.
Explanation.—For the purposes of this section “legal representative” means a person who
in law represents the estate of a deceased person, and includes any person who intermeddles
with the estate of the deceased and where a party sues or is sued in a representative character,
the person on whom the estate devolves on the death of the party so suing or sued.]
Power to make rules.

29. (1) The Central Government may, by notification, make rules for carrying out the purposes of
this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may
provide for all or any of the following matters, namely :—
(a) the term of office and other conditions of service of the Chairman and the members under
sub-section (1) of section 5;
(b) the additional functions that may be performed by the Board under section 11;
175
44
(c) 176[* * *]
(d) the manner in which the accounts of the Board shall be maintained under section 15;
177[(da) the manner of inquiry under sub-section (1) of section 15-I;
(db) the salaries and allowances and other terms and conditions of service of the 178[Presiding
Officers, Members] and other officers and employees of the Securities Appellate Tribunal
under section 15-O and sub-section (3) of section 15S;
(dc) the procedure for the investigation of misbehaviour or incapacity of the 179[Presiding
Officers, or other Members] of the Securities Appellate Tribunal under sub-section (3) of
section 15Q;
(dd) the form in which an appeal may be filed before the Securities Appellate Tribunal under
section 15T and the fees payable in respect of such appeal;]
(e) the form and the manner in which returns and report to be made to the Central
Government under section 18;
(f) any other matter which is to be, or may be, prescribed, or in respect of which provision is
to be, or may be, made by rules.
Power to make regulations.

30. (1) The Board may, 180[***] by notification, make regulations consistent with this Act and the
rules made thereunder to carry out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations
may provide for all or any of the following matters, namely :—
(a) the times and places of meetings of the Board and the procedure to be followed at such
meetings under sub-section (1) of section 7 including quorum necessary for the
transaction of business;
(b) the terms and other conditions of service of officers and employees of the Board under
181[(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;
182[(ca) the utilisation of the amount credited under sub-section (5) of section 11;
176 Clause (c) omitted by Securities laws (Amendment) Act 1995, w.e.f. 25-1-1995. Prior to its omission,
clause (c) it read as under:
“(c) the conditions subject to which registration certificate is to be issued under sub-section (1) of section
12”.
177 Inserted by Securities Laws (Amendment) Act, 1995, w.e.f. 25-1-1995.
178 Substituted for “Presiding Officers” by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
179 Substituted for “Presiding Officers”, by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.
180 The words “with the previous approval of the Central Government” omitted by Securities Laws
(Amendment) Act 1995 w.e.f. 25-1-1995.

181 Substituted for the existing clause (c) by the Securities Laws (Amendment) Act 1995 w.e.f. 25-1-1995.
Prior to substitution this clause read as under:

“(c) the amount of fee to be paid for registration certificate and manner of suspension or cancellation of
registration certificate under sub-section (2) and (3) of section 12.”
45
(cb) the fulfilment of other conditions relating to collective investment scheme under sub-
section (2A) of section 11AA;]
((d) the conditions subject to which certificate of registration is to be issued, the amount
of fee to be paid for certificate of registration and the manner of suspension or cancellation
of certificate of registration under section 12.]
183[(da)the terms determined by the Board for settlement of proceedings under sub-section (2)
and the procedure for conducting of settlement proceedings under sub-section (3) of
section 15JB;
(db) any other matter which is required to be, or may be, specified by regulations or in respect
of which provision is to be made by regulations.]
Rules and regulations to be laid before Parliament.

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

32. The provisions of this Act shall be in addition to, and not in derogation of, the provisions of
any other law for the time being in force.
Amendment of certain enactments.

33. [Repealed by Repealing & Amending Act, 2001.]
Power to remove difficulties.

34. (1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government
may, by order, published in the Official Gazette, make such provisions not inconsistent with the
provisions of this Act as may appear to be necessary for removing the difficulty :
Provided that no order shall be made under this section after the expiry of five years from the
commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before
each House of Parliament.
184[Validation of certain acts.

34A. Any act or thing done or purporting to have been done under the principal Act, in respect
of calling for information from, or furnishing information to, other authorities, whether in India
184
46
or outside India, having functions similar to those of the Board and in respect of settlement of
administrative and civil proceedings, shall, for all purposes, be deemed to be valid and effective
as if the amendments made to the principal Act had been in force at all material times.]
Repeal and saving.

35. (1) The Securities and Exchange Board of India Ordinance, 1992 (Ord. 5 of 1992), is hereby
repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance
shall be deemed to have been done or taken under the corresponding provisions of this Act.
THE SCHEDULE
[See section 33]
AMENDMENT OF CERTAIN ENACTMENTS
[Repealed by Repealing & Amending Act, 2001]
47
THE DEPOSITORIES ACT, 1996
_________
ARRANGEMENT OF SECTIONS
__________
CHAPTER I
PRELIMINARY
SECTIONS
1. Short title, extent and commencement.
2. Definitions.
CHAPTER II
CERTIFICATE OF COMMENCEMENT OF BUSINESS
3. Certificate of commencement of business by depositories.
CHAPTER III
RIGHTS AND OBLIGATIONS OF DEPOSITORIES, PARTICIPANTS, ISSUERS AND BENEFICIAL OWNERS
4. Agreement between depository and participant.
5. Services of depository.
6. Surrender of certificate of security.
7. Registration of transfer of securities with depository.
8. Options to receive security certificate or hold securities with depository.
9. Securities in depositories to be in fungible form.
10. Rights of depositories and beneficial owner.
11. Register of beneficial owner.
12. Pledge or hypothecation of securities held in a depository.
13. Furnishing of information and records by depository and issuer.
14. Option to opt out in respect of any security.
15. Act 18 of 1891 to apply to depositories.
16. Depositories to indemnify loss in certain cases.
17. Rights and obligations of depositories, etc.
CHAPTER IV
ENQUIRY AND INSPECTION
18. Power of Board to call for information and enquiry.
19. Power of Board to give directions in certain cases.
19A. Penalty for failure to furnish information, return, etc.
19B. Penalty for failure to enter into an agreement.
19C. Penalty for failure to redress investors’ grievances.
19D. Penalty for delay in dematerialisation or issue of certificate of securities.
19E. Penalty for failure to reconcile records.
19F. Penalty for failure to comply with directions issued by Board under section 19 of the Act.
19G. Penalty for contravention where no separate penalty has been provided.
19H. Power to adjudicate.
19-I. Factors to be taken into account by adjudicating officer.
1
SECTIONS
19-IA. Settlement of Administrative and Civil Proceedings.
19-IB. Recovery of amounts.
19J. Crediting sums realised by way of penalties to Consolidated Fund of India.
CHAPTER V
PENALTY
20. Offences.
21. Offences by companies.
CHAPTER VI
MISCELLANEOUS
22. Cognizance of offences by courts.
22A. Composition of certain offences.
22B. Power to grant immunity.
22C. Establishment of Special Courts.
22D. Offences triable by Special Courts.
22E. Appeal and revision.
22F. Application of Code to proceedings before Special Court.
22G. Transitional provisions.
23. Appeals.
23A. Appeal to Securities Appellate Tribunal.
23B. Procedure and powers of Securities Appellate Tribunal.
23C. Right to legal representation.
23D. Limitation.
23E. Civil Court not to have jurisdiction.
23F. Appeal to Supreme Court.
24. Power of Central Government to make rules.
25. Power of Board to make regulations.
26. Power of depositories to make bye-laws.
27. Rules and regulations to be laid before Parliament.
28. Application of other laws not barred.
29. Removal of difficulties.
30. [Repealed.]
30A. Validation of certain acts.
31. Repeal and saving.
THE SCHEDULE. [Repealed.]
2
THE DEPOSITORIES ACT, 1996
ACT NO. 22 OF 1996
[10th August, 1996.]
An Act to provide for regulation of depositories in securities and for matters connected therewith
or incidental thereto.
BE it enacted by Parliament in the Forty-seventh Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.—(1) This Act may be called the Depositories Act, 1996.
(3) It shall be deemed to have come into force on the 20th day of September, 1995.
2. Definitions.—(1) In this Act, unless the context otherwise requires,—
(a) “beneficial owner” means a person whose name is recorded as such with a depository;
(b) “Board” means the Securities and Exchange Board of India established under section 3 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992);
(c) “bye-laws” means bye-laws made by a depository under section 26;
(d) “Company Law Board” means the Board of Company Law Administration constituted under
section 10E of the Companies Act, 1956 (1 of 1956);
(e) “depository” means a company formed and registered under the Companies Act,
1956 (1 of 1956) and which has been granted a certificate of registration under sub-section (1A) of
section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(f) “issuer” means any person making an issue of securities;
(g) “participant” means a person registered as such under sub-section (1A) of section 12 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992);
(h) “prescribed” means prescribed by rules made under this Act;
(i) “record” includes the records maintained in the form of books or stored in a computer or in
such other form as may be determined by regulations;
(j) “registered owner” means a depository whose name is entered as such in the register of the
issuer;
(k) “regulations” means the regulations made by the Board;
[(ka) “Securities Appellate Tribunal” means a Securities Appellate Tribunal established under
1
sub-section (1) of section 15K of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]
(l) “security” means such security as may be specified by the Board;
(m) “service” means any service connected with recording of allotment of securities or transfer of
ownership of securities in the record of a depository.
(2) Words and expressions used herein and not defined but defined in the Companies Act,
1956 (1 of 1956) or the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and
Exchange Board of India Act, 1992 (15 of 1992), shall have the meanings respectively assigned to them
in those Acts.
1. Ins. by Act 32 of 1999, s. 13 (w.e.f. 16-12-1999).

3
CHAPTER II
CERTIFICATE OF COMMENCEMENT OF BUSINESS
3. Certificate of commencement of business by depositories.—(1) No depository shall act as a
depository unless it obtains a certificate of commencement of business from the Board.
(2) A certificate granted under sub-section (1) shall be in such form as may be specified by the
regulations.
(3) The Board shall not grant a certificate under sub-section (1) unless it is satisfied that the
depository has adequate systems and safeguards to prevent manipulation of records and transactions:
Provided that no certificate shall be refused under this section unless the depository concerned has
been given a reasonable opportunity of being heard.
CHAPTER III
RIGHTS AND OBLIGATIONS OF DEPOSITORIES, PARTICIPANTS, ISSUERS AND BENEFICIAL OWNERS
4. Agreement between depository and participant.—(1) A depository shall enter into an agreement
with one or more participants as its agent.
(2) Every agreement under sub-section (1) shall be in such form as may be specified by the bye-laws.
5. Services of depository.—Any person, through a participant, may enter into an agreement, in such
form as may be specified by the bye-laws, with any depository for availing its services.
6. Surrender of certificate of security.—(1) Any person who has entered into an agreement under
section 5 shall surrender the certificate of security, for which he seeks to avail the services of a
depository, to the issuer in such manner as may be specified by the regulations.
(2) The issuer, on receipt of certificate of security under sub-section (1), shall cancel the certificate of
security and substitute in its records the name of the depository as a registered owner in respect of that
security and inform the depository accordingly.
(3) A depository shall, on receipt of information under sub-section (2), enter the name of the person
referred to in sub-section (1) in its records, as the beneficial owner.
7. Registration of transfer of securities with depository.—(1) Every depository shall, on receipt of
intimation from a participant, register the transfer of security in the name of the transferee.
1
[(1A) Every depository on receipt of intimation from a participant register any transfer of security in
favour of an asset reconstruction company as defined in clause (ba) of sub-section (1) of section 2 of the
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
(54 of 2002) along with or consequent upon transfer or assignment of financial asset of any bank or
financial institution under sub-section (1) of section 5 of that Act.
(1B) Every depository, on receipt of intimation from a participant, register any issue of new shares in
favour of any bank or financial institution or asset reconstruction company or any other assignee of such
bank or financial institution or asset reconstruction company, as the case may be, by conversion of part of
their debt into shares pursuant to reconstruction of debts of the company agreed between the company and
the bank or financial institution or asset reconstruction company.
Explanation.—For the purpose of this section, the expressions “asset reconstruction company”,
“bank”, and “financial institution” shall have the meanings assigned to them respectively under
clauses (ba), (c) and (m) of sub-section (1) of section 2 of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002).]
(2) If a beneficial owner or a transferee of any security seeks to have custody of such security, the
depository shall inform the issuer accordingly.
8. Options to receive security certificate or hold securities with depository.—(1) Every person
subscribing to securities offered by an issuer shall have the option either to receive the security
certificates or hold securities with a depository.
(2) Where a person opts to hold a security with a depository, the issuer shall intimate such depository
the details of allotment of the security, and on receipt of such information the depository shall enter in its
records the name of the allottee as the beneficial owner of that security.
1. Ins. by Act 44 of 2016, s. 44 and the Second Schedule (w.e.f. 1-9-2016).

4
9. Securities in depositories to be in fungible form.—(1) All securities held by a depository shall be
dematerialised and shall be in a fungible form.
1
[(2) Nothing contained in sections 153, 153A, 153B, 187B, 187C and 372 of the Companies Act,
1956 (1 of 1956) shall apply to a depository in respect of securities held by it on behalf of the beneficial
owners.]
10. Rights of depositories and beneficial owner.—(1) Notwithstanding anything contained in any
other law for the time being in force, a depository shall be deemed to be the registered owner for the
purposes of effecting transfer of ownership of security on behalf of a beneficial owner.
(2) Save as otherwise provided in sub-section (1), the depository as a registered owner shall not have
any voting rights or any other rights in respect of securities held by it.
(3) The beneficial owner shall be entitled to all the rights and benefits and be subjected to all the
liabilities in respect of his securities held by a depository.
11. Register of beneficial owner.—Every depository shall maintain a register and an index of
beneficial owners in the manner provided in sections 150, 151 and 152 of the Companies Act,
1956 (1 of 1956).
12. Pledge or hypothecation of securities held in a depository.—(1) Subject to such regulations
and bye-laws, as may be made in this behalf, a beneficial owner may with the previous approval of the
depository create a pledge or hypothecation in respect of a security owned by him through a depository.
(2) Every beneficial owner shall give intimation of such pledge or hypothecation to the depository
and such depository shall thereupon make entries in its records accordingly.
(3) Any entry in the records of a depository under sub-section (2) shall be evidence of a pledge or
hypothecation.
13. Furnishing of information and records by depository and issuer.—(1) Every depository shall
furnish to the issuer information about the transfer of securities in the name of beneficial owners at such
intervals and in such manner as may be specified by the bye-laws.
(2) Every issuer shall make available to the depository copies of the relevant records in respect of
securities held by such depository.
14. Option to opt out in respect of any security.—(1) If a beneficial owner seeks to opt out of a
depository in respect of any security he shall inform the depository accordingly.
(2) The depository shall on receipt of intimation under sub-section (1) make appropriate entries in its
records and shall inform the issuer.
(3) Every issuer shall, within thirty days of the receipt of intimation from the depository and on
fulfilment of such conditions and on payment of such fees as may be specified by the regulations, issue
the certificate of securities to the beneficial owner or the transferee, as the case may be.
15. Act 18 of 1891 to apply to depositories.—The Bankers’ Books Evidence Act, 1891 shall apply
in relation to a depository as if it were a bank as defined in section 2 of that Act.
16. Depositories to indemnify loss in certain cases.—(1) Without prejudice to the provisions of any
other law for the time being in force, any loss caused to the beneficial owner due to the negligence of the
depository or the participant, the depository shall indemnify such beneficial owner.
(2) Where the loss due to the negligence of the participant under sub-section (1) is indemnified by the
depository, the depository shall have the right to recover the same from such participant.
17. Rights and obligations of depositories, etc.—(1) Subject to the provisions of this Act, the rights
and obligations of the depositories, participants and the issuers whose securities are dealt with by a
depository shall be specified by the regulations.
(2) The eligibility criteria for admission of securities into the depository shall be specified by the
regulations.
1. Subs. by Act 8 of 1997, s. 22, for sub-section (2) (w.e.f. 15-1-1997).

5
CHAPTER IV
ENQUIRY AND INSPECTION
18. Power of Board to call for information and enquiry.—(1) The Board, on being satisfied that it
is necessary in the public interest or in the interest of investors so to do, may, by order in writing,—
(a) call upon any issuer, depository, participant or beneficial owner to furnish in writing such
information relating to the securities held in a depository as it may require; or
(b) authorise any person to make an enquiry or inspection in relation to the affairs of the issuer,
beneficial owner, depository or participant, who shall submit a report of such enquiry or inspection to
it within such period as may be specified in the order.
(2) Every director, manager, partner, secretary, officer or employee of the depository or issuer or the
participant or beneficial owner shall on demand produce before the person making the enquiry or
inspection all information or such records and other documents in his custody having a bearing on the
subject matter of such enquiry or inspection.
19. Power of Board to give directions in certain cases.—Save as provided in this Act, if after
making or causing to be made an enquiry or inspection, the Board is satisfied that it is necessary—
(i) in the interest of investors, or orderly development of securities market; or
(ii) to prevent the affairs of any depository or participant being conducted in the manner
detrimental to the interests of investors or securities market,
it may issue such directions—
(a) to any depository or participant or any person associated with the securities market; or
(b) to any issuer,
as may be appropriate in the interest of investors or the securities market.
1
[Explanation.—For the removal of doubts, it is hereby declared that power to issue directions under
this section shall include and always be deemed to have been included the power to direct any person,
who made profit or averted loss by indulging in any transaction or activity in contravention of the
provisions of this Act or regulations made thereunder, to disgorge an amount equivalent to the wrongful
gain made or loss averted by such contravention.]
2
[19A. Penalty for failure to furnish information, return, etc.—Any person, who is required under
this Act or any rules or regulations or bye-laws made thereunder,—
(a) to furnish any information, document, books, returns or report to the Board, fails to furnish the same
within the time specified therefor, he shall be liable to a penalty 3[which shall not be less than one lakh
rupees but which may extend to one lakh rupees for each day during which such failure continues
subject to a maximum of one crore rupees] for each such failure;
(b) to file any return or furnish any information, books or other documents within the time
specified therefor in the regulations or bye-laws, fails to file return or furnish the same within the time
specified therefor, he shall be liable to a penalty 3[which shall not be less than one lakh rupees but
which may extend to one lakh rupees for each day during which such failure continues subject to a
maximum of one crore rupees];
(c) to maintain books of account or records, fails to maintain the same, he shall be liable to a
penalty 3[which shall not be less than one lakh rupees but which may extend to one lakh rupees for
each day during which such failure continues subject to a maximum of one crore rupees].
19B. Penalty for failure to enter into an agreement.—If a depository or participant or any issuer or
its agent or any person, who is registered as an intermediary under the provisions of section 12 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992), and is required under this Act or any
rules or regulations, made thereunder, to enter into an agreement, fails to enter into such agreement, such
depository or participant or issuer or its agent or intermediary shall be liable to a penalty 4[which shall not
be less than one lakh rupees but which may extend to one lakh rupees for each day during which such
failure continues subject to a maximum of one crore rupees] for every such failure.
1. Ins. by Act 27 of 2014, s. 41 (w.e.f. 8-9-2014).

2. Ins. by Act 1 of 2005, s. 17 (w.e.f. 12-10-2004).
3. Subs. by Act 27 of 2014, s. 42, for certain words (w.e.f. 8-9-2014).
4. Subs. by s. 43, ibid., for certain words (w.e.f. 8-9-2014).
6
19C. Penalty for failure to redress investors’ grievances.—If any depository or participant or any
issuer or its agent or any person, who is registered as an intermediary under the provisions of section 12
of the Securities and Exchange Board of India Act, 1992 (15 of 1992), after having been called upon by
the Board in writing, to redress the grievances of the investors, fails to redress such grievances within the
time specified by the Board, such depository or participant or issuer or its agents or intermediary shall be
liable to a penalty 1[which shall not be less than one lakh rupees but which may extend to one lakh rupees
for each day during which such failure continues subject to a maximum of one crore rupees].
19D. Penalty for delay in dematerialisation or issue of certificate of securities.—If any issuer or
its agent or any person, who is registered as an intermediary under the provisions of section 12 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992), fails to dematerialise or issue the
certificate of securities on opting out of a depository by the investors, within the time specified under this
Act or regulations or bye-laws made thereunder or abets in delaying the process of dematerialisation or
issue the certificate of securities on opting out of a depository of securities, such issuer or its agent or
intermediary shall be liable to a penalty 2[which shall not be less than one lakh rupees but which may
extend to one lakh rupees for each day during which such failure continues subject to a maximum of one
crore rupees].
19E. Penalty for failure to reconcile records.—If a depository or participant or any issuer or its
agent or any person, who is registered as an intermediary under the provisions of section 12 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992), fails to reconcile the records of
dematerialised securities with all the securities issued by the issuer as specified in the regulations, such
depository or participant or issuer or its agent or intermediary shall be liable to a penalty 3[which shall not
be less than one lakh rupees but which may extend to one lakh rupees for each day during which such
failure continues subject to a maximum of one crore rupees].
19F. Penalty for failure to comply with directions issued by Board under section 19 of the
Act.—If any person fails to comply with the directions issued by the Board under section 19, within the
time specified by it, he shall be liable to a penalty 4[which shall not be less than one lakh rupees but which
may extend to one lakh rupees for each day during which such failure continues subject to a maximum of
one crore rupees].
19G. Penalty for contravention where no separate penalty has been provided.—Whoever fails to
comply with any provision of this Act, the rules or the regulations or bye-laws made or directions issued
by the Board thereunder for which no separate penalty has been provided, shall be 5[liable to a penalty
which shall not be less than one lakh rupees but which may extend to one crore rupees].
19H. Power to adjudicate.—(1) For the purpose of adjudging under sections 19A, 19B, 19C, 19D,
19E, 19F and 19G, the Board shall appoint any officer not below the rank of a Division Chief of the
Securities and Exchange Board of India to be an adjudicating officer for holding an inquiry in the
prescribed manner after giving any person concerned a reasonable opportunity of being heard for the
purpose of imposing any penalty.
(2) While holding an inquiry, the adjudicating officer shall have power to summon and enforce the
attendance of any person acquainted with the facts and circumstances of the case to give evidence or to
produce any document, which in the opinion of the adjudicating officer, may be useful for or relevant to
the subject-matter of the inquiry and if, on such inquiry, he is satisfied that the person has failed to
comply with the provisions of any of the sections specified in sub-section (1), he may impose such
penalty as he thinks fit in accordance with the provisions of any of those sections.
1. Subs. by Act 27 of 2014, s. 44 for certain words (w.e.f. 8-9-2014).

7
1
[(3) The Board may call for and examine the record of any proceedings under this section and if it
considers that the order passed by the adjudicating officer is erroneous to the extent it is not in the
interests of the securities market, it may, after making or causing to be made such inquiry as it deems
necessary, pass an order enhancing the quantum of penalty, if the circumstances of the case so justify:
Provided that no such order shall be passed unless the person concerned has been given an
opportunity of being heard in the matter:
Provided further that nothing contained in this sub-section shall be applicable after an expiry of a
period of three months from the date of the order passed by the adjudicating officer or disposal of the
appeal under section 23A, whichever is earlier.]
19-I. Factors to be taken into account by adjudicating officer.—While adjudging the quantum of
penalty under section 19H, the adjudicating officer shall have due regard to the following factors,
namely:—
(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a
result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the default;
2
[Explanation.—For the removal of doubts, it is clarified that the power of an adjudicating officer
to adjudge the quantum of penalty under sections 19A to 19F shall be and shall always be deemed to
have been exercised under the provisions of this section.]
3
[19-IA. Settlement of Administrative and Civil Proceedings.—(1) Notwithstanding anything
contained in any other law for the time being in force, any person, against whom any proceedings have
been initiated or may be initiated under section 19 or section 19H, as the case may be, may file an
application in writing to the Board proposing for settlement of the proceedings initiated or to be initiated
for the alleged defaults.
(2) The Board may, after taking into consideration the nature, gravity and impact of defaults, agree to
the proposal for settlement, on payment of such sum by the defaulter or on such other terms as may be
determined by the Board in accordance with the regulations made under the Securities and Exchange
Board of India Act, 1992 (15 of 1992).
(3) For the purpose of settlement under this section, the procedure as specified by the Board under the
Securities and Exchange Board of India Act, 1992 (15 of 1992) shall apply.
(4) No appeal shall lie under section 23A against any order passed by the Board or the adjudicating
officer under this section.]
4
[19-IB. Recovery of amounts.—(1) If a person fails to pay the penalty imposed by the adjudicating
officer or fails to comply with a direction of disgorgement order issued under section 19 or fails to pay
any fees due to the Board, the Recovery Officer may draw up under his signature a statement in the
specified form specifying the amount due from the person (such statement being hereafter in this Chapter
referred to as certificate) and shall proceed to recover from such person the amount specified in the
certificate by one or more of the following modes, namely:—
(a) attachment and sale of the person’s movable property;

(b) attachment of the person’s bank accounts;
1. Ins. by Act 27 of 2014, s. 49 (w.e.f. 18-7-2013).

2. Ins. by Act 7 of 2017, s. 149 (31-3-2017).
3. Ins. by Act 27 of 2014, s. 50 (w.e.f. 20-4-2007).
4. Ins. by s. 51, ibid. (w.e.f. 18-7-2013).
8
(c) attachment and sale of the person’s immovable property;
(d) arrest of the person and his detention in prison;
(e) appointing a receiver for the management of the person’s movable and immovable properties,
and for this purpose, the provisions of sections 220 to 227, 228A, 229, 232, the Second and Third
Schedules to the Income-tax Act, 1961 (43 of 1961), and the Income-tax (Certificate Proceedings) Rules,
1962 as in force from time to time, in so far as may be, apply with necessary modifications as if the said
provisions and the rules thereunder were the provisions of this Act and referred to the amount due under
this Act instead of to income-tax under the Income-tax Act, 1961.
Explanation 1.—For the purposes of this sub-section, the person’s movable or immovable property or
monies held in bank accounts shall include any property or monies held in bank accounts which has been
transferred, directly or indirectly on or after the date when the amount specified in certificate had become
due, by the person to his spouse or minor child or son’s wife or son’s minor child, otherwise than for
adequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid; and
so far as the movable or immovable property or monies held in bank accounts so transferred to his minor
child or his son’s minor child is concerned, it shall, even after the date of attainment of majority by such
minor child or son’s minor child, as the case may be, continue to be included in the person’s movable or
immovable property or monies held in bank accounts for recovering any amount due from the person
under this Act.
Explanation 2.—Any reference under the provisions of the Second and Third Schedules to the
Income-tax Act, 1961 (43 of 1961) and the Income-tax (Certificate Proceedings) Rules, 1962 to the
assessee shall be construed as a reference to the person specified in the certificate.
Explanation 3.—Any reference to appeal in Chapter XVIID and the Second Schedule to the
Income-tax Act, 1961 (43 of 1961), shall be construed as a reference to appeal before the Securities
Appellate Tribunal under section 23A of this Act.
(2) The Recovery Officer shall be empowered to seek the assistance of the local district
administration while exercising the powers under sub-section (1).
(3) Notwithstanding anything contained in any other law for the time being in force, the recovery of
amounts by a Recovery Officer under sub-section (1), pursuant to non-compliance with any direction
issued by the Board under section 19, shall have precedence over any other claim against such person.
(4) For the purposes of sub-sections (1), (2) and (3), the expression ‘‘Recovery Officer’’ means any
officer of the Board who may be authorised, by general or special order in writing, to exercise the powers
of a Recovery Officer.]
19J. Crediting sums realised by way of penalties to Consolidated Fund of India.—All sums
realised by way of penalties under this Act shall be credited to the Consolidated Fund of India.]
CHAPTER V
PENALTY
1
[20. Offences.—(1) Without prejudice to any award of penalty by the 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 or bye-laws made thereunder, he shall be punishable with
imprisonment for a term which may extend to ten years, or with fine, which may extend to twenty-five
crore rupees, or with both.
(2) If any person fails to pay the penalty imposed by the adjudicating officer or fails to comply with
any of his directions or orders, he shall be punishable with imprisonment for a term which shall not be
less than one month but which may extend to ten years, or with fine, which may extend to twenty-five
crore rupees, or with both.]
1. Subs. by Act 1 of 2005, s. 18, for section 20 (w.e.f. 12-10-2004).

9
21. Offences by companies.—(1) Where an offence under this Act has been committed by a
company, every person who at the time the offence was committed was in charge of, and was responsible
to, the company for the conduct of the business of the company, as well as the company, shall be deemed
to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any
punishment provided in this Act, if he proves that the offence was committed without his knowledge or
that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been
committed by a company and it is proved that the offence has been committed with the consent or
connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other
officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty
of the offence and shall be liable to be proceeded against and punished accordingly.
(a) “company” means any body corporate and includes a firm or other association of individuals;
and
(b) “director”, in relation to a firm, means a partner in the firm.
CHAPTER VI
MISCELLANEOUS
1
[22. Cognizance of offences by courts.—(1) No court shall take cognizance of any offence
punishable under this Act or any rules or regulations or bye-laws made thereunder, save on a complaint
made by the Central Government or State Government or the Securities and Exchange Board of India or
by any person.
2
* * * * *
22A. Composition of certain offences.—Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974), any offence punishable under this Act, not being an offence
punishable with imprisonment only, or with imprisonment and also with fine, may either before or after
the institution of any proceeding, be compounded by a Securities Appellate Tribunal or a court before
which such proceedings are pending.
22B. Power to grant immunity.—(1) The Central Government may, on recommendation by the
Board, if the Central Government is satisfied, that any person, who is alleged to have violated any of the
provisions of this Act or the rules or the regulations made thereunder, has made a full and true disclosure
in respect of alleged violation, grant to such person, subject to such conditions as it may think fit to
impose, immunity from prosecution for any offence under this Act, or the rules or the regulations made
thereunder or also from the imposition of any penalty under this Act with respect to the alleged violation:
Provided that no such immunity shall be granted by the Central Government in cases where the
proceedings for the prosecution for any such offence have been instituted before the date of receipt of
application for grant of such immunity:
Provided further that recommendation of the Board under this sub-section shall not be binding upon
the Central Government.
(2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the
Central Government, if it is satisfied that such person had, in the course of the proceedings, not complied
with the condition on which the immunity was granted or had given false evidence, and thereupon such
person may be tried for the offence with respect to which the immunity was granted or for any other
offence of which he appears to have been guilty in connection with the contravention and shall also
become liable to the imposition of any penalty under this Act to which such person would have been
liable, had not such immunity been granted.]

2. Sub-section (2) omitted by Act 27 of 2014, s. 52 (w.e.f. 18-7-2013).
10
1
[22C. Establishment of Special Courts.—(1) The Central Government may, for the purpose of
providing speedy trial of offences under this Act, by notification, establish or designate as many Special
Courts as may be necessary.
(2) A Special Court shall consist of a single judge who shall be appointed by the Central Government
with the concurrence of the Chief Justice of the High Court within whose jurisdiction the judge to be
appointed is working.
(3) A person shall not be qualified for appointment as a judge of a Special Court unless he is,
immediately before such appointment, holding the office of a Sessions Judge or an Additional Sessions
Judge, as the case may be.
22D. Offences triable by Special Courts.—Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974), all offences under this Act committed prior to the date of
commencement of the Securities Laws (Amendment) Act, 2014 (27 of 2014) or on or after the date of
such commencement, shall be taken cognizance of and tried by the Special Court established for the area
in which the offence is committed or where there are more Special Courts than one for such area, by such
one of them as may be specified in this behalf by the High Court concerned.
22E. Appeal and revision.—The High Court may exercise, so far as may be applicable, all the
powers conferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 (2 of 1974) on a
High Court, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court
of Session trying cases within the local limits of the jurisdiction of the High Court.
22F. Application of Code to proceedings before Special Court.—(1) Save as otherwise provided in
this Act, the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply to the
proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be
deemed to be a Court of Session and the person conducting prosecution before a Special Court shall be
deemed to be a Public Prosecutor within the meaning of clause (u) of section 2 of the Code of Criminal
Procedure, 1973.
(2) The person conducting prosecution referred to in sub-section (1) should have been in practice as
an advocate for not less than seven years or should have held a post, for a period of not less than seven
years, under the Union or a State, requiring special knowledge of law.
22G. Transitional provisions.—Any offence committed under this Act, which is triable by a Special
Court shall, until a Special Court is established, be taken cognizance of and tried by a Court of Session
exercising jurisdiction over the area, notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974):
Provided that nothing contained in this section shall affect the powers of the High Court under section
407 of the Code to transfer any case or class of cases taken cognizance by a Court of Session under this
section.]
23. Appeals.—(1) Any person aggrieved by 2[an order of the Board made before the commencement
of the Securities Laws (Second Amendment) Act, 1999 (32 of 1999)] under this Act, or the regulations
made thereunder may prefer an appeal to the Central Government within such time as may be prescribed.
(2) No appeal shall be admitted if it is preferred after the expiry of the period prescribed therefor:
Provided that an appeal may be admitted after the expiry of the period prescribed therefor if the
appellant satisfies the Central Government that he had sufficient cause for not preferring the appeal within
the prescribed period.
(3) Every appeal made under this section shall be made in such form and shall be accompanied by a
copy of the order appealed against and by such fees as may be prescribed.
(4) The procedure for disposing of an appeal shall be such as may be prescribed:
1. Ins. by Act 27 of 2014, s. 53 (w.e.f. 18-7-2013).

2. Subs. by Act 32 of 1999, s. 14, for “an order of the Board made” (w.e.f.16-12-1999).
11
Provided that before disposing of an appeal, the appellant shall be given a reasonable opportunity of
being heard.
1
[23A. Appeal to Securities Appellate Tribunal.—(1) Save as provided in sub-section (2), any
person aggrieved by an order of the Board made, on and after the commencement of the Securities Laws
(Second Amendment) Act, 1999 (32 of 1999), under this Act, or the regulations made thereunder,
2
[or by an order made by an adjudicating officer under this Act] may prefer an appeal to a Securities
Appellate Tribunal having jurisdiction in the matter.
3
* * * * *
(3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date
on which a copy of the order made by the Board is received by the person referred to in sub-section (1)
and it shall be in such form and be accompanied by such fees as may be prescribed:
Provided that the Securities Appellate Tribunal may entertain an appeal after the expiry of the said
period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.
(4) On receipt of an appeal under sub-section (1), the Securities Appellate Tribunal may, after giving
the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit,
confirming, modifying or setting aside the order appealed against.
(5) The Securities Appellate Tribunal shall send a copy of every order made by it to the Board and
parties to the appeal.
(6) The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall be dealt with
by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within
six months from the date of receipt of the appeal.
23B. Procedure and powers of Securities Appellate Tribunal.—(1) The Securities Appellate
Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908),
but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and
of any rules, the Securities Appellate Tribunal shall have powers to regulate their own procedure
including the places at which they shall have their sittings.
(2) The Securities Appellate Tribunal shall have, for the purpose of discharging their functions under
this Act, the same powers as are vested in a civil court under the Code of Civil Procedure,
1908 (5 of 1908), while trying a suit in respect of the following matters, namely:—
(f) dismissing an application for default or deciding it ex parte;
(g) setting aside any order of dismissal of any application for default or any order passed by it
ex parte; and
(3) Every proceeding before the Securities Appellate Tribunal shall be deemed to be a judicial
proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian
Penal Code (45 of 1860) and the Securities Appellate Tribunal shall be deemed to be a civil court for all
the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).
1. Ins. by Act 32 of 1999, s. 15 (w.e.f. 16-12-1999).

2. Ins. by Act 1 of 2005, s. 20 (w.e.f. 12-10-2004).
3. Sub-section (2) omitted by Act 27 of 2014, s. 54 (w.e.f 18-7-2013).
12
23C. Right to legal representation.—The appellant may either appear in person or authorise one or
more chartered accountants or company secretaries or cost accountants or legal practitioners or any of its
officers to present his or its case before the Securities Appellate Tribunal.
(a) “chartered accountant” means a chartered accountant as defined in clause (b) of
sub-section (1) of section 2 of Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a
certificate of practice under sub-section (1) of section 6 of that Act;
(b) “company secretary” means a company secretary as defined in clause (c) of sub-section (1) of
section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate of
practice under sub-section (1) of section 6 of that Act;
(c) “cost accountant” means a cost accountant as defined in clause (b) of sub-section (1) of
section 2 of Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate
of practice under sub-section (1) of section 6 of that Act;
(d) “legal practitioner” means an advocate, vakil or an attorney of any High Court, and includes a
pleader in practice.
23D. Limitation.—The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be,
apply to an appeal made to a Securities Appellate Tribunal.
23E. Civil court not to have jurisdiction.—No civil court shall have jurisdiction to entertain any
suit or proceeding in respect of any matter which a Securities Appellate Tribunal is empowered by or
under this Act to determine and no injunction shall be granted by any court or other authority in respect of
any action taken or to be taken in pursuance of any power conferred by or under this Act.
1
[23F. Appeal to Supreme Court.—Any person aggrieved by any decision or order of the Securities
Appellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of
communication of the decision or order of the Securities Appellate Tribunal to him on any question of
law arising out of such order:
Provided that the Supreme Court may, if it is satisfied that the appellant was prevented by sufficient
cause from filing the appeal within the said period, allow it to be filed within a further period not
exceeding sixty days.]
24. Power of Central Government to make rules.—(1) The Central Government may, by
notification in the Official Gazette, make rules for carrying out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may
provide for all or any of the following matters, namely:—
2
[(a) the manner of inquiry under sub-section (1) of section 19H;
(aa) the time within which an appeal may be preferred under sub-section (1) of section 23;]
(b) the form in which an appeal may be preferred under sub-section (3) of section 23 and the fees
payable in respect of such appeal;
(c) the procedure for disposing of an appeal under sub-section (4) of section 23;
3
[(d) the form in which an appeal may be filed before the Securities Appellate Tribunal under
section 23A and the fees payable in respect of such appeal.]
25. Power of Board to make regulations.—(1) Without prejudice to the provisions contained in
section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board may, by
notification in the Official Gazette, make regulations consistent with the provisions of this Act and the
rules made thereunder to carry out the purposes of this Act.
1. Subs. by Act 1 of 2005, s. 21, for section 23F (w.e.f. 12-10-2004).

2. Subs. by s. 22, ibid., for clause (a) (w.e.f. 12-10-2004).
3. Ins. by Act 32 of 1999, s. 16 (w.e.f. 16-12-1999).
13
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may
provide for—
(a) the form in which record is to be maintained under clause (i) of sub-section (1) of section 2;
(b) the form in which the certificate of commencement of business shall be issued under
(c) the manner in which the certificate of security shall be surrendered under sub-section (1) of
section 6;
(d) the manner of creating a pledge or hypothecation in respect of security owned by a beneficial
owner under sub-section (1) of section 12;
(e) the conditions and the fees payable with respect to the issue of certificate of securities under
(f) the rights and obligations of the depositories, participants and the issuers under sub-section (1)
of section 17;
(g) the eligibility criteria for admission of securities into the depository under sub-section (2) of
section 17;
1
[(h) the terms determined by the Board for settlement of proceedings under sub-section (2) of
section 19-IA;
(i) any other matter which is required to be, or may be, specified by regulations or in respect of
which provision to be made by regulations.]
26. Power of depositories to make bye-laws.—(1) A depository shall, with the previous approval of
the Board, make bye-laws consistent with the provisions of this Act and the regulations.
(2) In particular, and without prejudice to the generality of the foregoing power, such bye-laws shall
provide for—
(a) the eligibility criteria for admission and removal of securities in the depository;
(b) the conditions subject to which the securities shall be dealt with;
(c) the eligibility criteria for admission of any person as a participant;
(d) the manner and procedure for dematerialisation of securities;
(e) the procedure for transactions within the depository;
(f) the manner in which securities shall be dealt with or withdrawn from a depository;
(g) the procedure for ensuring safeguards to protect the interests of participants and beneficial
owners;
(h) the conditions of admission into and withdrawal from a participant by a beneficial owner;
(i) the procedure for conveying information to the participants and beneficial owners on dividend
declaration, shareholder meetings and other matters of interest to the beneficial owners;
(j) the manner of distribution of dividends, interest and monetary benefits received from the
company among beneficial owners;
(k) the manner of creating pledge or hypothecation in respect of securities held with a depository;
(l) inter se rights and obligations among the depository, issuer, participants and beneficial
owners;
(m) the manner and the periodicity of furnishing information to the Board, issuer and other
persons;
1. Ins. by Act 27 of 2014, s. 55 (w.e.f. 18-7-2013).

14
(n) the procedure for resolving disputes involving depository, issuer, company or a beneficial
owner;
(o) the procedure for proceeding against the participant committing breach of the regulations and
provisions for suspension and expulsion of participants from the depository and cancellation of
agreements entered with the depository;
(p) the internal control standards including procedure for auditing, reviewing and monitoring.
(3) Where the Board considers it expedient so to do, it may, by order in writing, direct a depository to
make any bye-laws or to amend or revoke any bye-laws already made within such period as it may
specify in this behalf.
(4) If the depository fails or neglects to comply with such order within the specified period, the Board
may make the bye-laws or amend or revoke the bye-laws made either in the form specified in the order or
with such modifications thereof as the Board thinks fit.
27. Rules and regulations to be laid before Parliament.—Every rule and every regulation made
under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it
is in session, for a total period of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or
both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter
have effect only in such modified form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of anything previously done under
that rule or regulation.
28. Application of other laws not barred.—The provisions of this Act shall be in addition to, and
not in derogation of, any other law for the time being in force relating to the holding and transfer of
securities.
29. Removal of difficulties.—(1) If any difficulty arises in giving effect to the provisions of this Act,
the Central Government may, by order published in the Official Gazette, make such provisions not
inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the
difficulty:
Provided that no order shall be made under this section after the expiry of a period of two years from
the commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each
House of Parliament.
[30. Amendments to certain enactments.]—Rep. by the Repealing and Amending Act,
2001 (30 of 2001), s. 2 and the First Schedule (w.e.f. 3-9-2001).
1
[30A. Validation of certain acts.— Any act or thing done or purporting to have been done under the
principal Act, in respect of settlement of administrative and civil proceedings, shall, for all purposes, be
deemed to be valid and effective as if the amendments made to the principal Act had been in force at all
material times.]
31. Repeal and saving.—(1) The Depositories (Third) Ordinance, 1996 (Ord. 28 of 1996) is hereby
repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be
deemed to have been done or taken under the corresponding provisions of this Act.
[THE SCHEDULE.]—Rep. by the Repealing and Amending Act, 2001 (30 of 2001), s. 2 and the First
Schedule (w.e.f. 3-9-2001).
1. Ins. by Act 27 of 2014, s. 56 (w.e.f. 18-7-2013).

15
SECURITIES CONTRACTS (REGULATION) ACT, 1956
[42 OF 1956]
An Act to prevent undesirable transactions in securities by regulating the business

of dealing therein, 1[***] by providing for certain other matters connected
therewith.
BE it enacted by Parliament in the Seventh Year of the Republic of India as follows:
PRELIMINARY
Short title, extent and commencement.

1. (1) This Act may be called the Securities Contracts (Regulation) Act, 1956.
(3) It shall come into force on such date2 as the Central Government may, by notification
in the Official Gazette, appoint.
Definitions.
2. In this Act, unless the context otherwise requires,—
(a) “contract” means a contract for or relating to the purchase or sale of securities;
3
[(aa) “corporatisation” means the succession of a recognised stock exchange, being a
body of individuals or a society registered under the Societies Registration Act,
1860 (21 of 1860), by another stock exchange, being a company incorporated for
the purpose of assisting, regulating or controlling the business of buying, selling
or dealing in securities carried on by such individuals or society;
(ab) “demutualisation” means the segregation of ownership and management from the
trading rights of the members of a recognised stock exchange in accordance with
a scheme approved by the Securities and Exchange Board of India;]
4 5
[ [(ac)] “derivative” includes—
(A) a security derived from a debt instrument, share, loan, whether secured or
unsecured, risk instrument or contract for differences or any other form of
security;
(B) a contract which derives its value from the prices, or index of prices, of
underlying securities;]
1
The words “by prohibiting options and” omitted by the Securities Laws (Amendment) Act, 1995 w.e.f.
25.01.1995
2
20-02-1957 vide SRO 528, dated 16-02-1957.
3
Inserted by the Securities Laws (Amendment) Act, 2004 (w.e.f. 12-10-2004)
4
Inserted by the Securities Laws (Amendment) Act, 1999 (w.e.f. 22-02-2000).
5
Clause (aa) renumbered by the Securities Laws (Amendment) Act, 2004 (w.e.f. 12-10-2004).
(b) “Government security” means a security created and issued, whether before or after
the commencement of this Act, by the Central Government or a State Government
for the purpose of raising a public loan and having one of the forms specified in
clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944);
(c) “member” means a member of a recognised stock exchange;
(d) “option in securities” means a contract for the purchase or sale of a right to buy or
sell, or a right to buy and sell, securities in future, and includes a teji, a mandi, a
teji mandi, a galli, a put, a call or a put and call in securities;
(e) “prescribed” means prescribed by rules made under this Act;
(f) “recognised stock exchange” means a stock exchange which is for the time being
recognised by the Central Government under section 4;
(g) “rules”, with reference to the rules relating in general to the constitution and
management of a stock exchange, includes, in the case of a stock exchange which
is an incorporated association, its memorandum and articles of association;
6
[(ga) “scheme” means a scheme for corporatisation or demutualisation of a recognised
stock exchange which may provide for—
(i) the issue of shares for a lawful consideration and provision of trading rights
in lieu of membership cards of members of a recognised stock exchange;
(ii) the restrictions on voting rights;
(iii) the transfer of property, business, assets, rights, liabilities, recognitions,
contracts of the recognised stock exchange, legal proceedings by, or against,
the recognised stock exchange, whether in the name of the recognised stock
exchange or any trustee or otherwise and any permission given to, or by, the
recognised stock exchange;
(iv) the transfer of employees of a recognised stock exchange to another
recognised stock exchange;
(v) any other matter required for the purpose of, or in connection with, the
corporatisation or demutualisation, as the case may be, of the recognised
stock exchange;]
7 8
[ [(gb)] “Securities Appellate Tribunal” means a Securities Appellate Tribunal
established under sub-section (1) of section 15K of the Securities and Exchange
Board of India Act, 1992 (15 of 1992);]
(h) “securities” include—
(i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable
securities of a like nature in or of any incorporated company or other body
corporate;
9
[(ia) derivative;
6
7
Inserted by the Securities Laws (Second Amendment) Act, 1999 (w.e.f. 16-12-1999).
8
Clause (ga) lettered as Cl. (gb) by the Securities Laws (Amendment) Act, 2004 (w.e.f. 12-10-2004)
9
(ib) units or any other instrument issued by any collective investment scheme to
the investors in such schemes;]
10
[(ic) security receipt as defined in clause (zg) of section 2 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002;]
11
[(id) units or any other such instrument issued to the investors under any
mutual fund scheme;]
12
(ii) Government securities;
(iia) such other instruments as may be declared by the Central Government to be
securities; and
(iii) rights or interest in securities;
13
[(i) “spot delivery contract” means a contract which provides for,—
(a) actual delivery of securities and the payment of a price therefore either on
the same day as the date of the contract or on the next day, the actual period
taken for the despatch of the securities or the remittance of money therefore
through the post being excluded from the computation of the period
aforesaid if the parties to the contract do not reside in the same town or
locality;
(b) transfer of the securities by the depository from the account of a beneficial
owner to the account of another beneficial owner when such securities are
dealt with by a depository;]
14
[(j) “stock exchange” means—
(a) any body of individuals, whether incorporated or not, constituted before
corporatisation and demutualisation under sections 4A and 4B, or
(b) a body corporate incorporated under the Companies Act, 1956 (1 of 1956)
whether under a scheme of corporatisation and demutualisation or
otherwise,
for the purpose of assisting, regulating or controlling the business of buying,
selling or dealing in securities.]
10
Inserted by the Securitisation and Reconstruction of Financial Assets and Enforcement by Security
Interest Act, 2002 (w.e.f. 21-06-2002).
11
12
Substituted by Act 15 of 1992, (w.e.f. 30-01-1992).
13
Substituted by the Depositories Act, 22 of 1996, (w.r.e.f. 20-09-1995). Prior to its substitution, clause(i)
read as under:
“(i) 'spot delivery contract' means a contract which provides for the actual delivery of securities and the
payment of a price therefore either on the same day as the date of the contract or on the next day, the actual
period taken for the despatch of the securities or the remittance of money therefore through the post being
excluded from the computation of the period aforesaid if the parties to the contract do not reside in the
same town or locality”.
14
Substituted by the Securities Laws (Amendment) Act, 2004 (w.e.f. 12-10-2004). Prior to its substitution,
clause(j) read as under:
(j) " 'stock exchange' means any body of individuals, whether incorporated or not, constituted for the
purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities."
15
[Interpretation of certain words and expressions.
2A. Words and expressions used herein and not defined in this Act but defined in the
Companies Act, 1956 (1 of 1956) or the Securities and Exchange Board of India Act,
1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) shall have the same
meanings respectively assigned to them in those Acts.]
RECOGNISED STOCK EXCHANGES
Application for recognition of stock exchanges.

3. (1) Any stock exchange, which is desirous of being recognised for the purposes of this
Act, may make an application in the prescribed manner to the Central Government.
(2) Every application under sub-section (1) shall contain such particulars as may be
prescribed, and shall be accompanied by a copy of the bye-laws of the stock exchange for
the regulation and control of contracts and also a copy of the rules relating in general to
the constitution of the stock exchange and in particular, to—
(a) the governing body of such stock exchange, its constitution and powers of
management and the manner in which its business is to be transacted;
(b) the powers and duties of the office bearers of the stock exchange;
(c) the admission into the stock exchange of various classes of members, the
qualifications for membership, and the exclusion, suspension, expulsion and re-
admission of members therefrom or thereinto;
(d) the procedure for the registration of partnerships as members of the stock exchange
in cases where the rules provide for such membership; and the nomination and
appointment of authorised representatives and clerks.
Grant of recognition to stock exchanges.

4. (1) If the Central Government is satisfied, after making such inquiry as may be
necessary in this behalf and after obtaining such further information, if any, as it may
require,—
(a) that the rules and bye-laws of a stock exchange applying for registration are in
conformity with such conditions as may be prescribed with a view to ensure fair
dealing and to protect investors;
(b) that the stock exchange is willing to comply with any other conditions (including
conditions as to the number of members) which the Central Government, after
consultation with the governing body of the stock exchange and having regard to
the area served by the stock exchange and its standing and the nature of the
securities dealt with by it, may impose for the purpose of carrying out the objects
of this Act; and
15
Inserted by Act 32 of 1999, S. 3 (w.e.f. 16-12-1999).
(c) that it would be in the interest of the trade and also in the public interest to grant
recognition to the stock exchange;
it may grant recognition to the stock exchange subject to the conditions imposed upon it
as aforesaid and in such form as may be prescribed.
(2) The conditions which the Central Government may prescribe under clause (a) of sub-
section (1) for the grant of recognition to the stock exchanges may include, among other
matters, conditions relating to,—
(i) the qualifications for membership of stock exchanges;
(ii) the manner in which contracts shall be entered into and enforced as between
members;
(iii) the representation of the Central Government on each of the stock exchange by
such number of persons not exceeding three as the Central Government may
nominate in this behalf; and
(iv) the maintenance of accounts of members and their audit by chartered accountants
whenever such audit is required by the Central Government.
(3) Every grant of recognition to a stock exchange under this section shall be published in
the Gazette of India and also in the Official Gazette of the State in which the principal
office as of the stock exchange is situate, and such recognition shall have effect as from
the date of its publication in the Gazette of India.
(4) No application for the grant of recognition shall be refused except after giving an
opportunity to the stock exchange concerned to be heard in the matter; and the reasons
for such refusal shall be communicated to the stock exchange in writing.
(5) No rules of a recognised stock exchange relating to any of the matters specified in
sub-section (2) of section 3 shall be amended except with the approval of the Central
Government.
16
[Corporatisation and demutualisation of stock exchanges.
4A. On and from the appointed date, all recognised stock exchanges (if not corporatised
and demutualised before the appointed date) shall be corporatised and demutualised in
accordance with the provisions contained in section 4B:
Provided that the Securities and Exchange Board of India may, if it is satisfied that any
recognised stock exchange was prevented by sufficient cause from being corporatised
and demutualised on or after the appointed date, specify another appointed date in respect
of that recognised stock exchange and such recognised stock exchange may continue as
such before such appointed date.
Explanation.— For the purposes of this section, “appointed date” means the date which
the Securities and Exchange Board of India may, by notification in the Official Gazette,
appoint and different appointed dates may be appointed for different recognised stock
exchanges.
16
Inserted by the Securities Laws (Amendment) Act, 2004, S.3 (w.e.f. 12-10-2004).
Procedure for corporatisation and demutualisation.
4B. (1) All recognised stock exchanges referred to in section 4A shall, within such time
asmay be specified by the Securities and Exchange Board of India, submit a scheme for
corporatisation and demutualisation for its approval:
Provided that the Securities and Exchange Board of India, may, by notification in the
Official Gazette, specify name of the recognised stock exchange, which had already been
corporatised and demutualised, and such stock exchange shall not be required to submit
the scheme under this section.
(2) On receipt of the scheme referred to in sub-section (1), the Securities and Exchange
Board of India may, after making such enquiry as may be necessary in this behalf and
obtaining such further information, if any, as it may require and if it is satisfied that it
would be in the interest of the trade and also in the public interest, approve the scheme
with or without modification.
(3) No scheme under sub-section (2) shall be approved by the Securities and Exchange
Board of India if the issue of shares for a lawful consideration or provision of trading
rights in lieu of membership card of the members of a recognised stock exchange or
payment of dividends to members have been proposed out of any reserves or assets of
that stock exchange.
(4) Where the scheme is approved under sub-section (2), the scheme so approved shall be
published immediately by—
(a) the Securities and Exchange Board of India in the Official Gazette;
(b) the recognised stock exchange in such two daily newspapers circulating in India, as
may be specified by the Securities and Exchange Board of India,
and upon such publication, notwithstanding anything to the contrary contained in this Act
or any other law for the time being in force or any agreement, award, judgment, decree or
other instrument for the time being in force, the scheme shall have effect and be binding
on all persons and authorities including all members, creditors, depositors and employees
of the recognised stock exchange and on all persons having any contract, right, power,
obligation or liability with, against, over, to, or in connection with, the recognised stock
exchange or its members.
(5) Where the Securities and Exchange Board of India is satisfied that it would not be in
the interest of the trade and also in the public interest to approve the scheme under sub-
section (2), it may, by an order, reject the scheme and such order of rejection shall be
published by it in the Official Gazette:
Provided that the Securities and Exchange Board of India shall give a reasonable
opportunity of being heard to all the persons concerned and the recognised stock
exchange concerned before passing an order rejecting the scheme.
(6) The Securities and Exchange Board of India may, while approving the scheme under
sub-section (2), by an order in writing, restrict—
(a) the voting rights of the shareholders who are also stock brokers of the recognised
stock exchange;
(b) the right of shareholders or a stock broker of the recognised stock exchange to
appoint the representatives on the governing board of the stock exchange;
(c) the maximum number of representatives of the stock brokers of the recognised
stock exchange to be appointed on the governing board of the recognised stock
exchange, which shall not exceed one-fourth of the total strength of the governing
board.
(7) The order made under sub-section (6) shall be published in the Official Gazette and
on the publication thereof, the order shall, notwithstanding anything to the contrary
contained in the Companies Act, 1956 (1 of 1956), or any other law for the time being in
force, have full effect.
(8) Every recognised stock exchange, in respect of which the scheme for corporatisation
or demutualisation has been approved under sub-section (2), shall, either by fresh issue of
equity shares to the public or in any other manner as may be specified by the regulations
made by the Securities and Exchange Board of India, ensure that at least fifty-one per
cent of its equity share capital is held, within twelve months from the date of publication
of the order under sub-section (7), by the public other than shareholders having trading
rights:
Provided that the Securities and Exchange Board of India may, on sufficient cause being
shown to it and in the public interest, extend the said period by another twelve months.]
Withdrawal of recognition.
5.17 [(1)] If the Central Government is of opinion that the recognition granted to a stock
exchange under the provisions of this Act should, in the interest of the trade or in the
public interest, be withdrawn, the Central Government may serve on the governing body
of the stock exchange a written notice that the Central Government is considering the
withdrawal of the recognition for the reasons stated in the notice and after giving an
opportunity to the governing body to be heard in the matter, the Central Government may
withdraw, by notification in the Official Gazette, the recognition granted to the stock
exchange:
Provided that no such withdrawal shall affect the validity of any contract entered into or
made before the date of the notification, and the Central Government may, after
consultation with the stock exchange, make such provision as it deems fit in the
notification of withdrawal or in any subsequent notification similarly published for the
due performance of any contracts outstanding on that date.
[(2) Where the recognised stock exchange has not been corporatised or demutualised or
it fails to submit the scheme referred to in sub-section (1) of section 4B within the
specified time therefor or the scheme has been rejected by the Securities and Exchange
Board of India under sub-section (5) of section 4B, the recognition granted to such stock
exchange under section 4, shall, notwithstanding anything to the contrary contained in
this Act, stand withdrawn and the Central Government shall publish, by notification in
the Official Gazette, such withdrawal of recognition:
17
Section 5 renumbered as sub-sec (1) thereof and sub-sec (2) inserted by the Securities Laws
(Amendment) Act, 2004, S. 4 (w.e.f. 12-10-2004).
Provided that no such withdrawal shall affect the validity of any contract entered into or
made before the date of the notification, and the Securities and Exchange Board of India
may, after consultation with the stock exchange, make such provisions as it deems fit in
the order rejecting the scheme published in the Official Gazette under sub-section (5) of
section 4B.]
Power of Central Government to call for periodical returns or direct inquiries to be

made.
6. (1) Every recognised stock exchange shall furnish to the 18[Securities and Exchange
Board of India] such periodical returns relating to its affairs as may be prescribed.
(2) Every recognised stock exchange and every member thereof shall maintain and
preserve for such periods not exceeding five years such books of account, and other
documents as the Central Government, after consultation with the stock exchange
concerned, may prescribe in the interest of the trade or in the public interest, and such
books of account, and other documents shall be subject to inspection at all reasonable
times by the 19[Securities and Exchange Board of India].
(3) Without prejudice to the provisions contained in sub-sections (1) and (2), the
20
[Securities and Exchange Board of India], if it is satisfied that it is in the interest of the
trade or in the public interest so to do, may, by order in writing,—
(a) call upon a recognised stock exchange or any member thereof to furnish in writing
such information or explanation relating to the affairs of the stock exchange or of
the member in relation to the stock exchange as the 21[Securities and Exchange
Board of India] may require; or
(b) appoint one or more persons to make an inquiry in the prescribed manner in
relation to the affairs of the governing body of a stock exchange or the affairs of
any of the members of the stock exchange in relation to the stock exchange and
submit a report of the result of such inquiry to the 22[Securities and Exchange
Board of India] within such time as may be specified in the order or, in the case of
an inquiry in relation to the affairs of any of the members of a stock exchange,
direct the governing body to make the inquiry and submit its report to the
23
[Securities and Exchange Board of India].
(4) Where an inquiry in relation to the affairs of a recognised stock exchange or the
affairs of any of its members in relation to the stock exchange has been undertaken under
sub-section (3),—
(a) every director, manager, secretary or other officer of such stock exchange;
(b) every member of such stock exchange;
(c) if the member of the stock exchange is a firm, every partner, manager, secretary or
18
Substituted by Act 15 of 1992, S.33 and sch., for “Central Government” (w.e.f. 30-01-
1992)
19
ibid
20
ibid
21
ibid
22
ibid
23
ibid
other officer of the firm; and
(d) every other person or body of persons who has had dealings in the course of
business with any of the persons mentioned in clauses (a), (b) and (c), whether
directly or indirectly;
shall be bound to produce before the authority making the inquiry all such books of
account, and other documents in his custody or power relating to or having a bearing on
the subject-matter of such inquiry and also to furnish the authorities within such time as
may be specified with any such statement or information relating thereto as may be
required of him.
Annual reports to be furnished to Central Government by stock exchanges.

7. Every recognised stock exchange shall furnish the Central Government with a copy of
the annual report, and such annual report shall contain such particulars as may be
prescribed.
24
[Power of recognised stock exchange to make rules restricting voting rights, etc.
7A. (1) A recognised stock exchange may make rules or amend any rules made by it to
provide for all or any of the following matters, namely:—
(a) the restriction of voting rights to members only in respect of any matter placed
before the stock exchange at any meeting;
(b) the regulation of voting rights in respect of any matter placed before the stock
exchange at any meeting so that each member may be entitled to have one vote
only, irrespective of his share of the paid-up equity capital of the stock exchange;
(c) the restriction on the right of a member to appoint another person as his proxy to
attend and vote at a meeting of the stock exchange;
(d) such incidental, consequential and supplementary matters as may be necessary to
give effect to any of the matters specified in clauses (a), (b) and (c).
(2) No rules of a recognised stock exchange made or amended in relation to any matter
referred to in clauses (a) to (d) of sub-section (1) shall have effect until they have been
approved by the Central Government and published by that Government in the Official
Gazette and, in approving the rules so made or amended, the Central Government may
make such modifications therein as it thinks fit, and on such publication, the rules as
approved by the Central Government shall be deemed to have been validly made,
notwithstanding anything to the contrary contained in the Companies Act, 1956 (1 of
1956)].
Power of Central Government to direct rules to be made or to make rules.

8. (1) Where, after consultation with the governing bodies of stock exchanges generally
or with the governing body of any stock exchange in particular, the Central Government
24
Inserted by Act 49 of 1959, S. 2.
is of opinion that it is necessary or expedient so to do, it may, by order in writing together
with a statement of the reasons therefore, direct recognised stock exchanges generally or
any recognised stock exchange in particular, as the case may be, to make any rules or to
amend any rules already made in respect of all or any of the matters specified in sub-
section (2) of section 3 within a period of 25[two] months from the date of the order.
(2) If any recognised stock exchange fails or neglects to comply with any order made
under sub-section (1) within the period specified therein, the Central Government may
make the rules for, or amend the rules made by, the recognised stock exchange, either in
the form proposed in the order or with such modifications thereof as may be agreed to
between the stock exchange and the Central Government.
(3) Where in pursuance of this section any rules have been made or amended, the rules so
made or amended shall be published in the Gazette of India and also in the Official
Gazette or Gazettes of the State or States in which the principal office or offices of the
recognised stock exchange or exchanges is or are situate, and, on the publication thereof
in the Gazette of India, the rules so made or amended shall, notwithstanding anything to
the contrary contained in the Companies Act, 1956 (1 of 1956), or in any other law for
the time being in force, have effect as if they had been made or amended by the
recognised stock exchange or stock exchanges, as the case may be.
26
[Clearing corporation.
8A. (1) A recognised stock exchange may, with the prior approval of the Securities and
Exchange Board of India, transfer the duties and functions of a clearing house to a
clearing corporation, being a company incorporated under the Companies Act, 1956 (1 of
1956), for the purpose of—
(a) the periodical settlement of contracts and differences there under;
(b) the delivery of, and payment for, securities;
(c) any other matter incidental to, or connected with, such transfer.
(2) Every clearing corporation shall, for the purpose of transfer of the duties and
functions of a clearing house to a clearing corporation referred to in sub-section (1), make
bye-laws and submit the same to the Securities and Exchange Board of India for its
approval.
(3) The Securities and Exchange Board of India may, on being satisfied that it is in the
interest of the trade and also in the public interest to transfer the duties and functions of a
clearing house to a clearing corporation, grant approval to the bye-laws submitted to it
under sub-section (2) and approve the transfer of the duties and functions of a clearing
house to a clearing corporation referred to in sub-section (1).
(4) The provisions of sections 4, 5, 6, 7, 8, 9, 10, 11 and 12 shall, as far as may be, apply
to a clearing corporation referred to in sub-section (1) as they apply in relation to a
recognised stock exchange.]
25
Substituted by Act 9 of 1995, S. 19 (w.e.f. 25-01-1995) for ”six months”.
26
Power of recognised stock exchanges to make bye-laws.
9. (1) Any recognised stock exchange may, subject to the previous approval of the
27
[Securities and Exchange Board of India], make bye-laws for the regulation and control
of contracts.
(2) In particular, and without prejudice to the generality of the foregoing power, such
bye-laws may provide for:
(a) the opening and closing of markets and the regulation of the hours of trade;
(b) a clearing house for the periodical settlement of contracts and differences
thereunder, the delivery of and payment for securities, the passing on of delivery
orders and the regulation and maintenance of such clearing house;
(c) the submission to the 28[Securities and Exchange Board of India] by the clearing
house as soon as may be after each periodical settlement of all or any of the
following particulars as the 29[Securities and Exchange Board of India] may, from
time to time, require, namely:—
(i) the total number of each category of security carried over from one
settlement period to another;
(ii) the total number of each category of security, contracts in respect of which
have been squared up during the course of each settlement period;
(iii) the total number of each category of security actually delivered at each
clearing;
(d) the publication by the clearing house of all or any of the particulars submitted to
the 30[Securities and Exchange Board of India] under clause (c) subject to the
directions, if any, issued by the 31[Securities and Exchange Board of India] in this
behalf;
(e) the regulation or prohibition of blank transfers;
(f) the number and classes of contracts in respect of which settlements shall be made
or differences paid through the clearing house;
(g) the regulation, or prohibition of budlas or carry-over facilities;
(h) the fixing, altering or postponing of days for settlements;
(i) the determination and declaration of market rates, including the opening, closing
highest and lowest rates for securities;
(j) the terms, conditions and incidents of contracts, including the prescription of
margin requirements, if any, and conditions relating thereto, and the forms of
contracts in writing;
(k) the regulation of the entering into, making, performance, recession and termination,
of contracts, including contracts between members or between a member and his
constituent or between a member and a person who is not a member, and the
27
Substituted by Act 15 of 1992. S.33 and Sch., for “Central Government” (w.e.f. 30-01- 1992).
28
ibid
29
ibid
30
ibid
31
ibid
consequences of default or insolvency on the part of a seller or buyer or
intermediary, the consequences of a breach or omission by a seller or buyer, and
the responsibility of members who are not parties to such contracts;
(l) the regulation of taravani business including the placing of limitations thereon;
(m) the listing of securities on the stock exchange, the inclusion of any security for the
purpose of dealings and the suspension or withdrawal of any such securities, and
the suspension or prohibition of trading in any specified securities;
(n) the method and procedure for the settlement of claims or disputes, including
settlement by arbitration;
(o) the levy and recovery of fees, fines and penalties;
(p) the regulation of the course of business between parties to contracts in any
capacity;
(q) the fixing of a scale of brokerage and other charges;
(r) the making, comparing, settling and closing of bargains;
(s) the emergencies in trade which may arise, whether as a result of pool or syndicated
operations or cornering or otherwise, and the exercise of powers in such
emergencies, including the power to fix maximum and minimum prices for
securities;
(t) the regulation of dealings by members for their own account;
(u) the separation of the functions of jobbers and brokers;
(v) the limitations on the volume of trade done by any individual member in
exceptional circumstances;
(w) the obligation of members to supply such information or explanation and to
produce such documents relating to the business as the governing body may
require.
(3) The bye-laws made under this section may—
(a) specify the bye-laws the contravention of which shall make a contract entered into
otherwise than in accordance with the bye-laws void under sub-section (1) of
section 14;
(b) provide that the contravention of any of the bye-laws shall render the member
concerned liable to one or more of the following punishments, namely:—
(i) fine,
(ii) expulsion from membership,
(iii) suspension from membership for a specified period,
(iv) any other penalty of a like nature not involving the payment of money.
(4) Any bye-laws made under this section shall be subject to such conditions in regard to
previous publication as may be prescribed, and, when approved by the 32[Securities and
Exchange Board of India], shall be published in the Gazette of India and also in the
Official Gazette of the State in which the principal office of the recognised stock
32
exchange is situate, and shall have effect as from the date of its publication in the Gazette
of India:
Provided that if the 33[Securities and Exchange Board of India] is satisfied in any case
that in the interest of the trade or in the public interest any bye-law should be made
immediately, it may, by order in writing specifying the reasons therefore, dispense with
the condition of previous publication.
Power of 34[Securities and Exchange Board of India] to make or amend bye-laws of

recognised stock exchanges.
10. (1) The Securities and Exchange Board of India may, either on a request in writing
received by it in this behalf from the governing body of a recognised stock exchange or
on its own motion, if it is satisfied after consultation with the governing body of the stock
exchange that it is necessary or expedient so to do and after recording its reasons for so
doing, make bye-laws for all or any of the matters specified in section 9 or amend any
bye-laws made by such stock exchange under that section.
(2) Where in pursuance of this section any bye-laws have been made or amended the bye-
laws so made or amended shall be published in the Gazette of India and also in the
Official Gazette of the State in which the principal office of the recognised stock
exchange is situate, and on the publication thereof in the Gazette of India, the bye-laws so
made or amended shall have effect as if they had been made or amended by the
recognised stock exchange concerned.
(3) Notwithstanding anything contained in this section, where the governing body of a
recognised stock exchange objects to any bye-laws made or amended under this section
by the 35[Securities and Exchange Board of India] on its own motion, it may, within
36
[two] months of the publication thereof in the Gazette of India under sub-section (2),
apply to the 37[Securities and Exchange Board of India] for revision thereof, and the
38
[Securities and Exchange Board of India] may, after giving an opportunity to the
governing body of the stock exchange to be heard in the matter, revise the bye-laws so
made or amended, anywhere any bye-laws so made or amended are revised as a result of
any action taken under this sub-section, the bye-laws so revised shall be published and
shall become effective as provided in sub-section (2).
(4) The making or the amendment or revision of any bye-laws under this section shall in
all cases be subject to the condition of previous publication:
Provided that if the 39 [Securities and Exchange Board of India] is satisfied in any case
that in the interest of the trade or in the public interest any bye-laws should be made,
amended or revised immediately, it may, by order in writing specifying the reasons
therefore, dispense with the condition of previous publication.
33
34
ibid
35
ibid
36
Substituted by Act 9 of 1995, S.20 for “six months” (w.e.f. 25-10-1995).
37
ibid
38
ibid
39
ibid
Power of Central Government to supersede governing body of a recognised stock
exchange.
11. (1) Without prejudice to any other powers vested in the Central Government under
this Act, where the Central Government is of opinion that the governing body of any
recognised stock exchange should be superseded, then, notwithstanding anything
contained in any other law for the time being in force, in the Central Government may
serve on the governing body a written notice that the Central Government is considering
the supersession of the governing body for the reasons specified in the notice and after
giving an opportunity to the governing body to be heard in the matter, it may, by
notification in the Official Gazette, declare the governing body of such stock exchange to
be superseded, and may appoint any person or persons to exercise and perform all the
powers and duties of the governing body, and, where more persons than one are
appointed, may appoint one of such persons to be the chairman and another to be the
vice-chairman thereof.
(2) On the publication of a notification in the Official Gazette under sub-section (1), the
following consequences shall ensue, namely:—
(a) the members of the governing body which has been superseded shall, as from the
date of the notification of supersession, cease to hold office as such members;
(b) the person or persons appointed under sub-section (1) may exercise and perform all
the powers and duties of the governing body which has been superseded;
(c) all such property of the recognised stock exchange as the person or persons
appointed under sub-section (1) may, by order in writing, specify in this behalf as
being necessary for the purpose of enabling him or them to carry on the business of
the stock exchange, shall vest in such person or persons.
(3) Notwithstanding anything to the contrary contained in any law or the rules or bye-
laws of the recognised stock exchange the governing body of which is superseded under
sub-section (1), the person or persons appointed under that sub-section shall hold office
for such period as may be specified in the notification published under that sub-section
and the Central Government may from time to time, by like notification, vary such
period.
(4) The Central Government may at any time before the determination of the period of
office of any person or persons appointed under this section call upon the recognised
stock exchange to re-constitute the governing body in accordance with its rules and on
such re-constitution all the property of the recognised stock exchange which has vested
in, or was in the possession of, the person or persons appointed under sub-section (1),
shall re-vest or vest, as the case may be, in the governing body so re-constituted:
Provided that until a governing body is so re-constituted, the person or persons appointed
under sub-section (1) shall continue to exercise and perform their powers and duties.
Power to suspend business of recognised stock exchanges.

12. If in the opinion of the Central Government an emergency has arisen and for the
purpose of meeting the emergency the Central Government considers it expedient so to
do, it may, by notification in the Official Gazette, for reasons to be set out therein, direct
a recognised stock exchange to suspend such of its business for such period not
exceeding seven days and subject to such conditions as may be specified in the
notification, and, if, in the opinion of the Central Government, the interest of the trade or
the public interest requires that the period should be extended, may, by like notification
extend the said period from time to time:
Provided that where the period of suspension is to be extended beyond the first period,
no notification extending the period of suspension shall be issued unless the governing
body of the 40[recognised stock exchange] has been given an opportunity of being heard
in the matter.
41
[Power to issue directions.
12A. If, after making or causing to be made an inquiry, the Securities and Exchange
Board of India is satisfied that it is necessary—
(a) in the interest of investors, or orderly development of securities market; or
(b) to prevent the affairs of any recognised stock exchange or clearing corporation, or
such other agency or person, providing trading or clearing or settlement facility in
respect of securities, being conducted in a manner detrimental to the interests of
investors or securities market; or
(c) to secure the proper management of any such stock exchange or clearing
corporation or agency or person, referred to in clause (b),
it may issue such directions,—
(i) to any stock exchange or clearing corporation or agency or person referred to in
clause (b) or any person or class of persons associated with the securities market;
or
(ii) to any company whose securities are listed or proposed to be listed in a recognised
stock exchange,
as may be appropriate in the interests of investors in securities and the securities market.]
CONTRACTS AND OPTIONS IN SECURITIES
Contracts in notified areas illegal in certain circumstances.

13. If the Central Government is satisfied, having regard to the nature or the volume of
transactions in securities in any 42[State or States or area] that it is necessary so to do, it
may, by notification in the Official Gazette, declared this section to apply to such 43 [State
or States or area], and thereupon every contract in such 44 [State or States or area] which
40
Substituted by Act 56 of 1974, S.3 and Sch. II, for “recognized association” (w.e.f. 20-12-1974).
41
42
Substituted by the Securities Laws (Amendment) Act, 2004, S.7, for “state or area”(w.e.f. 12-10-2004)
43
ibid
44
ibid
is entered into after the date of the notification otherwise than 45 [between the members of
a recognised stock exchange or recognised stock exchanges] in such 46[State or States or
area] or through or with such member shall be illegal:
47
[Provided that any contract entered into between members of two or more recognised
stock exchanges in such State or States or area, shall—
(i) be subject to such terms and conditions as may be stipulated by the respective stock
exchanges with prior approval of Securities and Exchange Board of India;
(ii) require prior permission from the respective stock exchanges if so stipulated by the
stock exchanges with prior approval of Securities and Exchange Board of India.]
48
[Additional trading floor.
13A. A stock exchange may establish additional trading floor with the prior approval of
the Securities and Exchange Board of India in accordance with the terms and conditions
stipulated by the said Board.
Explanation: For the purposes of this section, “additional trading floor” means a trading
ring or trading facility offered by a recognised stock exchange outside its area of
operation to enable the investors to buy and sell securities through such trading floor
under the regulatory framework of that stock exchange.]
Contracts in notified areas to be void in certain circumstances.

14. (1) Any contract entered into in any State or area specified in the notification under
section 13 which is in contravention of any of the bye-laws specified in that behalf under
clause (a) of sub-section (3) of section 9 shall be void:
(i) as respects the rights of any member of the recognised stock exchange who has
entered into such contract in contravention of any such bye-law, and also
(ii) as respects the rights of any other person who has knowingly participated in the
transaction entailing such contravention.
(2) Nothing in sub-section (1) shall be construed to affect the right of any person other
than a member of the recognised stock exchange to enforce any such contract or to
recover any sum under or in respect of such contract if such person had no knowledge
that the transaction was in contravention of any of the bye-laws specified in clause (a) of
sub-section (3) of section 9.
Members may not act as principals in certain circumstances.

15. No member of a recognised stock exchange shall in respect of any securities enter
into any contract as a principal with any person other than a member of a recognised
stock exchange, unless he has secured the consent or authority of such person and
45
Substituted by the Securities Laws (Amendment) Act, 2004, S.7, for “between members of a recognized
stock exchange” (w.e.f. 12-10-2004).
46
ibid
47
Substituted by the Securities Laws (Amendment) Act, 2004, S.7 (w.e.f. 12-10-2004).
48
Inserted by Act 9 of 1995, S.21 (w.e.f. 25-01-1995).
discloses in the note, memorandum or agreement of sale or purchase that he is acting as a
principal:
Provided that where the member has secured the consent or authority of such person
otherwise than in writing he shall secure written confirmation by such person or such
consent or authority within three days from the date of the contract:
Provided further that no such written consent or authority of such person shall be
necessary for closing out any outstanding contract entered into by such person in
accordance with the bye-laws, if the member discloses in the note, memorandum or
agreement of sale or purchase in respect of such closing out that he is acting as a
principal.
Power to prohibit contracts in certain cases.

16. (1) If the Central Government is of opinion that it is necessary to prevent undesirable
speculation in specified securities in any State or area, it may, by notification in the
Official Gazette, declare that no person in the State or area specified in the notification
shall, save with the permission of the Central Government, enter into any contract for the
sale or purchase of any security specified in the notification except to the extent and in
the manner, if any, specified therein.
(2) All contracts in contravention of the provisions of sub-section (1) entered into after
the date of notification issued thereunder shall be illegal.
Licensing of dealers in securities in certain areas.

17. (1) Subject to the provisions of sub-section (3) and to the other provisions contained
in this Act, no person shall carry on or purport to carry on, whether on his own behalf or
on behalf of any other person, the business of dealing in securities in any State or area to
which section 13 has not been declared to apply and to which the Central Government
may, by notification in the Official Gazette, declare this section to apply, except under
the authority of a 49 [licence granted by the Securities and Exchange Board of India] in
this behalf.
(2) No notification under sub-section (1) shall be issued with respect to any State or area
unless the Central Government is satisfied, having regard to the manner in which
securities are being dealt with in such State or area, that it is desirable or expedient in the
interest of the trade or in the public interest that such dealings should be regulated by a
system of licensing.
(3) The restrictions imposed by sub-section (1) in relation to dealings in securities shall
not apply to the doing of anything by or on behalf of a member of any recognised stock
exchange.
49
Substituted by Act 15 of 1992, S.33 and Sch., for “licence granted by the Central Government” (w.e.f.
30-01-1992)
Exclusion of spot delivery contracts from sections 13, 14, 15 and 17.
18. (1) Nothing contained in sections 13, 14, 15 and 17 shall apply to spot delivery
contracts.
(2) Notwithstanding anything contained in sub-section (1), if the Central Government1 is
of opinion that in the interest of the trade or in the public interest it is expedient to
regulate and control the business of dealing in spot delivery contracts also in any State or
area (whether section 13 has been declared to apply to that State or area or not), it may,
by notification in the Official Gazette, declare that the provisions of section 17 shall also
apply to such State or area in respect of spot delivery contracts generally or in respect of
spot delivery contracts for the sale or purchase of such securities as may be specified in
the notification, and may also specify the manner in which, and the extent to which, the
provisions of that section shall so apply.
50
[Contracts in derivative.
18A. Notwithstanding anything contained in any other law for the time being in force,
contracts in derivative shall be legal and valid if such contracts are—
(a) traded on a recognised stock exchange;
(b) settled on the clearing house of the recognised stock exchange,
in accordance with the rules and bye-laws of such stock exchange.]
Stock exchanges other than recognised stock exchanges prohibited.

19. (1) No person shall, except with the permission of the Central Government, organise
or assist in organising or be a member of any stock exchange (other than a recognised
stock exchange) for the purpose of assisting in, entering into or performing any contracts
in securities.
(2) This section shall come into force in any State or area on such date as the Central
Government may, by notification in the Official Gazette, appoint.
Prohibition of options in securities.

20. 51[***]
50
Inserted by Act31 of 1999, S.3 (w.e.f. 22-02-2000). Prior to omission Section 20 read as under;
“Prohibition of options in securities-(1)Notwithstanding anything contained in this act or in other law for
the time being in force, all options in securities entered into after the commencement of this act shall be
illegal.
(2) Any option in securities which has been entered into before such commence and which remains to be
performed , whether wholly or in part, after such commencement shall, to this extend, become void.”
51
Omitted by Securities Laws (Amendment) Act, 1995, S.22 (w.e.f. 25-01-1995).
LISTING OF SECURITIES 52 [***]
53
[Conditions for listing.
21. Where securities are listed on the application of any person in any recognised stock
exchange, such person shall comply with the conditions of the listing agreement with that
stock exchange.]
54
[Delisting of securities.
21A. (1) A recognised stock exchange may delist the securities, after recording the
reasons therefore, from any recognised stock exchange on any of the ground or grounds
as may be prescribed under this Act:
Provided that the securities of a company shall not be delisted unless the company
concerned has been given a reasonable opportunity of being heard.
(2) A listed company or an aggrieved investor may file an appeal before the Securities
Appellate Tribunal against the decision of the recognised stock exchange delisting the
securities within fifteen days from the date of the decision of the recognised stock
exchange delisting the securities and the provisions of sections 22B to 22E of this Act,
shall apply, as far as may be, to such appeals:
Provided that the Securities Appellate Tribunal may, if it is satisfied that the company
was prevented by sufficient cause from filing the appeal within the said period, allow it to
be filed within a further period not exceeding one month.]
Right of appeal against refusal of stock exchanges to list securities of public

companies.
22. Where a recognised stock exchange acting in pursuance of any power given to it by
its bye-laws, refuses to list the securities of any public company 55[or collective
investment scheme], the company 56[or scheme] shall be entitled to be furnished with
reasons for such refusal, and may,—
(a) within fifteen days from the date on which the reasons for such refusal are
furnished to it, or
(b) where the stock exchange has omitted or failed to dispose of, within the time
52
The words “BY PUBLIC COMPANIES” omitted by Act 31 of 1999, S.4(w.e.f. 22-02-2000).
53
Substituted by the Securities Laws (Amendment) Act, 1995 w.e.f. 25.01.1995. Prior to its substitution
section 21 read as under;
“Power to compel listing of securities by public companies.- Notwithstanding anything contained in any
other law for the time being in force, if the Securities and Exchange Board of India is of opinion, having
regard to the nature of the securities issued by any public company regard to the nature of the securities
issued by any public company as defined in the Companies Act, 1956 (1 of 1956), or to the dealings in
them, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it may
require the company, after giving it an opportunity of being heard in the matter, to comply with such
requirements as may be prescribed with respect to the listing of its securities on any recognised stock
exchange.”
54
55
Substituted by Act 41 of 1974, S.42, for S.22 (w.e.f. 01-04-1975).
56
specified in sub-section (1) of section 73 of the Companies Act, 1956 (1 of 1956)
(hereafter in this section referred to as the “specified time”), the application for
permission for the shares or debentures to be dealt with on the stock exchange,
within fifteen days from the date of expiry of the specified time or within such
further period, not exceeding one month, as the Central Government may, on
sufficient cause being shown, allow,
appeal to the Central Government against such refusal, omission or failure, as the case
may be, and thereupon the Central Government may, after giving the stock exchange an
opportunity of being heard,—
(i) vary or set aside the decision of the stock exchange, or
(ii) where the stock exchange has omitted or failed to dispose of the application within
the specified time, grant or refuse the permission,
and where the Central Government sets aside the decision of the recognised stock
exchange or grants the permission, the stock exchange shall act in conformity with the
orders of the Central Government:
57
[Provided that no appeal shall be preferred against refusal, omission or failure, as the
case may be, under this section on and after the commencement of the Securities Laws
(Second Amendment) Act, 1999.]
58
[Right of appeal to Securities Appellate Tribunal against refusal of stock exchange
to list securities of public companies.
22A. (1) Where a recognised stock exchange, acting in pursuance of any power given to
it by its bye-laws, refuses to list the securities of any company, the company shall be
entitled to be furnished with reasons for such refusal, and may,—
(a) within fifteen days from the date on which the reasons for such refusal are
furnished to it, or
(b) where the stock exchange has omitted or failed to dispose of, within the time
specified in sub-section (1A) of section 73 of the Companies Act, 1956 (1 of 1956),
(hereafter in this section referred to as the “specified time”), the application for
permission for the shares or debentures to be dealt with on the stock exchange,
within fifteen days from the date of expiry of the specified time or within such
further period, not exceeding one month, as the Securities Appellate Tribunal may,
on sufficient cause being shown, allow,
appeal to the Securities Appellate Tribunal having jurisdiction in the matter against such
refusal, omission or failure, as the case may be, and thereupon the Securities Appellate
Tribunal may, after giving the stock exchange, an opportunity of being heard,—
(i) vary or set aside the decision of the stock exchange; or
(ii) where the stock exchange has omitted or failed to dispose of the application within
the specified time, grant or refuse the permission,
and where the Securities Appellate Tribunal sets aside the decision of the recognised
57
58
ibid
stock exchange or grants the permission, the stock exchange shall act in conformity with
the orders of the Securities Appellate Tribunal.
(2) Every appeal under sub-section (1) shall be in such form and be accompanied by such
fee as may be prescribed.
(3) The Securities Appellate Tribunal shall send a copy of every order made by it to the
Board and parties to the appeal.
(4) The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall
be dealt with by it as expeditiously as possible and endeavour shall be made by it to
dispose of the appeal finally within six months from the date of receipt of the appeal.
Procedure and powers of Securities Appellate Tribunal.

22B. (1) The Securities Appellate Tribunal shall not be bound by the procedure laid down
by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of
natural justice and, subject to the other provisions of this Act and of any rules, the
Securities Appellate Tribunal shall have powers to regulate their own procedure
including the places at which they shall have their sittings.
(2) The Securities Appellate Tribunal shall have, for the purpose of discharging their
functions under this Act, the same powers as are vested in a civil court under the Code of
Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters,
namely:—
(a) summoning and enforcing the attendance of any person and examining him on
oath;
(f) dismissing an application for default or deciding it ex parte;
(g) setting aside any order of dismissal of any application for default or any order
passed by it ex parte; and
(3) Every proceeding before the Securities Appellate Tribunal shall be deemed to be a
judicial proceeding within the meaning of sections 193 and 228, and for the purposes of
section 196 of the Indian Penal Code (45 of 1860) and the Securities Appellate Tribunal
shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI
of the Code of Criminal Procedure, 1973 (2 of 1974).
Right to legal representation.

22C. The appellant may either appear in person or authorise one or more chartered
accountants or company secretaries or cost accountants or legal practitioners or any of its
officers to present his or its case before the Securities Appellate Tribunal.
Explanation.— For the purposes of this section,—
(a) “chartered accountant” means a chartered accountant as defined in clause (b) of
sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949)
and who has obtained a certificate of practice under sub-section (1) of section 6 of
that Act;
(b) “company secretary” means a company secretary as defined in clause (c) of sub-
section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and
who has obtained a certificate of practice under sub-section (1) of section 6 of that
Act;
(c) “cost accountant” means a cost accountant as defined in clause (b) of sub-section
(1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and
who has obtained a certificate of practice under sub-section (1) of section 6 of that
Act;
(d) “legal practitioner” means an advocate, vakil or an attorney of any High Court, and
includes a pleader in practice.
Limitation.
22D. The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be,
apply to an appeal made to a Securities Appellate Tribunal.
Civil court not to have jurisdiction.

22E. No civil court shall have jurisdiction to entertain any suit or proceeding in respect of
any matter which a Securities Appellate Tribunal is empowered by or under this Act to
determine and no injunction shall be granted by any court or other authority in respect of
any action taken or to be taken in pursuance of any power conferred by or under this Act.
59
[Appeal to Supreme Court.
22F. Any person aggrieved by any decision or order of the Securities Appellate Tribunal
may file an appeal to the Supreme Court within sixty days from the date of
communication of the decision or order of the Securities Appellate Tribunal to him on
any question of law arising out of such order:
Provided that the Supreme Court may, if it is satisfied that the appellant was prevented
by sufficient cause from filing the appeal within the said period, allow it to be filed within
a further period not exceeding sixty days.]
59
Substituted vide The Securities Laws (Amendment) Act, 2004 (w.e.f. 12-10-2004).Earlier Section 22F
read as under;
"Any person aggrieved by any decision or order of the Securities Appellate Tribunal may file an appeal to
the High Court within sixty days from the date of communication of the decision or order of the Securities
Appellate Tribunal to him on any question of fact or law arising out of such order".
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal within the said period, allow it to filed within a further period not exceeding sixty days.”
PENALTIES AND PROCEDURE
Penalties.
23. (1) Any person who—
(a) without reasonable excuse (the burden of proving which shall be on him) fails to
comply with any requisition made under sub-section (4) of section 6; or
(b) enters into any contract in contravention of any of the provisions contained in
section 13 or section 16; or
(c) contravenes the provisions contained in section 17, or section 19; or
60
[(d) enters into any contract in derivative in contravention of section 18A or the rules
made under section 30;]
(e) owns or keeps a place other than that of a recognised stock exchange which is used
for the purpose of entering into or performing any contracts in contravention of any
of the provisions of this Act and knowingly permits such place to be used for such
purposes; or
(f) manages, controls, or assists in keeping any place other than that of a recognised
stock exchange which is used for the purpose of entering into or performing any
contracts in contravention of any of the provisions of this Act or at which contracts
are recorded or adjusted or rights or liabilities arising out of contracts are adjusted,
regulated or enforced in any manner whatsoever; or
(g) not being a member of a recognised stock exchange or his agent authorised as such
under the rules or bye-laws of such stock exchange or not being a dealer in
securities licensed under section 17 willfully represents to or induces any person to
believe that contracts can be entered into or performed under this Act through him;
or
(h) not being a member of a recognised stock exchange or his agent authorised as such
under the rules or bye-laws of such stock exchange or not being a dealer in
securities licensed under section 17, canvasses, advertises or touts in any manner
either for himself or on behalf of any other persons for any business connected with
contracts in contravention of any of the provisions of this Act; or
(i) joins, gathers or assists in gathering at any place other than the place of business
specified in the bye-laws of a recognised stock exchange any person or persons for
making bids or offers or for entering into or performing any contracts in
contravention of any of the provisions of this Act;
61
[shall, without prejudice to any award of penalty by the Adjudicating Officer under this
Act, on conviction, be punishable with imprisonment for a term which may extend to ten
years or with fine, which may extend to twenty-five crore rupees, or with both.]
60
61
Substituted for "shall, on conviction, be punishable with imprisonment for a term
which may extend to one year, or with fine, or with both." vide the The Securities Laws
(Amendment) Act, 2004.
(2) Any person who enters into any contract in contravention of the provisions contained
in section 15 62 [63{or who fails to comply with the provisions of section 21 64 [or section
21A] or with the orders of] or section 22 65 [or with the orders of the Securities Appellate
Tribunal] 66 [shall, without prejudice to any award of penalty by the Adjudicating Officer
under this Act, on conviction, be punishable with imprisonment for a term which may
extend to ten years or with fine, which may extend to twenty-five crore rupees, or with
both.]
67
[Penalty for failure to furnish information, return, etc.
23A. Any person, who is required under this Act or any rules made there under,—
(a) to furnish any information, document, books, returns or report to a recognised
stock exchange, fails to furnish the same within the time specified therefore in the
listing agreement or conditions or bye-laws of the recognised stock exchange, shall
be liable to a penalty of one lakh rupees for each day during which such failure
continues or one crore rupees, whichever is less for each such failure;
(b) to maintain books of account or records, as per the listing agreement or conditions,
or bye-laws of a recognised stock exchange, fails to maintain the same, shall be
liable to a penalty of one lakh rupees for each day during which such failure
continues or one crore rupees, whichever is less.
Penalty for failure by any person to enter into an agreement with clients.
23B. If any person, who is required under this Act or any bye-laws of a recognised stock
exchange made there under, to enter into an agreement with his client, fails to enter into
such an agreement, he shall be liable to a penalty of one lakh rupees for each day during
which such failure continues or one crore rupees, whichever is less for every such failure.
Penalty for failure to redress investors’ grievances.

23C. If any stock broker or sub-broker or a company whose securities are listed or
proposed to be listed in a recognised stock exchange, after having been called upon by
the Securities and Exchange Board of India or a recognised stock exchange in writing, to
redress the grievances of the investors, fails to redress such grievances within the time
stipulated by the Securities and Exchange Board of India or a recognised stock exchange,
he or it shall be liable to a penalty of one lakh rupees for each day during which such
failure continues or one crore rupees, whichever is less.
62
Substituted by Act 15 of 1992, S.33and Sch., for “Central Government under section 21or section 22”
(w.e.f. 30-01-1992).
63
Substituted by Act 9 of 1995, S.24, for “or who fails to comply with the orders of the Securities and
Exchange Board of India under section 21” (w.e.f. 25-01-1995).
64
Substituted by the Securities Laws (Amendment) Act, 2004, S.10, for “Section 21” (w.e.f. 12-10-2004).
65
Inserted by Act 32of 1999, S.6 (w.e.f. 16-12-1999).
66
Substituted by the Securities Laws (Amendment) Act, 2004, S.10, for “shall, on conviction, be
punishable with fine which may extend to one thousand rupees” (w.e.f. 12-10-2004).
67
Inserted by Securities Laws (Amendment) Act, 2004, S.11 (w.e.f. 12-10-2004).
Penalty for failure to segregate securities or moneys of client or clients.
23D. If any person, who is registered under section 12 of the Securities and Exchange
Board of India Act, 1992 (15 of 1992) as a stock broker or sub-broker, fails to segregate
securities or moneys of the client or clients or uses the securities or moneys of a client or
clients for self or for any other client, he shall be liable to a penalty not exceeding one
crore rupees.
Penalty for failure to comply with provision of listing conditions or delisting

conditions or grounds.
23E. If a company or any person managing collective investment scheme or mutual fund,
fails to comply with the listing conditions or delisting conditions or grounds or commits a
breach thereof, it or he shall be liable to a penalty not exceeding twenty-five crore rupees.
Penalty for excess dematerialisation or delivery of unlisted securities.

23F. If any issuer dematerialises securities more than the issued securities of a company
or delivers in the stock exchanges the securities which are not listed in the recognised
stock exchange or delivers securities where no trading permission has been given by the
recognised stock exchange, he shall be liable to a penalty not exceeding twenty-five crore
rupees.
Penalty for failure to furnish periodical returns, etc.

23G. If a recognised stock exchange fails or neglects to furnish periodical returns to the
Securities and Exchange Board of India or fails or neglects to make or amend its rules or
bye-laws as directed by the Securities and Exchange Board of India or fails to comply
with directions issued by the Securities and Exchange Board of India, such recognised
stock exchange shall be liable to a penalty which may extend to twenty-five crore rupees.
Penalty for contravention where no separate penalty has been provided.

23H. Whoever fails to comply with any provision of this Act, the rules or articles or bye-
laws or the regulations of the recognised stock exchange or directions issued by the
Securities and Exchange Board of India for which no separate penalty has been provided,
shall be liable to a penalty which may extend to one crore rupees.
Power to adjudicate.
23-I. (1) For the purpose of adjudging under sections 23A, 23B, 23C, 23D, 23E, 23F,
23G and 23H, the Securities and Exchange Board of India shall appoint any officer not
below the rank of a Division Chief of the Securities and Exchange Board of India to be
an adjudicating officer for holding an inquiry in the prescribed manner after giving any
person concerned a reasonable opportunity of being heard for the purpose of imposing
any penalty.
(2) While holding an inquiry, the adjudicating officer shall have power to summon and
enforce the attendance of any person acquainted with the facts and circumstances of the
case to give evidence or to produce any document, which in the opinion of the
adjudicating officer, may be useful for or relevant to the subject-matter of the inquiry and
if, on such inquiry, he is satisfied that the person has failed to comply with the provisions
of any of the sections specified in sub-section (1), he may impose such penalty as he
thinks fit in accordance with the provisions of any of those sections.
Factors to be taken into account by adjudicating officer.

23J. While adjudging the quantum of penalty under section 23-I, the adjudicating officer
shall have due regard to the following factors, namely:—
(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable,
made as a result of the default;
(b) the amount of loss caused to an investor or group of investors as a result of the
default;
Crediting sums realised by way of penalties to Consolidated Fund of India.

23K. All sums realised by way of penalties under this Act shall be credited to the
Consolidated Fund of India.
Appeal to Securities Appellate Tribunal.

23L. (1) Any person aggrieved, by the order or decision of the recognised stock exchange
or the adjudicating officer or any order made by the Securities and Exchange Board of
India under section 4B, may prefer an appeal before the Securities Appellate Tribunal and
the provisions of sections 22B, 22C, 22D and 22E of this Act, shall apply, as far as may
be, to such appeals.
(2) Every appeal under sub-section (1) shall be filed within a period of forty-five days
from the date on which a copy of the order or decision is received by the appellant and it
shall be in such form and be accompanied by such fee as may be prescribed:
Provided that the Securities Appellate Tribunal may entertain an appeal after the expiry
of the said period of forty-five days if it is satisfied that there was sufficient cause for not
filing it within that period.
(3) On receipt of an appeal under sub-section (1), the Securities Appellate Tribunal may,
after giving the parties to the appeal, an opportunity of being heard, pass such orders
thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.
(4) The Securities Appellate Tribunal shall send a copy of every order made by it to the
parties to the appeal and to the concerned adjudicating officer.
(5) The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall
be dealt with by it as expeditiously as possible and endeavour shall be made by it to
dispose of the appeal finally within six months from the date of receipt of the appeal.
Offences.
23M. (1) Without prejudice to any award of penalty by the 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 or bye-laws made there under, for
which no punishment is provided elsewhere in this Act, he shall be punishable with
imprisonment for a term which may extend to ten years, or with fine, which may extend
to twenty-five crore rupees or with both.
(2) If any person fails to pay the penalty imposed by the adjudicating officer or fails to
comply with any of his directions or orders, he shall be punishable with imprisonment for
a term which shall not be less than one month but which may extend to ten years, or with
fine, which may extend to twenty-five crore rupees, or with both.
Composition of certain offences.

23N. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of
1974), any offence punishable under this Act, not being an offence punishable with
imprisonment only, or with imprisonment and also with fine, may either before or after
the institution of any proceeding, be compounded by a Securities Appellate Tribunal or a
court before which such proceedings are pending.
Power to grant immunity.

23-O. (1) The Central Government may, on recommendation by the Securities and
Exchange Board of India, if the Central Government is satisfied, that any person, who is
alleged to have violated any of the provisions of this Act or the rules or the regulations
made there under, has made a full and true disclosure in respect of alleged violation,
grant to such person, subject to such conditions as it may think fit to impose, immunity
from prosecution for any offence under this Act, or the rules or the regulations made
there under or also from the imposition of any penalty under this Act with respect to the
alleged violation:
Provided that no such immunity shall be granted by the Central Government in cases
where the proceedings for the prosecution for any such offence have been instituted
before the date of receipt of application for grant of such immunity:
Provided further that the recommendation of the Securities and Exchange Board of
India under this sub-section shall not be binding upon the Central Government.
(2) An immunity granted to a person under sub-section (1) may, at any time, be
withdrawn by the Central Government, if it is satisfied that such person had, in the course
of the proceedings, not complied with the condition on which the immunity was granted
or had given false evidence, and thereupon such person may be tried for the offence with
respect to which the immunity was granted or for any other offence of which he appears
to have been guilty in connection with the contravention and shall also become liable to
the imposition of any penalty under this Act to which such person would have been
liable, had not such immunity been granted.]
Offences by companies.
24. (1) Where an offence has been committed by a company, every person who, at the
time when the offence was committed, was in charge of, and was responsible to, the
company for the conduct of the business of the company, as well as the company, shall be
deemed to be guilty of the offence, and shall be liable to be proceeded against and
punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to
any punishment provided in this Act, if he proves that the offence was committed without
his knowledge or that he exercised all due diligence to prevent the commission of such
offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this
Act has been committed by a company and it is proved that the offence has been
committed with the consent or connivance of, or is attributable to any gross negligence
on the part of any director, manager, secretary or other officer of the company, such
director, manager, secretary or other officer of the company, shall also be deemed to be
guilty of that offence and shall be liable to be proceeded against and punished
accordingly.
Explanation.— For the purpose of this section,—
(a) “company” means any body corporate and includes a firm or other association of
individuals, and
68
[(b) “director”, in relation to—
(i) a firm, means a partner in the firm;
(ii) any association of persons or a body of individuals, means any member
controlling the affairs thereof.]
69
[(3) The provisions of this section shall be in addition to, and not in derogation of, the
provisions of section 22A].
Certain offences to be cognizable.

25. Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of
1898), any offence punishable under 70 [***] section 23 shall be deemed to be a
cognizable offence within the meaning of that Code.
71
[Cognizance of offences by courts.
26. (1) No court shall take cognizance of any offence punishable under this Act or any
rules or regulations or bye-laws made thereunder, save on a complaint made by the
Central Government or State Government or the Securities and Exchange Board of India
or a recognised stock exchange or by any person.
(2) No court inferior to that of a Court of Session shall try any offence punishable under
this Act.]
68
Substituted by the Securities Laws (Amendment) Act, 1999 (w.e.f. 22.02.2000). Prior to its substitution,
sub-clause (b) read as under: ‘director’, in relation to a firm, means a partner in the firm.”
69
70
The words “sub-section (1) of’ omitted by the Securities Laws (Amendment) Act, 2004, S.12 (w.e.f. 12-
10-2004).
71
Section 26 substituted vide The Securities Laws (Amendment) Act, 2004. Prior to substitution, it read as
under;
"No court inferior to that of a presidency magistrate or a magistrate of the first class shall take cognizable
of or try any offence punishable under this Act."
MISCELLANEOUS
Title to dividends.
27. (1) It shall be lawful for the holder of any security whose name appears on the books
of the company issuing the said security to receive and retain any dividend declared by
the company in respect thereof for any year, notwithstanding that the said security has
already been transferred by him for consideration, unless the transferee who claims the
dividend from the transferor has lodged the security and all other documents relating to
the transfer which may be required by the company with the company for being
registered in his name within fifteen days of the date on which the dividend became due.
Explanation.— The period specified in this section shall be extended—
(i) in case of death of the transferee, by the actual period taken by his legal
representative to establish his claim to the dividend;
(ii) in case of loss of the transfer deed by theft or any other cause beyond the control of
the transferee, by the actual period taken for the replacement thereof; and
(iii) in case of delay in the lodging of any security and other documents relating to the
transfer due to causes connected with the post, by the actual period of the delay.
(2) Nothing contained in sub-section (1) shall affect—
(a) the right of a company to pay any dividend which has become due to any person
whose name is for the time being registered in the books of the company as the
holder of the security in respect of which the dividend has become due; or
(b) the right of the transferee of any security to enforce against the transferor or any
other person his rights, if any, in relation to the transfer in any case where the
company has refused to register the transfer of the security in the name of the
transferee.
72
[Right to receive income from collective investment scheme.
27A. (1) It shall be lawful for the holder of any securities, being units or other
instruments issued by the collective investment scheme, whose name appears on the
books of the collective investment scheme issuing the said security to receive and retain
any income in respect of units or other instruments issued by the collective investment
scheme declared by the collective investment scheme in respect thereof for any year,
notwithstanding that the said security, being units or other instruments issued by the
collective investment scheme, has already been transferred by him for consideration,
unless the transferee who claims the income in respect of units or other instruments
issued by the collective investment scheme from the transfer or has lodged the security
and all other documents relating to the transfer which may be required by the collective
investment scheme with the collective investment scheme for being registered in his
name within fifteen days of the date on which the income in respect of units or other
instruments issued by the collective investment scheme became due.
72
representative to establish his claim to the income in respect of units or other
instrument issued by the collective investment scheme;
the transferee, by the actual period taken for the replacement thereof; and
(iii) in case of delay in the lodging of any security, being units or other instruments
issued by the collective investment scheme, and other documents relating to the
transfer due to causes connected with the post, by the actual period of the delay.
(a) the right of a collective investment scheme to pay any income from units or other
instruments issued by the collective investment scheme which has become due to
any person whose name is for the time being registered in the books of the
collective investment scheme as the holder of the security being units or other
instruments issued by the collective investment scheme in respect of which the
income in respect of units or other instruments issued by the collective scheme has
become due; or
(b) the right of transferee of any security, being units or other instruments issued by
the collective investment scheme, to enforce against the transferor or any other
person his rights, if any, in relation to the transfer in any case where the company
has refused to register the transfer of the security being units or other instruments
issued by the collective investment scheme in the name of the transferee.]
73
[Right to receive income from mutual fund.
27B. (1) It shall be lawful for the holder of any securities, being units or other
instruments issued by any mutual fund, whose name appears on the books of the mutual
fund issuing the said security to receive and retain any income in respect of units or other
instruments issued by the mutual fund declared by the mutual fund in respect thereof for
any year, notwithstanding that the said security, being units or other instruments issued
by the mutual fund, has already been transferred by him for consideration, unless the
transferee who claims the income in respect of units or other instruments issued by the
mutual fund from the transferor has lodged the security and all other documents relating
to the transfer which may be required by the mutual fund with the mutual fund for being
registered in his name within fifteen days of the date on which the income in respect of
units or other instruments issued by the mutual fund became due.
representative to establish his claim to the income in respect of units or other
instrument issued by the mutual fund;
transferee, by the actual period taken for the replacement thereof; and
73
Inserted by the Securities Laws (Amendment) Act,2004, S.14 (w.e.f. 12-10-2004).
(iii) in case of delay in the lodging of any security, being units or other instruments
issued by the mutual fund, and other documents relating to the transfer due to
causes connected with the post, by the actual period of the delay.
(a) the right of a mutual fund to pay any income from units or other instruments issued
by the mutual fund which has become due to any person, whose name is for the
time being registered in the books of the mutual fund as the holder of the security
being units or other instruments issued by the mutual fund in respect of which the
income in respect of units or other instruments issued by the mutual fund has
become due; or
(b) the right of transferee of any security, being units or other instruments issued by
the mutual fund, to enforce against the transferor or any other person, his rights, if
any, in relation to the transfer in any case where the mutual fund has refused to
register the transfer of the security being units or other instruments issued by the
mutual fund in the name of the transferee.]
74
[Act not to apply in certain cases.
28. (1) The provisions of this Act shall not apply to—
(a) the Government, the Reserve Bank of India, any local authority or any corporation
set-up by a special law or any person who has effected any transaction with or
through the agency of any such authority as is referred to in this clause;
(b) any convertible bond or share warrant or any option or right in relation thereto,
insofar as it entitles the person in whose favour any of the foregoing has been
issued to obtain at his option from the company or other body corporate, issuing
the same or from any of its shareholders or duly appointed agents’ shares of the
company or other body corporate, whether by conversion of the bond or warrant or
otherwise, on the basis of the price agreed upon when the same was issued.
(2) Without prejudice to the provisions contained in sub-section (1), if the Central
Government1 is satisfied that in the interests of trade and commerce or the economic
development of the country it is necessary or expedient so to do, it may, by notification in
the Official Gazette, specify any class of contracts as contracts to which this Act or any
provision contained therein shall not apply, and also the conditions, limitations or
restrictions, if any, subject to which it shall not so apply.
Protection of action taken in good faith.

29. No suit, prosecution or other legal proceeding whatsoever shall lie in any court
against the governing body or any member, office bearer or servant of any recognised
stock exchange or against any person or persons appointed under sub-section (1) of
section 11 for anything which is in good faith done or intended to be done in pursuance
of this Act or of any rules or bye-laws made there under.
74
Substituted by Act 49 of 1959, S.3, for S.28.
75
[Power to delegate.
29A. The Central Government may, by order published in the Official Gazette, direct that
the powers (except the power under section 30) exercisable by it under any provision of
this Act shall, in relation to such matters and subject to such conditions, if any, as may be
specified in the order, be exercisable also by the Securities and Exchange Board of India
or the Reserve Bank of India constituted under section 3 of the Reserve Bank of India
Act, 1934 (2 of 1934).]
Power to make rules.

30. (1) The Central Government may, by notification in the Official Gazette, make rules
for the purpose of carrying into effect the objects of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such
rules may provide for,—
(a) the manner in which applications may be made, the particulars which they should
contain and the levy of a fee in respect of such applications;
(b) the manner in which any inquiry for the purpose of recognising any stock exchange
may be made, the conditions which may be imposed for the grant of such
recognition, including conditions as to the admission of members if the stock
exchange concerned is to be the only recognised stock exchange in the area; and
the form in which such recognition shall be granted;
(c) the particulars which should be contained in the periodical returns and annual
reports to be furnished to the Central Government;
(d) the documents which should be maintained and preserved under section 6 and the
periods for which they should be preserved;
(e) the manner in which any inquiry by the governing body of a stock exchange shall
be made under section 6;
(f) the manner in which the bye-laws to be made or amended under this Act shall
before being so made or amended be published for criticism;
(g) the manner in which applications may be made by dealers in securities for licences
under section 17, the fee payable in respect thereof and the period of such licences,
the conditions subject to which licences may be granted, including conditions
relating to the forms which may be used in making contracts, the documents to be
maintained by licensed dealers and the furnishing of periodical information to such
authority as may be specified and the revocation of licences for breach of
conditions;
76
[(h) the requirements which shall be complied with—
(A) by public companies for the purpose of getting their securities listed on any
stock exchange;
(B) by collective investment scheme for the purpose of getting their units listed
75
Substituted by Act 31 of 1999, S.9, for S.29-A (w.e.f. 22-02-2000).
76
Substituted by the Securities Laws (Amendment) Act, 1999 w.e.f. 22.02.2000. Prior to its substitution,
clause (h) read as under: “the requirement which shall be compiled with by public companies for the
purpose of getting their securities listed on any stock exchange ; and”.
on any stock exchange;]
77
[(ha) the grounds on which the securities of a company may be delisted from any
recognised stock exchange under sub-section (1) of section 21A;
(hb) the form in which an appeal may be filed before the Securities Appellate Tribunal
under sub-section (2) of section 21A and the fees payable in respect of such appeal;
(hc) the form in which an appeal may be filed before the Securities Appellate Tribunal
under section 22A and the fees payable in respect of such appeal;
(hd) the manner of inquiry under sub-section (1) of section 23-I;
(he) the form in which an appeal may be filed before the Securities Appellate Tribunal
under section 23L and the fees payable in respect of such appeal;]
(i) any other matter which is to be or may be prescribed.
78
[(3) Every rule made under this Act shall be laid, as soon as may be after it is made,
before each House of Parliament, while it is in session, for a total period of thirty days
which may be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any modification in the rule or both
Houses agree that the rule should not be made, the rule shall thereafter have effect only in
such modified form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of anything
previously done under that rule.]
79
[Power of Securities and Exchange Board of India to make regulations.
31. (1) Without prejudice to the provisions contained in section 30 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992), the Securities and Exchange Board of
India may, by notification in the Official Gazette, make regulations consistent with the
provisions of this Act and the rules made there under to carry out the purposes of this
Act.
(2) In particular and without prejudice to the generality of the foregoing power, such
regulations may provide for the manner in which at least fifty-one per cent of equity
share capital of a recognised stock exchange is held within twelve months from the date
of publication of the order under sub-section (7) of section 4B by the public other than
77
Substituted vide The Securities Laws (Amendment) Act, 2004, prior to substitution clause (ha) read as
under "the form in which an appeal may be filed before the Securities Appellate Tribunal under section
22A and the fees payable in respect of such appeal."
78
Substituted vide The Securities Laws (Amendment) Act, 2004 , Prior to substitution , it read as under;
" Every rule made under this section 24[***] shall, as soon as may be, after its publication in the Official
Gazette, be laid before each House of Parliament, while it is in session, for a total period of thirty days
which may be comprised in one session or in two or more successive sessions, and if, before the expiry of
the session immediately following the session or the successive session aforesaid, both Houses agree in
making any modification in the rule or both Houses agree that the rule should not be made, the rule shall
thereafter have effect only in such modified forms or be of no effect, as the case may be; so, however that
any such modification or annulment shall be without prejudice to the validity of anything previously done
under that rule."
79
Inserted by the Securities Laws (Amendment) Act,2004, S.14 (w.e.f. 12-10-2004).
the shareholders having trading rights under sub-section (8) of that section.
(3) Every regulation made under this Act shall be laid, as soon as may be after it is made,
before each House of Parliament, while it is in session for a total period of thirty days
which may be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any modification in the regulation or
both Houses agree that the regulation should not be made, the regulation shall thereafter
have effect only in such modified form or be of no effect, as the case may be; so,
however, that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that regulation.]
THE GAZETTE OF INDIA
EXTRAORDINARY
PART – III – SECTION 4
PUBLISHED BY AUTHORITY
NEW DELHI, JANUARY 15, 2015
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 15th January, 2015

(PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015
No. LAD-NRO/GN/2014-15/21/85.- In exercise of the powers conferred by section 30 read with
clause (g) of sub-section (2) of section 11 and clause (d) and clause (e) of section 12A of the
Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the
following regulations, to put in place a framework for prohibition of insider trading in securities
and to strengthen the legal framework thereof, namely:—
CHAPTER – I
PRELIMINARY
Short title and commencement.

1. (1) These regulations may be called the SEBI (Prohibition of Insider Trading)
Regulations, 2015.
(2) These regulations shall come into force on the one hundred and twentieth day from the
date of its publication in the Official Gazette.
Definitions.
2. (1) In these regulations, unless the context otherwise requires, the following words,
expressions and derivations therefrom shall have the meanings assigned to them as under:–
(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(b) “Board” means the Securities and Exchange Board of India;
(c) “compliance officer” means any senior officer, designated so and reporting to the
board of directors or head of the organization in case board is not there, who is
financially literate and is capable of appreciating requirements for legal and regulatory
compliance under these regulations and who shall be responsible for compliance of
policies, procedures, maintenance of records, monitoring adherence to the rules for the
preservation of unpublished price sensitive information, monitoring of trades and the
implementation of the codes specified in these regulations under the overall supervision
of the board of directors of the listed company or the head of an organization, as the case
may be.
1
[Explanation – For the purpose of this regulation, “financially literate” shall mean a
person who has the ability to read and understand basic financial statements i.e. balance
sheet, profit and loss account, and statement of cash flows];
(d) "connected person" means,-

(i) any person who is or has during the six months prior to the concerned act been
associated with a company, directly or indirectly, in any capacity including by
reason of frequent communication with its officers or by being in any contractual,
fiduciary or employment relationship or by being a director, officer or an
employee of the company or holds any position including a professional or
1
Inserted by Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations,
2018 (w.e.f. April 01, 2019).
business relationship between himself and the company whether temporary or
permanent, that allows such person, directly or indirectly, access to unpublished
price sensitive information or is reasonably expected to allow such access.
(ii) Without prejudice to the generality of the foregoing, the persons falling within
the following categories shall be deemed to be connected persons unless the
contrary is established, -
(a). an immediate relative of connected persons specified in clause (i); or
(b). a holding company or associate company or subsidiary company; or
(c). an intermediary as specified in section 12 of the Act or an employee or
director thereof; or
(d). an investment company, trustee company, asset management company or
an employee or director thereof; or
(e). an official of a stock exchange or of clearing house or corporation; or
(f). a member of board of trustees of a mutual fund or a member of the board
of directors of the asset management company of a mutual fund or is an
employee thereof; or
(g). a member of the board of directors or an employee, of a public financial
institution as defined in section 2 (72) of the Companies Act, 2013; or
(h). an official or an employee of a self-regulatory organization recognised or
authorized by the Board; or
(i). a banker of the company; or
(j). a concern, firm, trust, Hindu undivided family, company or association of
persons wherein a director of a company or his immediate relative or
banker of the company, has more than ten per cent. of the holding or
interest;
NOTE: It is intended that a connected person is one who has a connection with
the company that is expected to put him in possession of unpublished price sensitive
information. Immediate relatives and other categories of persons specified above are also
presumed to be connected persons but such a presumption is a deeming legal fiction and
is rebuttable. This definition is also intended to bring into its ambit persons who may not
seemingly occupy any position in a company but are in regular touch with the company
and its officers and are involved in the know of the company’s operations. It is intended
to bring within its ambit those who would have access to or could access unpublished
price sensitive information about any company or class of companies by virtue of any
connection that would put them in possession of unpublished price sensitive information.
(e) "generally available information" means information that is accessible to the

public on a non-discriminatory basis;
NOTE: It is intended to define what constitutes generally available information so

that it is easier to crystallize and appreciate what unpublished price sensitive information
is. Information published on the website of a stock exchange, would ordinarily be
considered generally available.
(f) “immediate relative” means a spouse of a person, and includes parent, sibling, and
child of such person or of the spouse, any of whom is either dependent financially on
such person, or consults such person in taking decisions relating to trading in securities;
NOTE: It is intended that the immediate relatives of a “connected person” too

become connected persons for purposes of these regulations. Indeed, this is a rebuttable
presumption.
(g) "insider" means any person who is:
i) a connected person; or
ii) in possession of or having access to unpublished price sensitive

information;
NOTE: Since “generally available information” is defined, it is intended that
anyone in possession of or having access to unpublished price sensitive information
should be considered an “insider” regardless of how one came in possession of or had
access to such information. Various circumstances are provided for such a person to
demonstrate that he has not indulged in insider trading. Therefore, this definition is
intended to bring within its reach any person who is in receipt of or has access to
unpublished price sensitive information. The onus of showing that a certain person was
in possession of or had access to unpublished price sensitive information at the time of
trading would, therefore, be on the person leveling the charge after which the person who
has traded when in possession of or having access to unpublished price sensitive
information may demonstrate that he was not in such possession or that he has not traded
or or he could not access or that his trading when in possession of such information was
squarely covered by the exonerating circumstances.
(h) "promoter" shall have the meaning assigned to it under the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2
[2018] or any modification thereof;
3
[(ha) "promoter group" shall have the meaning assigned to it under the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 or any
modification thereof;]
4
[(5[hb]) “proposed to be listed” shall include securities of an unlisted company:
(i) if such unlisted company has filed offer documents or other documents, as the
case may be, with the Board, stock exchange(s) or registrar of companies in
connection with the listing; or
2
Substituted for the number “2009” by Securities and Exchange Board of India (Prohibition of Insider Trading)
(Amendment) Regulations, 2018 (w.e.f. April 01, 2019).
3
2019 (w.e.f. January 21, 2019).
4
2018 (w.e.f. April 01, 2019).
5
Re-numbered by Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment)
Regulations, 2019 (w.e.f. January 21, 2019).
(ii) if such unlisted company is getting listed pursuant to any merger or
amalgamation and has filed a copy of such scheme of merger or amalgamation
under the Companies Act, 2013;]
(i) "securities" shall have the meaning assigned to it under the Securities Contracts
(Regulation) Act, 1956 (42 of 1956) or any modification thereof except units of a mutual
fund;
(j) "specified" means specified by the Board in writing;
(k) “takeover regulations” means the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and any
amendments thereto;
(l) "trading" means and includes subscribing, buying, selling, dealing, or agreeing to
subscribe, buy, sell, deal in any securities, and "trade" shall be construed accordingly ;
NOTE: Under the parliamentary mandate, since the Section 12A (e) and Section
15G of the Act employs the term 'dealing in securities', it is intended to widely define the
term “trading” to include dealing. Such a construction is intended to curb the activities
based on unpublished price sensitive information which are strictly not buying, selling or
subscribing, such as pledging etc when in possession of unpublished price sensitive
information.
(m) “trading day” means a day on which the recognized stock exchanges are open for
trading;
(n) "unpublished price sensitive information" means any information, relating to a

company or its securities, directly or indirectly, that is not generally available which upon
becoming generally available, is likely to materially affect the price of the securities and
shall, ordinarily including but not restricted to, information relating to the following: –
(i) financial results;
(ii) dividends;
(iii) change in capital structure;
(iv) mergers, de-mergers, acquisitions, delistings, disposals and expansion of business

and such other transactions;
(v) changes in key managerial personnel.
6
[***].
NOTE: It is intended that information relating to a company or securities, that is

not generally available would be unpublished price sensitive information if it is likely to
materially affect the price upon coming into the public domain. The types of matters that
would ordinarily give rise to unpublished price sensitive information have been listed
above to give illustrative guidance of unpublished price sensitive information.
(2) Words and expressions used and not defined in these regulations but defined in the
Securities and Exchange Board of India Act, 1992 (15 of 1992), the Securities Contracts
(Regulation) Act, 1956 (42 of 1956), the Depositories Act, 1996 (22 of 1996) or the Companies
Act, 2013 (18 of 2013) and rules and regulations made thereunder shall have the meanings
respectively assigned to them in those legislation.
CHAPTER – II
RESTRICTIONS ON COMMUNICATION AND TRADING BY INSIDERS
6
Omitted by Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations,
2018 (w.e.f. April 01, 2019) which earlier read as follows:
“(vi) material events in accordance with the listing agreement”
Communication or procurement of unpublished price sensitive information.
3. (1) No insider shall communicate, provide, or allow access to any unpublished price
sensitive information, relating to a company or securities listed or proposed to be listed, to any
person including other insiders except where such communication is in furtherance of legitimate
purposes, performance of duties or discharge of legal obligations.
NOTE: This provision is intended to cast an obligation on all insiders who are essentially
persons in possession of unpublished price sensitive information to handle such information with
care and to deal with the information with them when transacting their business strictly on a
need-to-know basis. It is also intended to lead to organisations developing practices based on
need-to-know principles for treatment of information in their possession.
(2) No person shall procure from or cause the communication by any insider of unpublished
price sensitive information, relating to a company or securities listed or proposed to be listed,
except in furtherance of legitimate purposes, performance of duties or discharge of legal
obligations.
NOTE: This provision is intended to impose a prohibition on unlawfully procuring

possession of unpublished price sensitive information. Inducement and procurement of
unpublished price sensitive information not in furtherance of one’s legitimate duties and
discharge of obligations would be illegal under this provision.
7
[(2A) The board of directors of a listed company shall make a policy for determination of
“legitimate purposes” as a part of “Codes of Fair Disclosure and Conduct” formulated under
regulation 8.
Explanation – For the purpose of illustration, the term “legitimate purpose” shall include sharing
of unpublished price sensitive information in the ordinary course of business by an insider with
7
2018 (w.e.f. April 01, 2019).
partners, collaborators, lenders, customers, suppliers, merchant bankers, legal advisors, auditors,
insolvency professionals or other advisors or consultants, provided that such sharing has not been
carried out to evade or circumvent the prohibitions of these regulations.]
8
[(2B) Any person in receipt of unpublished price sensitive information pursuant to a “legitimate
purpose” shall be considered an “insider” for purposes of these regulations and due notice shall
be given to such persons to maintain confidentiality of such unpublished price sensitive
information in compliance with these regulations.]
(3) Notwithstanding anything contained in this regulation, an unpublished price sensitive

information may be communicated, provided, allowed access to or procured, in connection with
a transaction that would:–
(i) entail an obligation to make an open offer under the takeover regulations where
the board of directors of the 9[listed] company is of informed opinion that 10
[sharing of
such information] is in the best interests of the company;
NOTE: It is intended to acknowledge the necessity of communicating, providing,

allowing access to or procuring UPSI for substantial transactions such as takeovers,
mergers and acquisitions involving trading in securities and change of control to assess a
potential investment. In an open offer under the takeover regulations, not only would the
same price be made available to all shareholders of the company but also all information
necessary to enable an informed divestment or retention decision by the public
shareholders is required to be made available to all shareholders in the letter of offer
under those regulations.
8
2018 (w.e.f. April 01, 2019).
9
2018 (w.e.f. April 01, 2019).
10
Substituted for the words “the proposed transaction” by Securities and Exchange Board of India (Prohibition of
Insider Trading) (Amendment) Regulations, 2018 (w.e.f. April 01, 2019).
(ii) not attract the obligation to make an open offer under the takeover regulations but
11 12
where the board of directors of the [listed] company is of informed opinion [that
sharing of such information] is in the best interests of the company and the information
that constitute unpublished price sensitive information is disseminated to be made
generally available at least two trading days prior to the proposed transaction being
13
effected in such form as the board of directors may determine [to be adequate and fair
to cover all relevant and material facts].
NOTE: It is intended to permit communicating, providing, allowing access to or

procuring UPSI also in transactions that do not entail an open offer obligation under the
14
takeover regulations [when authorised by the board of directors if sharing of such
information] is in the best interests of the company. The board of directors, however,
would cause public disclosures of such unpublished price sensitive information well
before the proposed transaction to rule out any information asymmetry in the market.
(4) For purposes of sub-regulation (3), the board of directors shall require the parties to
execute agreements to contract confidentiality and non-disclosure obligations on the part of such
parties and such parties shall keep information so received confidential, except for the purpose of
sub-regulation (3), and shall not otherwise trade in securities of the company when in possession
of unpublished price sensitive information.
15
[(5) The board of directors shall ensure that a structured digital database is maintained
containing the names of such persons or entities as the case may be with whom information is
shared under this regulation along with the Permanent Account Number or any other identifier
authorized by law where Permanent Account Number is not available. Such databases shall be
11
2018 (w.e.f. April 01, 2019).
12
Substituted for the words “that the proposed transaction” by Securities and Exchange Board of India (Prohibition
of Insider Trading) (Amendment) Regulations, 2018 (w.e.f. April 01, 2019).
13
2018 (w.e.f. April 01, 2019).
14
Substituted for the words “if it” by Securities and Exchange Board of India (Prohibition of Insider Trading)
15
2018 (w.e.f. April 01, 2019).
maintained with adequate internal controls and checks such as time stamping and audit trails to
ensure non-tampering of the database.]
Trading when in possession of unpublished price sensitive information.

4. (1) No insider shall trade in securities that are listed or proposed to be listed on a
stock exchange when in possession of unpublished price sensitive information:
16
[Explanation –When a person who has traded in securities has been in possession of
unpublished price sensitive information, his trades would be presumed to have been motivated
by the knowledge and awareness of such information in his possession.]
Provided that the insider may prove his innocence by demonstrating the circumstances
including the following: –
17
(i) the transaction is an off-market inter-se transfer between [insiders] who were in
possession of the same unpublished price sensitive information without being in breach
of regulation 3 and both parties had made a conscious and informed trade decision.
18
[Provided that such unpublished price sensitive information was not obtained under
sub-regulation (3) of regulation 3 of these regulations.
Provided further that such off-market trades shall be reported by the insiders to the
company within two working days. Every company shall notify the particulars of such
trades to the stock exchange on which the securities are listed within two trading days
from receipt of the disclosure or from becoming aware of such information.];
16
2018 (w.e.f. April 01, 2019).
17
Substituted for the word “promoters” by Securities and Exchange Board of India (Prohibition of Insider Trading)
18
2018 (w.e.f. April 01, 2019).
19
[(ii) the transaction was carried out through the block deal window mechanism between
persons who were in possession of the unpublished price sensitive information without
being in breach of regulation 3 and both parties had made a conscious and informed trade
decision;
Provided that such unpublished price sensitive information was not obtained by either
person under sub-regulation (3) of regulation 3 of these regulations.
(iii) the transaction in question was carried out pursuant to a statutory or regulatory
obligation to carry out a bona fide transaction.
(iv) the transaction in question was undertaken pursuant to the exercise of stock options
in respect of which the exercise price was pre-determined in compliance with applicable
regulations.]
(v) in the case of non-individual insiders: –
(a) the individuals who were in possession of such unpublished price sensitive
information were different from the individuals taking trading decisions and such
decision-making individuals were not in possession of such unpublished price
sensitive information when they took the decision to trade; and
(b) appropriate and adequate arrangements were in place to ensure that these
regulations are not violated and no unpublished price sensitive information was
communicated by the individuals possessing the information to the individuals
taking trading decisions and there is no evidence of such arrangements having
been breached;
(vi) the trades were pursuant to a trading plan set up in accordance with regulation 5.
19
2018 (w.e.f. April 01, 2019).
NOTE: When a person who has traded in securities has been in possession of
unpublished price sensitive information, his trades would be presumed to have been
motivated by the knowledge and awareness of such information in his possession. The
reasons for which he trades or the purposes to which he applies the proceeds of the
transactions are not intended to be relevant for determining whether a person has
violated the regulation. He traded when in possession of unpublished price sensitive
information is what would need to be demonstrated at the outset to bring a charge. Once
this is established, it would be open to the insider to prove his innocence by
demonstrating the circumstances mentioned in the proviso, failing which he would have
violated the prohibition.
(2) In the case of connected persons the onus of establishing, that they were not in possession
of unpublished price sensitive information, shall be on such connected persons and in other
cases, the onus would be on the Board.
(3) The Board may specify such standards and requirements, from time to time, as it may
deem necessary for the purpose of these regulations.
Trading Plans.
5. (1) An insider shall be entitled to formulate a trading plan and present it to the
compliance officer for approval and public disclosure pursuant to which trades may be carried
out on his behalf in accordance with such plan.
NOTE: This provision intends to give an option to persons who may be perpetually in
possession of unpublished price sensitive information and enabling them to trade in securities in
a compliant manner. This provision would enable the formulation of a trading plan by an
insider to enable him to plan for trades to be executed in future. By doing so, the possession of
unpublished price sensitive information when a trade under a trading plan is actually executed
would not prohibit the execution of such trades that he had pre-decided even before the
unpublished price sensitive information came into being.
(2) Such trading plan shall:–
(i) not entail commencement of trading on behalf of the insider earlier than six
months from the public disclosure of the plan;
NOTE: It is intended that to get the benefit of a trading plan, a cool-off period of
six months is necessary. Such a period is considered reasonably long for unpublished
price sensitive information that is in possession of the insider when formulating the
trading plan, to become generally available. It is also considered to be a reasonable
period for a time lag in which new unpublished price sensitive information may come into
being without adversely affecting the trading plan formulated earlier. In any case, it
should be remembered that this is only a statutory cool-off period and would not grant
immunity from action if the insider were to be in possession of the same unpublished
price sensitive information both at the time of formulation of the plan and implementation
of the same.
(ii) not entail trading for the period between the twentieth trading day prior to the last
day of any financial period for which results are required to be announced by the issuer of
the securities and the second trading day after the disclosure of such financial results;
NOTE: Since the trading plan is envisaged to be an exception to the general rule
prohibiting trading by insiders when in possession of unpublished price sensitive
information, it is important that the trading plan does not entail trading for a reasonable
period around the declaration of financial results as that would generate unpublished
price sensitive information.
(iii) entail trading for a period of not less than twelve months;
NOTE: It is intended that it would be undesirable to have frequent announcements

of trading plans for short periods of time rendering meaningless the defence of a
reasonable time gap between the decision to trade and the actual trade. Hence it is felt
that a reasonable time would be twelve months.
(iv) not entail overlap of any period for which another trading plan is already in
existence;
NOTE: It is intended that it would be undesirable to have multiple trading plans

operating during the same time period. Since it would be possible for an insider to time
the publication of the unpublished price sensitive information to make it generally
available instead of timing the trades, it is important not to have the ability to initiate
more than one plan covering the same time period.
(v) set out either the value of trades to be effected or the number of securities to be
traded along with the nature of the trade and the intervals at, or dates on which such
trades shall be effected; and
NOTE: It is intended that while regulations should not be too prescriptive and
rigid about what a trading plan should entail, they should stipulate certain basic
parameters that a trading plan should conform to and within which, the plan may be
formulated with full flexibility. The nature of the trades entailed in the trading plan i.e.
acquisition or disposal should be set out. The trading plan may set out the value of
securities or the number of securities to be invested or divested. Specific dates or specific
time intervals may be set out in the plan.
(vi) not entail trading in securities for market abuse.
NOTE: Trading on the basis of such a trading plan would not grant absolute immunity
from bringing proceedings for market abuse. For instance, in the event of manipulative
timing of the release of unpublished price sensitive information to ensure that trading
under a trading plan becomes lucrative in circumvention of regulation 4 being detected,
it would be open to initiate proceedings for alleged breach of SEBI (Prohibition of
Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations,
2003.
(3) The compliance officer shall review the trading plan to assess whether the plan would
have any potential for violation of these regulations and shall be entitled to seek such express
undertakings as may be necessary to enable such assessment and to approve and monitor the
implementation of the plan.
20
[Provided that pre-clearance of trades shall not be required for a trade executed as per an
approved trading plan.
Provided further that trading window norms and restrictions on contra trade shall not be
applicable for trades carried out in accordance with an approved trading plan.]
NOTE: It is intended that the compliance officer would have to review and approve the
plan. For doing so, he may need the insider to declare that he is not in possession of
unpublished price sensitive information or that he would ensure that any unpublished price
sensitive information in his possession becomes generally available before he commences
executing his trades. Once satisfied, he may approve the trading plan, which would then have to
be implemented in accordance with these regulations.
(4) The trading plan once approved shall be irrevocable and the insider shall mandatorily
have to implement the plan, without being entitled to either deviate from it or to execute any
trade in the securities outside the scope of the trading plan.
Provided that the implementation of the trading plan shall not be commenced if any unpublished
price sensitive information in possession of the insider at the time of formulation of the plan has
not become generally available at the time of the commencement of implementation and in such
event the compliance officer shall confirm that the commencement ought to be deferred until
20
2018 (w.e.f. April 01, 2019).
such unpublished price sensitive information becomes generally available information so as to
avoid a violation of sub-regulation (1) of regulation 4.
NOTE: It is intended that since the trading plan is an exception to the general rule that an
insider should not trade when in possession of unpublished price sensitive information, changing
the plan or trading outside the same would negate the intent behind the exception. Other
investors in the market, too, would factor the impact of the trading plan on their own trading
decisions and in price discovery. Therefore, it is not fair or desirable to permit the insider to
deviate from the trading plan based on which others in the market have assessed their views on
the securities.
The proviso is intended to address the prospect that despite the six-month gap between the
formulation of the trading plan and its commencement, the unpublished price sensitive
information in possession of the insider is still not generally available. In such a situation,
commencement of the plan would conflict with the over-riding principle that trades should not be
executed when in possession of such information. If the very same unpublished price sensitive
information is still in the insider’s possession, the commencement of execution of the trading
plan ought to be deferred.
(5) Upon approval of the trading plan, the compliance officer shall notify the plan to the
stock exchanges on which the securities are listed.
NOTE: It is intended that given the material exception to the prohibitory rule in
regulation 4, a trading plan is required to be publicly disseminated. Investors in the market at
large would also factor the potential pointers in the trading plan in their own assessment of the
securities and price discovery for them on the premise of how the insiders perceive the prospects
or approach the securities in their trading plan.
CHAPTER – III
DISCLOSURES OF TRADING BY INSIDERS
General provisions.
6. (1) Every public disclosure under this Chapter shall be made in such form as may be
specified.
(2) The disclosures to be made by any person under this Chapter shall include those relating
to trading by such person’s immediate relatives, and by any other person for whom such person
takes trading decisions.
NOTE: It is intended that disclosure of trades would need to be of not only those executed
by the person concerned but also by the immediate relatives and of other persons for whom the
person concerned takes trading decisions. These regulations are primarily aimed at preventing
abuse by trading when in possession of unpublished price sensitive information and therefore,
what matters is whether the person who takes trading decisions is in possession of such
information rather than whether the person who has title to the trades is in such possession.
(3) The disclosures of trading in securities shall also include trading in derivatives of
securities and the traded value of the derivatives shall be taken into account for purposes of this
Chapter:
Provided that trading in derivatives of securities is permitted by any law for the time
being in force.
(4) The disclosures made under this Chapter shall be maintained by the company, for a
minimum period of five years, in such form as may be specified.
Disclosures by certain persons.

7. (1) Initial Disclosures.
21
(a). Every promoter [, member of the promoter group] , key managerial personnel and
director of every company whose securities are listed on any recognised stock
exchange shall disclose his holding of securities of the company as on the date of
these regulations taking effect, to the company within thirty days of these regulations
taking effect;
(b). Every person on appointment as a key managerial personnel or a director of the

22
company or upon becoming a [promoter or member of the promoter group] shall
disclose his holding of securities of the company as on the date of appointment or
becoming a promoter, to the company within seven days of such appointment or
becoming a promoter.
(2) Continual Disclosures.

23 24
(a). Every promoter [, member of the promoter group], [designated person] and
director of every company shall disclose to the company the number of such
securities acquired or disposed of within two trading days of such transaction if the
value of the securities traded, whether in one transaction or a series of transactions
over any calendar quarter, aggregates to a traded value in excess of ten lakh rupees or
such other value as may be specified;
(b). Every company shall notify the particulars of such trading to the stock exchange on
which the securities are listed within two trading days of receipt of the disclosure or
from becoming aware of such information.
Explanation. — It is clarified for the avoidance of doubts that the disclosure of the
incremental transactions after any disclosure under this sub-regulation, shall be made
21
2019 (w.e.f. January 21, 2019).
22
Substituted for the word "promoter" by Securities and Exchange Board of India (Prohibition of Insider Trading)
(Amendment) Regulations, 2019 (w.e.f. January 21, 2019).
23
2019 (w.e.f. January 21, 2019).
24
Substituted for the word “employee” by Securities and Exchange Board of India (Prohibition of Insider Trading)
when the transactions effected after the prior disclosure cross the threshold specified
in clause (a) of sub-regulation (2).
Disclosures by other connected persons.

(3) Any company whose securities are listed on a stock exchange may, at its discretion
require any other connected person or class of connected persons to make disclosures of holdings
and trading in securities of the company in such form and at such frequency as may be
determined by the company in order to monitor compliance with these regulations.
NOTE: This is an enabling provision for listed companies to seek information from those to
whom it has to provide unpublished price sensitive information. This provision confers discretion
on any company to seek such information. For example, a listed company may ask that a
management consultant who would advise it on corporate strategy and would need to review
unpublished price sensitive information, should make disclosures of his trades to the company.
CHAPTER – IV
CODES OF FAIR DISCLOSURE AND CONDUCT
Code of Fair Disclosure.

8. (1) The board of directors of every company, whose securities are listed on a stock
exchange, shall formulate and publish on its official website, a code of practices and procedures
for fair disclosure of unpublished price sensitive information that it would follow in order to
adhere to each of the principles set out in Schedule A to these regulations, without diluting the
provisions of these regulations in any manner.
NOTE: This provision intends to require every company whose securities are listed on
stock exchanges to formulate a stated framework and policy for fair disclosure of events and
occurrences that could impact price discovery in the market for its securities. Principles such as,
equality of access to information, publication of policies such as those on dividend, inorganic
growth pursuits, calls and meetings with analysts, publication of transcripts of such calls and
meetings, and the like are set out in the schedule.
(2) Every such code of practices and procedures for fair disclosure of unpublished price
sensitive information and every amendment thereto shall be promptly intimated to the stock
exchanges where the securities are listed.
NOTE: This provision is aimed at requiring transparent disclosure of the policy

formulated in sub-regulation (1).
Code of Conduct.
25
9. (1) The board of directors of every listed company and [the board of directors or
head(s) of the organisation of every intermediary shall ensure that the chief executive officer or
managing director] shall formulate a code of conduct 26[with their approval] to regulate, monitor
27
and report trading by its [designated persons and immediate relatives of designated persons]
towards achieving compliance with these regulations, adopting the minimum standards set out in
Schedule B 28[(in case of a listed company) and Schedule C (in case of an intermediary)] to these
regulations, without diluting the provisions of these regulations in any manner.
29
[Explanation – For the avoidance of doubt it is clarified that intermediaries, which are listed,
would be required to formulate a code of conduct to regulate, monitor and report trading by their
designated persons, by adopting the minimum standards set out in Schedule B with respect to
trading in their own securities and in Schedule C with respect to trading in other securities.]
25
Substituted for the words “market intermediary” by Securities and Exchange Board of India (Prohibition of
26
2018 (w.e.f. April 01, 2019).
27
Substituted for the words “employees and other connected persons” by Securities and Exchange Board of India
(Prohibition of Insider Trading) (Amendment) Regulations, 2018 (w.e.f. April 01, 2019).
28
2018 (w.e.f. April 01, 2019).
29
2018 (w.e.f. April 01, 2019).
NOTE: It is intended that every company whose securities are listed on stock exchanges
and every 30[intermediary] registered with SEBI is mandatorily required to formulate a code of
31
conduct governing trading by [designated persons and their immediate relatives]. The
standards set out in the 32[schedules] are required to be addressed by such code of conduct.
33
(2) [The board of directors or head(s) of the organisation, of every other person who is
required to handle unpublished price sensitive information in the course of business operations
shall formulate a code of conduct to regulate, monitor and report trading by their designated
persons and immediate relative of designated persons towards achieving compliance with these
regulations, adopting the minimum standards set out in Schedule C to these regulations, without
diluting the provisions of these regulations in any manner.
Explanation - Professional firms such as auditors, accountancy firms, law firms, analysts,
insolvency professional entities, consultants, banks etc., assisting or advising listed companies
shall be collectively referred to as fiduciaries for the purpose of these regulations.]
34
NOTE: [This provision is intended to mandate persons other than listed companies and
intermediaries that are required to handle unpublished price sensitive information to formulate a
code of conduct governing trading in securities by their designated persons. These entities
30
31
Substituted for the words “its employees” by Securities and Exchange Board of India (Prohibition of Insider
Trading) (Amendment) Regulations, 2018 (w.e.f. April 01, 2019).
32
Substituted for the word “schedule” by Securities and Exchange Board of India (Prohibition of Insider Trading)
33
Substituted by Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment)
Regulations, 2018 (w.e.f. April 01, 2019). Prior to substitution Sub-regulation (2) read as under:
“Every other person who is required to handle unpublished price sensitive information in the course of business
operations shall formulate a code of conduct to regulate, monitor and report trading by employees and other
connected persons towards achieving compliance with these regulations, adopting the minimum standards set out in
Schedule B to these regulations, without diluting the provisions of these regulations in any manner.”
34
Substituted by Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment)
Regulations, 2018 (w.e.f. April 01, 2019). Prior to substitution the Note read as under:
“This provision is intended to mandate persons other than listed companies and market intermediaries that are
required to handle unpublished price sensitive information to formulate a code of conduct governing trading in
securities by their employees. These entities include professional firms such as auditors, accountancy firms, law
firms, analysts, consultants etc., assisting or advising listed companies, market intermediaries and other capital
market participants. Even entities that normally operate outside the capital market may handle unpublished price
sensitive information. This provision would mandate all of them to formulate a code of conduct.”
include professional firms such as auditors, accountancy firms, law firms, analysts, insolvency
professional entities, consultants, banks etc., assisting or advising listed companies. Even entities
that normally operate outside the capital market may handle unpublished price sensitive
information. This provision would mandate all of them to formulate a code of conduct.]
35
(3) Every listed company, [intermediary] and other persons formulating a code of conduct
shall identify and designate a compliance officer to administer the code of conduct and other
requirements under these regulations.
NOTE: This provision is intended to designate a senior officer as the compliance officer with the
responsibility to administer the code of conduct and monitor compliance with these regulations.
36
[(4) For the purpose of sub regulation (1) and (2), the board of directors or such other
analogous authority shall in consultation with the compliance officer specify the designated
persons to be covered by the code of conduct on the basis of their role and function in the
organisation and the access that such role and function would provide to unpublished price
sensitive information in addition to seniority and professional designation and shall include:-
(i) Employees of such listed company, intermediary or fiduciary designated on the basis
of their functional role or access to unpublished price sensitive information in the
organization by their board of directors or analogous body;
(ii) Employees of material subsidiaries of such listed companies designated on the basis
of their functional role or access to unpublished price sensitive information in the
organization by their board of directors;
(iii) All promoters of listed companies and promoters who are individuals or investment
companies for intermediaries or fiduciaries;
35
36
2018 (w.e.f. April 01, 2019).
(iv) Chief Executive Officer and employees upto two levels below Chief Executive
Officer of such listed company, intermediary, fiduciary and its material subsidiaries
irrespective of their functional role in the company or ability to have access to
unpublished price sensitive information;
(v) Any support staff of listed company, intermediary or fiduciary such as IT staff or
secretarial staff who have access to unpublished price sensitive information.]
37[Institutional Mechanism for Prevention of Insider trading.

9A. (1) The Chief Executive Officer, Managing Director or such other analogous person of a
listed company, intermediary or fiduciary shall put in place adequate and effective system of
internal controls to ensure compliance with the requirements given in these regulations to
prevent insider trading.
(2) The internal controls shall include the following:

(a). all employees who have access to unpublished price sensitive information are
identified as designated employee;
(b). all the unpublished price sensitive information shall be identified and its
confidentiality shall be maintained as per the requirements of these regulations;
(c). adequate restrictions shall be placed on communication or procurement of

unpublished price sensitive information as required by these regulations;
(d). lists of all employees and other persons with whom unpublished price sensitive
information is shared shall be maintained and confidentiality agreements shall be
signed or notice shall be served to all such employees and persons;
37
2018 (w.e.f. April 01, 2019).
(e). all other relevant requirements specified under these regulations shall be complied
with;
(f). periodic process review to evaluate effectiveness of such internal controls.
(3) The board of directors of every listed company and the board of directors or head(s) of the
organisation of intermediaries and fiduciaries shall ensure that the Chief Executive Officer or the
Managing Director or such other analogous person ensures compliance with regulation 9 and
sub-regulations (1) and (2) of this regulation.
(4) The Audit Committee of a listed company or other analogous body for intermediary or
fiduciary shall review compliance with the provisions of these regulations at least once in a
financial year and shall verify that the systems for internal control are adequate and are operating
effectively.
(5) Every listed company shall formulate written policies and procedures for inquiry in case of
leak of unpublished price sensitive information or suspected leak of unpublished price sensitive
information, which shall be approved by board of directors of the company and accordingly
initiate appropriate inquiries on becoming aware of leak of unpublished price sensitive
information or suspected leak of unpublished price sensitive information and inform the Board
promptly of such leaks, inquiries and results of such inquiries.
(6) The listed company shall have a whistle-blower policy and make employees aware of such
policy to enable employees to report instances of leak of unpublished price sensitive information.
(7) If an inquiry has been initiated by a listed company in case of leak of unpublished price
sensitive information or suspected leak of unpublished price sensitive information, the relevant
intermediaries and fiduciaries shall co-operate with the listed company in connection with such
inquiry conducted by listed company.]
CHAPTER – V
MISCELLANEOUS
Sanction for violations.

10. Any contravention of these regulations shall be dealt with by the Board in accordance
with the Act.

11. In order to remove any difficulties in the interpretation or application of the provisions of
these regulations, the Board shall have the power to issue directions through guidance notes or
circulars:
Provided that where any direction is issued by the Board in a specific case relating to
interpretation or application of any provision of these regulations, it shall be done only after
affording a reasonable opportunity of being heard to the concerned persons and after recording
reasons for the direction.
Repeal and Savings.

12. (1) The Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 1992 are hereby repealed.
(2) Notwithstanding such repeal,—
(a) the previous operation of the repealed regulations or anything duly done or suffered
thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the
repealed regulations, any penalty, forfeiture or punishment incurred in respect of any offence
committed against the repealed regulations, or any investigation, legal proceeding or remedy in
respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as
aforesaid, shall remain unaffected as if the repealed regulations had never been repealed; and
(b) anything done or any action taken or purported to have been done or taken including any
adjudication, enquiry or investigation commenced or show-cause notice issued under the
repealed regulations prior to such repeal, shall be deemed to have been done or taken under the
corresponding provisions of these regulations;
(3) After the repeal of Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 1992, any reference thereto in any other regulations made, guidelines or
circulars issued thereunder by the Board shall be deemed to be a reference to the corresponding
provisions of these regulations.
SCHEDULE A
[See sub-regulation (1) of regulation 8]
Principles of Fair Disclosure for purposes of Code of Practices and Procedures for Fair
Disclosure of Unpublished Price Sensitive Information
1. Prompt public disclosure of unpublished price sensitive information that would impact
price discovery no sooner than credible and concrete information comes into being in order to
make such information generally available.
2. Uniform and universal dissemination of unpublished price sensitive unpublished price

sensitive information to avoid selective disclosure.
3. Designation of a senior officer as a chief investor relations officer to deal with

dissemination of information and disclosure of unpublished price sensitive information.
4. Prompt dissemination of unpublished price sensitive information that gets disclosed

selectively, inadvertently or otherwise to make such information generally available.
5. Appropriate and fair response to queries on news reports and requests for verification of
market rumours by regulatory authorities.
6. Ensuring that information shared with analysts and research personnel is not unpublished
price sensitive information.
7. Developing best practices to make transcripts or records of proceedings of meetings with

analysts and other investor relations conferences on the official website to ensure official
confirmation and documentation of disclosures made.
8. Handling of all unpublished price sensitive information on a need-to-know basis.

SCHEDULE B
[See sub-regulation (1) 38[***] of regulation 9]
Minimum Standards for Code of Conduct 39[for Listed Companies] to Regulate,

Monitor and Report Trading by 40[Designated Persons]
1. The compliance officer shall report to the board of directors and in particular, shall
provide reports to the Chairman of the Audit Committee, if any, or to the Chairman of the board
of directors at such frequency as may be stipulated by the board of directors, 41[but not less than
once in a year].
2. All information shall be handled within the organisation on a need-to-know basis and no
unpublished price sensitive information shall be communicated to any person except in
42 43
furtherance of [***] legitimate purposes, performance of duties or discharge of [***] legal
obligations. The code of conduct shall contain norms for appropriate Chinese Walls procedures,
and processes for permitting any designated person to “cross the wall”.
44
3. [Designated Persons and immediate relatives of designated persons] in the organisation
45
shall be governed by an internal code of conduct governing dealing in securities. [***]
38
2018 (w.e.f. April 01, 2019) which earlier read as “and sub-regulation (2)”.
39
2018 (w.e.f. April 01, 2019).
40
Substituted for the word “Insiders” by Securities and Exchange Board of India (Prohibition of Insider Trading)
41
2018 (w.e.f. April 01, 2019).
42
2018 (w.e.f. April 01, 2019) which earlier read as “the insider’s”.
43
2018 (w.e.f. April 01, 2019) which earlier read as “his”.
44
Substituted for the words “Employees and connected persons designated on the basis of their functional role
(“designated persons”)” by Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment)
Regulations, 2018 (w.e.f. April 01, 2019).
45
2018 (w.e.f. April 01, 2019) which earlier read as below:
“The board of directors shall in consultation with the compliance officer specify the designated persons to be
covered by such code on the basis of their role and function in the organisation. Due regard shall be had to the
4. Designated persons may execute trades subject to compliance with these regulations.
Towards this end, a notional trading window shall be used as an instrument of monitoring trading
by the designated persons. The trading window shall be closed when the compliance officer
determines that a designated person or class of designated persons can reasonably be expected to
have possession of unpublished price sensitive information. Such closure shall be imposed in
relation to such securities to which such unpublished price sensitive information relates.
Designated persons and their immediate relatives shall not trade in securities when the trading
window is closed.
46
[Trading restriction period can be made applicable from the end of every quarter till 48 hours
after the declaration of financial results.
The gap between clearance of accounts by audit committee and board meeting should be as
narrow as possible and preferably on the same day to avoid leakage of material information.]
5. The timing for re-opening of the trading window shall be determined by the compliance
officer taking into account various factors including the unpublished price sensitive information
in question becoming generally available and being capable of assimilation by the market, which
in any event shall not be earlier than forty-eight hours after the information becomes generally
available. 47[***]
access that such role and function would provide to unpublished price sensitive information in addition to seniority
and professional designation.”
46
2018 (w.e.f. April 01, 2019).
47
“The trading window shall also be applicable to any person having contractual or fiduciary relation with the
company, such as auditors, accountancy firms, law firms, analysts, consultants etc., assisting or advising the
company.”
6. When the trading window is open, trading by designated persons shall be subject to pre-
clearance by the compliance officer, if the value of the proposed trades is above such thresholds
48
as the board of directors may stipulate. [***]
49
7. [***]
8. Prior to approving any trades, the compliance officer shall be entitled to seek declarations
to the effect that the applicant for pre-clearance is not in possession of any unpublished price
sensitive information. He shall also have regard to whether any such declaration is reasonably
capable of being rendered inaccurate.
9. The code of conduct shall specify any reasonable timeframe, which in any event shall not
be more than seven trading days, within which trades that have been pre-cleared have to be
executed by the designated person, failing which fresh pre-clearance would be needed for the
trades to be executed.
10. The code of conduct shall specify the period, which in any event shall not be less than six
months, within which a designated person who is permitted to trade shall not execute a contra
trade. The compliance officer may be empowered to grant relaxation from strict application of
such restriction for reasons to be recorded in writing provided that such relaxation does not
violate these regulations. Should a contra trade be executed, inadvertently or otherwise, in
violation of such a restriction, the profits from such trade shall be liable to be disgorged for
remittance to the Board for credit to the Investor Protection and Education Fund administered by
the Board under the Act.
50
[Provided that this shall not be applicable for trades pursuant to exercise of stock options.]
48
“No designated person shall apply for pre-clearance of any proposed trade if such designated person is in possession
of unpublished price sensitive information even if the trading window is not closed.”
49
“The compliance officer shall confidentially maintain a list of such securities as a “restricted list” which shall be
used as the basis for approving or rejecting applications for preclearance of trades.”
11. The code of conduct shall stipulate such formats as the board of directors deems
necessary for making applications for pre-clearance, reporting of trades executed, reporting of
51
decisions not to trade after securing pre-clearance [***] and for reporting level of holdings in
securities at such intervals as may be determined as being necessary to monitor compliance with
these regulations.
12. Without prejudice to the power of the Board under the Act, the code of conduct shall
52
stipulate the sanctions and disciplinary actions, including wage freeze, suspension, [recovery,
53
clawback] etc., that may be imposed, by the [listed company] required to formulate a code of
54
conduct under sub-regulation (1) [***]of regulation 9, for the contravention of the code of
conduct.
55
13. The code of conduct shall specify that in case it is observed by the [listed company]
56
required to formulate a code of conduct under sub-regulation (1) [***]of regulation 9, that
there has been a violation of these regulations, 57[it] shall inform the Board promptly.
58
[14. Designated persons shall be required to disclose names and Permanent Account Number
or any other identifier authorized by law of the following persons to the company on an annual
basis and as and when the information changes:
50
2018 (w.e.f. April 01, 2019).
51
2018 (w.e.f. April 01, 2019) which earlier read as “recording of reasons for such decisions”.
52
2018 (w.e.f. April 01, 2019).
53
Substituted for the word “persons” by Securities and Exchange Board of India (Prohibition of Insider Trading)
54
2018 (w.e.f. April 01, 2019) which earlier read as “and sub-regulation (2)”
55
Substituted for the word “persons” by Securities and Exchange Board of India (Prohibition of Insider Trading)
56
2018 (w.e.f. April 01, 2019) which earlier read as “and sub-regulation (2)”
57
Substituted for the word “they” by Securities and Exchange Board of India (Prohibition of Insider Trading)
58
2018 (w.e.f. April 01, 2019).
a) immediate relatives
b) persons with whom such designated person(s) shares a material financial
relationship
c) Phone, mobile and cell numbers which are used by them
In addition, the names of educational institutions from which designated persons have graduated
and names of their past employers shall also be disclosed on a one time basis.
Explanation – The term “material financial relationship” shall mean a relationship in which one
person is a recipient of any kind of payment such as by way of a loan or gift during the
immediately preceding twelve months, equivalent to at least 25% of such payer’s annual income
but shall exclude relationships in which the payment is based on arm’s length transactions.]
59
[15. Listed entities shall have a process for how and when people are brought ‘inside’ on
sensitive transactions. Individuals should be made aware of the duties and responsibilities
attached to the receipt of Inside Information, and the liability that attaches to misuse or
unwarranted use of such information.]
59
2018 (w.e.f. April 01, 2019).
60[SCHEDULE C
[See sub-regulation (1) and sub-regulation (2) of regulation 9]
Minimum Standards for Code of Conduct for Intermediaries and Fiduciaries to Regulate,
Monitor and Report Trading by Designated Persons
1. The compliance officer shall report to the board of directors or head(s) of the organisation (or
committee constituted in this regard) and in particular, shall provide reports to the Chairman of
the Audit Committee or other analogous body, if any, or to the Chairman of the board of
directors or head(s) of the organisation at such frequency as may be stipulated by the board of
directors or head(s) of the organization but not less than once in a year.
2. All information shall be handled within the organisation on a need-to-know basis and no
unpublished price sensitive information shall be communicated to any person except in
furtherance of legitimate purposes, performance of duties or discharge of legal obligations. The
code of conduct shall contain norms for appropriate Chinese Wall procedures, and processes for
permitting any designated person to “cross the wall”.
3. Designated persons and immediate relatives of designated persons in the organisation shall be
governed by an internal code of conduct governing dealing in securities.
4. Designated persons may execute trades subject to compliance with these regulations. Trading
by designated persons shall be subject to pre- clearance by the compliance officer(s), if the value
of the proposed trades is above such thresholds as the board of directors or head(s) of the
organisation may stipulate.
5. The compliance officer shall confidentially maintain a list of such securities as a “restricted
list” which shall be used as the basis for approving or rejecting applications for pre-clearance of
trades.
60
2018 (w.e.f. April 01, 2019).
6. Prior to approving any trades, the compliance officer shall seek declarations to the effect that
the applicant for pre-clearance is not in possession of any unpublished price sensitive
information. He shall also have regard to whether any such declaration is reasonably capable of
being rendered inaccurate.
7. The code of conduct shall specify any reasonable timeframe, which in any event shall not be
more than seven trading days, within which trades that have been pre-cleared have to be
executed by the designated person, failing which fresh pre-clearance would be needed for the
trades to be executed.
8. The code of conduct shall specify the period, which in any event shall not be less than six
months, within which a designated person who is a connected person of the listed company and
is permitted to trade in the securities of such listed company, shall not execute a contra trade.
The compliance officer may be empowered to grant relaxation from strict application of such
restriction for reasons to be recorded in writing provided that such relaxation does not violate
these regulations. Should a contra trade be executed, inadvertently or otherwise, in violation of
such a restriction, the profits from such trade shall be liable to be disgorged for remittance to the
Board for credit to the Investor Protection and Education Fund administered by the Board under
the Act.
Provided that this shall not be applicable for trades pursuant to exercise of stock options.
9. The code of conduct shall stipulate such formats as the board of directors or head(s) of the
organisation (or committee constituted in this regard) deems necessary for making applications
for pre-clearance, reporting of trades executed, reporting of decisions not to trade after securing
pre-clearance, and for reporting level of holdings in securities at such intervals as may be
determined as being necessary to monitor compliance with these regulations.
10. Without prejudice to the power of the Board under the Act, the code of conduct shall
stipulate the sanctions and disciplinary actions, including wage freeze, suspension, recovery,
clawback etc., that may be imposed, by the intermediary or fiduciary required to formulate a
code of conduct under sub-regulation (1) and sub-regulation (2) of regulation 9, for the
contravention of the code of conduct.
11. The code of conduct shall specify that in case it is observed by the intermediary or fiduciary
required to formulate a code of conduct under sub-regulation (1) or sub-regulation (2) of
regulation 9, respectively, that there has been a violation of these regulations, such intermediary
or fiduciary shall inform the Board promptly.
12. All designated persons shall be required to disclose name and Permanent Account Number or
any other identifier authorized by law of the following to the intermediary or fiduciary on an
annual basis and as and when the information changes:
a) immediate relatives
b) persons with whom such designated person(s) shares a material financial relationship
c) Phone, mobile, and cell numbers which are used by them
In addition, names of educations institutions from which designated persons have studied and
names of their past employers shall also be disclosed on a one time basis.
Explanation – the term “material financial relationship” shall mean a relationship in which one
person is a recipient of any kind of payment such as by way of a loan or gift during the
immediately preceding twelve months, equivalent to at least 25% of such payer’s annual income
but shall exclude relationships in which the payment is based on arm’s length transactions.
13. Intermediaries and fiduciaries shall have a process for how and when people are brought
‘inside’ on sensitive transactions. Individuals should be made aware of the duties and
responsibilities attached to the receipt of Inside Information, and the liability that attaches to
misuse or unwarranted use of such information.]
U. K. SINHA
CHAIRMAN
THE GAZETTE OF INDIA
EXTRAORDINARY
NEW DELHI, SEPTEMBER 23, 2011
NOTIFICATION
Mumbai, 23rd September, 2011
SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL
ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 2011
F. No. LAD-NRO/GN/2011-12/24/30181.—In exercise of the powers conferred under

section 30 read with clause (h) of sub-section (2) of section 11 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992) the Securities and Exchange Board of
India hereby, makes the following regulations, namely: —
CHAPTER - I
PRELIMINARY
Short title, commencement and applicability.
1. (1) These regulations may be called the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
(2) These regulations shall come into force on the thirtieth day from the date of their
publication in the Official Gazette.
(3) These regulations shall apply to direct and indirect acquisition of shares or voting
rights in, or control over target company 1[:]
2
[Provided that these regulations shall not apply to direct and indirect acquisition of
1
Substituted by the SEBI (Listing of Specified Securities on Institutional Trading Platform) Regulations,
2013, for the full stop.
Page 1 of 71
shares or voting rights in, or control over a company listed without making a public
issue, on the institutional trading platform of a recognised stock exchange.]
Definitions.
2. (1) In these regulations, unless the context otherwise requires, the terms defined
herein shall bear the meanings assigned to them below, and their cognate
expressions and variations shall be construed accordingly,—
(a) “acquirer” means any person who, directly or indirectly, acquires or
agrees to acquire whether by himself, or through, or with persons acting
in concert with him, shares or voting rights in, or control over a target
company;
(b) “acquisition” means, directly or indirectly, acquiring or agreeing to
acquire shares or voting rights in, or control over, a target company;
(c) “Act” means the Securities and Exchange Board of India Act, 1992 (15
of 1992);
(d) “Board” means the Securities and Exchange Board of India established
under section 3 of the Act;
(e) “control” includes the right to appoint majority of the directors or to
control the management or policy decisions exercisable by a person or
persons acting individually or in concert, directly or indirectly, including
by virtue of their shareholding or management rights or shareholders
agreements or voting agreements or in any other manner:
Provided that a director or officer of a target company shall not be
considered to be in control over such target company, merely by virtue of
holding such position;
(f) “convertible security” means a security which is convertible into or ex-
changeable with equity shares of the issuer at a later date, with or without
the option of the holder of the security, and includes convertible debt
instruments and convertible preference shares;
2
Proviso substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Third Amendment)
Regulations, 2015, w.e.f. 14-8-2015. Prior to its substitution, said Proviso, as inserted by the SEBI (Listing of
Specified Securities on Institutional Trading Platform) Regulations, 2013, w.e.f. 8-10-2013, read as under :
“Provided that these regulations shall not apply to direct and indirect acquisition of shares or voting rights in,
or control over a company listed on the institutional trading platform of a recognized stock exchange”
Page 2 of 71
(g) “disinvestment” means the direct or indirect sale by the Central
Government or any State Government or by a government company, as
the case may be, of shares or voting rights in, or control over, a target
company, which is a public sector undertaking;
(h) “enterprise value” means the value calculated as market capitalization of
a company plus debt, minority interest and preferred shares, minus total
cash and cash equivalents;
(i) “financial year” means the period of twelve months commencing on the
first day of the month of April;
(j) “frequently traded shares” means shares of a target company, in which
the traded turnover on any stock exchange during the twelve calendar
months preceding the calendar month in which the public announcement
3
[is required to be made under these regulations], is at least ten per cent
of the total number of shares of such class of the target company:
Provided that where the share capital of a particular class of shares
of the target company is not identical throughout such period, the
weighted average number of total shares of such class of the target
company shall represent the total number of shares;
4
[(ja) “fugitive economic offender” shall mean an individual who is declared a
fugitive economic offender under section 12 of the Fugitive Economic
Offenders Act, 2018 (17 of 2018)]
(k) “identified date” means the date falling on the tenth working day prior to
the commencement of the tendering period, for the purposes of
determining the shareholders to whom the letter of offer shall be sent;
(l) “immediate relative” means any spouse of a person, and includes parent,
brother, sister or child of such person or of the spouse;
(m) “listing agreement” means the agreement with the stock exchange
governing the conditions of listing of shares of the target company;
3
Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment)
Regulations, 2018, w.e.f. 11-09-2018. Prior to the amendment, it read as “is made”.
4
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations,
2018, w.e.f. 11-09-2018.
Page 3 of 71
5
[(ma) “listing regulations” means the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015.]
(n) “manager to the open offer” means a merchant banker referred to in
regulation 12;
(o) “maximum permissible non-public shareholding” means such percentage
shareholding in the target company excluding the minimum public
shareholding required under the Securities Contracts (Regulation) Rules,
1957;
(p) “offer period” means the period between the date of entering into an
agreement, formal or informal, to acquire shares, voting rights in, or
control over a target company requiring a public announcement, or the
date of the public announcement, as the case may be, and the date on
which the payment of consideration to shareholders who have accepted
the open offer is made, or the date on which open offer is withdrawn, as
the case may be;
(q) “persons acting in concert” means,—
(1) persons who, with a common objective or purpose of acquisition
of shares or voting rights in, or exercising control over a target
company, pursuant to an agreement or understanding, formal or
informal, directly or indirectly co-operate for acquisition of shares
or voting rights in, or exercise of control over the target company.
(2) Without prejudice to the generality of the foregoing, the persons
falling within the following categories shall be deemed to be
persons acting in concert with other persons within the same
category, unless the contrary is established,—
(i) a company, its holding company, subsidiary company and
any company under the same management or control;
(ii) a company, its directors, and any person entrusted with the
management of the company;
5
2018, w.e.f. 11-09-2018.
Page 4 of 71
(iii) directors of companies referred to in item (i) and (ii) of
this sub-clause and associates of such directors;
(iv) promoters and members of the promoter group;
(v) immediate relatives;
(vi) a mutual fund, its sponsor, trustees, trustee company, and
asset management company;
(vii) a collective investment scheme and its collective
investment management company, trustees and trustee
company;
(viii) a venture capital fund and its sponsor, trustees, trustee
company and asset management company;
6
[(viiia) an alternative investment fund and its sponsor, trustees,
trustee company and manager;]
7
(ix) [***]
(x) a merchant banker and its client, who is an acquirer;
(xi) a portfolio manager and its client, who is an acquirer;
(xii) banks, financial advisors and stock brokers of the acquirer,
or of any company which is a holding company or
subsidiary of the acquirer, and where the acquirer is an
individual, of the immediate relative of such individual:
Provided that this sub-clause shall not apply to a
bank whose sole role is that of providing normal
commercial banking services or activities in relation to an
open offer under these regulations;
(xiii) an investment company or fund and any person who has
an interest in such investment company or fund as a
shareholder or unitholder having not less than 10 per cent
of the paid-up capital of the investment company or unit
6
Inserted by the SEBI (Alternative Investment Funds) Regulations, 2012, w.e.f. 21-5-2012.
7 Omitted by the SEBI (Foreign Portfolio Investors) Regulations, 2014, w.e.f. 7-1-2014. Prior to its omission,
item (ix) read as under :
"(ix) a foreign institutional investor and its sub-accounts;"
Page 5 of 71
capital of the fund, and any other investment company or
fund in which such person or his associate holds not less
than 10 per cent of the paid-up capital of that investment
company or unit capital of that fund:
Provided that nothing contained in this sub-clause
shall apply to holding of units of mutual funds registered
with the Board;
Explanation.— For the purposes of this clause “associate” of a
person means,—
(a) any immediate relative of such person;
(b) trusts of which such person or his immediate relative
is a trustee;
(c) partnership firm in which such person or his
immediate relative is a partner; and
(d) members of Hindu undivided families of which such
person is a coparcener;
(r) 8
[“postal ballot” means a postal ballot as provided for under Rule 22 of
the Companies (Management and Administration) Rules, 2014 made
under the Companies Act, 2013;]
(s) “promoter” has the same meaning as in the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 and includes a member of the promoter group;
(t) “promoter group” has the same meaning as in the Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009;
(u) “public sector undertaking” means a target company in which, directly or
indirectly, majority of shares or voting rights or control is held by the
Central Government or any State Government or Governments, or partly
8
Regulations, 2018, w.e.f. 11-09-2018. Prior to the amendment, the clause read as:
“(r) “postal ballot” means a postal ballot as provided for under the Companies (Passing of the Resolution by
Postal Ballot) Rules, 2001 made under the Companies Act, 1956 (1 of 1956)”
Page 6 of 71
by the Central Government and partly by one or more State
Governments;
(v) “shares” means shares in the equity share capital of a target company
carrying voting rights, and includes any security which entitles the holder
thereof to exercise voting rights;
Explanation.— For the purpose of this clause shares will include all
depository receipts carrying an entitlement to exercise voting rights in the
target company;
(w) “specified” means as specified by the Board;
(x) “state-level financial institution” means a Financial Corporation
established under section 3 or section 3A and institutions notified under
section 46 of the State Financial Corporations Act, 1951 (63 of 1951),
and includes a development corporation established as a company by a
State Government with the object of development of industries or
agricultural activities in the state;
(y) “stock exchange” means a stock exchange which has been granted
recognition under section 4 of the Securities Contracts (Regulation) Act,
1956 (42 of 1956);
(z) “target company” means a company and includes a body corporate or
corporation established under a Central legislation, State legislation or
Provincial legislation for the time being in force, whose shares are listed
on a stock exchange;
(za) “tendering period” means the period within which shareholders may tender
their shares in acceptance of an open offer to acquire shares made under
these regulations;
(zb) “volume weighted average market price” means the product of the number
of equity shares traded on a stock exchange and the price of each equity
share divided by the total number of equity shares traded on the stock
exchange;
Page 7 of 71
(zc) “volume weighted average price” means the product of the number of
equity shares bought and price of each such equity share divided by the
total number of equity shares bought;
(zd) “weighted average number of total shares” means the number of shares at
the beginning of a period, adjusted for shares cancelled, bought back or
issued during the aforesaid period, multiplied by a time-weighing factor;
9
[(ze) “wilful defaulter” means any person who is categorized as a wilful
defaulter by any bank or financial institution or consortium thereof, in
accordance with the guidelines on wilful defaulters issued by the Reserve
Bank of India and includes any person whose director, promoter or
partner is categorized as such;]
10
[(zf)] “working day” means any working day of the Board.
(2) All other expressions unless defined herein shall have the same meaning as have been
assigned to them under the Act or the Securities Contracts (Regulation) Act, 1956,
11
(42 of 1956) or the [Companies Act, 2013 (18 of 2013)], or any statutory
modification or re-enactment thereto, as the case may be.
CHAPTER -II
SUBSTANTIAL ACQUISITION OF SHARES, VOTING RIGHTS OR CONTROL
Substantial acquisition of shares or voting rights.
3. (1) No acquirer shall acquire shares or voting rights in a target company which taken
together with shares or voting rights, if any, held by him and by persons acting in
concert with him in such target company, entitle them to exercise twenty-five per
cent or more of the voting rights in such target company unless the acquirer
makes a public announcement of an open offer for acquiring shares of such
target company in accordance with these regulations.
9
2016, w.e.f. 25-05-2016.
10
Clause (ze) renumbered as clause “(zf)” by the SEBI (Substantial Acquisition of Shares and Takeovers)
(Second Amendment) Regulations, 2016, w.e.f. 25-05-2016.
11
Regulations, 2018, w.e.f. 11-09-2018. Prior to the amendment, it read as “Companies Act, 1956 (1 of 1956)”.
Page 8 of 71
(2) No acquirer, who together with persons acting in concert with him, has acquired
and holds in accordance with these regulations shares or voting rights in a target
company entitling them to exercise twenty-five per cent or more of the voting
rights in the target company but less than the maximum permissible non-public
shareholding, shall acquire within any financial year additional shares or voting
rights in such target company entitling them to exercise more than five per cent
of the voting rights, unless the acquirer makes a public announcement of an open
offer for acquiring shares of such target company in accordance with these
regulations:
12
[Provided that the acquisition beyond five per cent but upto ten per cent of
the voting rights in the target company shall be permitted for the financial year
2020-21 only in respect of acquisition by a promoter pursuant to preferential
issue of equity shares by the target company.]
Provided that such acquirer shall not be entitled to acquire or enter into any
agreement to acquire shares or voting rights exceeding such number of shares as
would take the aggregate shareholding pursuant to the acquisition above the
maximum permissible non-public shareholding.
13[Provided further that, acquisition pursuant to a resolution plan approved under
section 31 of the Insolvency and Bankruptcy Code, 2016 [No. 31 of 2016] shall
be exempt from the obligation under the proviso to the sub-regulation (2) of
regulation 3.]
Explanation.— For purposes of determining the quantum of acquisition of
additional voting rights under this sub-regulation,—
(i) gross acquisitions alone shall be taken into account regardless of any
intermittent fall in shareholding or voting rights whether owing to disposal
of shares held or dilution of voting rights owing to fresh issue of shares by
the target company.
12
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2020,
w.e.f. 16-06-2020.
13
w.e.f. 31-05-2018.
Page 9 of 71
(ii) in the case of acquisition of shares by way of issue of new shares by the
target company or where the target company has made an issue of new
shares in any given financial year, the difference between the pre-
allotment and the post-allotment percentage voting rights shall be regarded
as the quantum of additional acquisition .
(3) For the purposes of sub-regulation (1) and sub-regulation (2), acquisition of
shares by any person, such that the individual shareholding of such person
acquiring shares exceeds the stipulated thresholds, shall also be attracting the
obligation to make an open offer for acquiring shares of the target company
irrespective of whether there is a change in the aggregate shareholding with
persons acting in concert.
14
[(4) Nothing contained in this regulation shall apply to acquisition of shares or
voting rights of a company by the promoters or shareholders in control, in terms
of the provisions of Chapter VI-A of Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009.]
Acquisition of control.
4. Irrespective of acquisition or holding of shares or voting rights in a target company,
no acquirer shall acquire, directly or indirectly, control over such target company
unless the acquirer makes a public announcement of an open offer for acquiring
shares of such target company in accordance with these regulations.
Indirect acquisition of shares or control.
5. (1) For the purposes of regulation 3 and regulation 4, acquisition of shares or voting
rights in, or control over, any company or other entity, that would enable any
person and persons acting in concert with him to exercise or direct the exercise
of such percentage of voting rights in, or control over, a target company, the
acquisition of which would otherwise attract the obligation to make a public
announcement of an open offer for acquiring shares under these regulations,
14
w.e.f. 17-02-2016.
Page 10 of 71
shall be considered as an indirect acquisition of shares or voting rights in, or
control over the target company.
(2) Notwithstanding anything contained in these regulations, in the case of an
indirect acquisition attracting the provisions of sub-regulation (1) where,—
(a) the proportionate net asset value of the target company as a percentage of
the consolidated net asset value of the entity or business being acquired;
(b) the proportionate sales turnover of the target company as a percentage of
the consolidated sales turnover of the entity or business being acquired; or
(c) the proportionate market capitalisation of the target company as a
percentage of the enterprise value for the entity or business being
acquired;
is in excess of eighty per cent, on the basis of the most recent audited annual
financial statements, such indirect acquisition shall be regarded as a direct
acquisition of the target company for all purposes of these regulations including
without limitation, the obligations relating to timing, pricing and other
compliance requirements for the open offer.
Explanation.— For the purposes of computing the percentage referred to in
clause (c) of this sub-regulation, the market capitalisation of the target company
shall be taken into account on the basis of the volume-weighted average market
price of such shares on the stock exchange for a period of sixty trading days
preceding the earlier of, the date on which the primary acquisition is contracted,
and the date on which the intention or the decision to make the primary
acquisition is announced in the public domain, as traded on the stock exchange
where the maximum volume of trading in the shares of the target company are
recorded during such period.
15[Delisting offer.
5A. (1) Notwithstanding anything contained in these regulations, in the event the acquirer
makes a public announcement of an open offer for acquiring shares of a target company in
15
w.e.f. 24-03-2015.
Page 11 of 71
terms of regulations 3, 4 or 5, he may delist the company in accordance with provisions of
the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009:
Provided that the acquirer shall have declared upfront his intention to so delist at the
time of making the detailed public statement 16[and a subsequent declaration of delisting
for the purpose of the offer proposed to be made under sub regulation (1) will not suffice].
(2) Where an offer made under sub-regulation (1) is not successful,-
(i) on account of non–receipt of prior approval of shareholders in terms of clause (b) of
sub-regulation (1) of regulation 8 of Securities and Exchange Board of India (Delisting
of Equity Shares) Regulations, 2009; or
(ii) in terms of regulation 17 of Securities and Exchange Board of India (Delisting of
Equity Shares) Regulations, 2009; or
(iii) on account of the acquirer rejecting the discovered price determined by the book
building process in terms of sub-regulation (1) of regulation 16 of Securities and
Exchange Board of India (Delisting of Equity Shares) Regulations, 2009,
the acquirer shall make an announcement within two working days in respect of such
failure in all the newspapers in which the detailed public statement was made and shall
comply with all applicable provisions of these regulations.
17
[(3) In the event of failure of the delisting offer made under sub-regulation (1), the open
offer obligations shall be fulfilled by the acquirer in the following manner:
(i) the acquirer, through the manager to the open offer, shall within five working days
from the date of the announcement under sub-regulation (2), file with the Board, a
draft of the letter of offer as specified in sub-regulation (1) of regulation 16; and
(ii) shall comply with all other applicable provisions of these regulations.
16
2018, w.e.f. 11-09-2018.
17
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, the sub-regulation read as:
“(3) In the event of the failure of the delisting offer made under sub-regulation (1), the acquirer, through the
manager to the open offer, shall within five working days from the date of the announcement under sub-
regulation (2), file with the Board, a draft of the letter of offer as specified in sub-regulation (1) of regulation
16 and shall comply with all other applicable provisions of these regulations:
Provided that the offer price shall stand enhanced by an amount equal to a sum determined at the rate of ten
per cent per annum for the period between the scheduled date of payment of consideration to the shareholders
and the actual date of payment of consideration to the shareholders
Explanation: For the purpose of this sub-regulation, scheduled date shall be the date on which the payment of
consideration ought to have been made to the shareholders in terms of the timelines in these regulations.”
Page 12 of 71
Provided that the offer price shall stand enhanced by an amount equal to a sum
determined at the rate of ten per cent per annum for the period between the scheduled
date of payment of consideration to the shareholders and the actual date of payment of
consideration to the shareholders.
Explanation: For the purpose of this sub-regulation, scheduled date shall be the date on
which the payment of consideration ought to have been made to the shareholders in
terms of the timelines in these regulations.]
(4) Where a competing offer is made in terms of sub-regulation (1) of regulation 20,-
(a) the acquirer shall not be entitled to delist the company;
(b) the acquirer shall not be liable to pay interest to the shareholders on account of
delay due to competing offer;
(c) the acquirer shall comply with all the applicable provisions of these regulations and
make an announcement in this regard, within two working days from the date of public
announcement made in terms of sub-regulation (1) of regulation 20, in all the
newspapers in which the detailed public statement was made.
(5) Shareholders who have tendered shares in acceptance of the offer made under sub-
regulation (1), shall be entitled to withdraw such shares tendered, within 10 working days
from the date of the announcement under sub-regulation (2) .
(6) Shareholders who have not tendered their shares in acceptance of the offer made under
sub-regulation (1) shall be entitled to tender their shares in acceptance of the offer made
under these regulations.]
Voluntary Offer.
6. (1) An acquirer, who together with persons acting in concert with him, holds shares
or voting rights in a target company entitling them to exercise twenty-five per
cent or more but less than the maximum permissible non-public shareholding,
shall be entitled to voluntarily make a public announcement of an open offer for
acquiring shares in accordance with these regulations, subject to their aggregate
shareholding after completion of the open offer not exceeding the maximum
permissible non-public shareholding:
Provided that where an acquirer or any person acting in concert with
him has acquired shares of the target company in the preceding fifty-two weeks
Page 13 of 71
without attracting the obligation to make a public announcement of an open offer,
he shall not be eligible to voluntarily make a public announcement of an open
offer for acquiring shares under this regulation:
18[The relaxation from the first proviso is granted till March 31, 2021.]
Provided further that during the offer period such acquirer shall not
be entitled to acquire any shares otherwise than under the open offer.
(2) An acquirer and persons acting in concert with him, who have made a public
announcement under this regulation to acquire shares of a target company shall
not be entitled to acquire any shares of the target company for a period of six
months after completion of the open offer except pursuant to another voluntary
open offer:
Provided that such restriction shall not prohibit the acquirer from
making a competing offer upon any other person making an open offer for
acquiring shares of the target company.
(3) Shares acquired through bonus issue or stock splits shall not be considered for
purposes of the dis-entitlement set out in this regulation.
19
[6A. Notwithstanding anything contained in these regulations, no person who is a wilful
defaulter shall make a public announcement of an open offer for acquiring shares or enter
into any transaction that would attract the obligation to make a public announcement of an
open offer for acquiring shares under these regulations:
Provided that this regulation shall not prohibit the wilful defaulter from making a
competing offer in accordance with regulation 20 of these regulations upon any other
person making an open offer for acquiring shares of the target company.]
20[6B. Notwithstanding anything contained in these regulations, no person who is a fugitive
economic offender shall make a public announcement of an open offer or make a
18
w.e.f. 16-06-2020.
19
2016, w.e.f. 25-05-2016.
20
2018, w.e.f. 11-09-2018.
Page 14 of 71
competing offer for acquiring shares or enter into any transaction, either directly or
indirectly, for acquiring any shares or voting rights or control of a target company.]
Offer Size.
7. (1) The open offer for acquiring shares to be made by the acquirer and persons acting
in concert with him under regulation 3 and regulation 4 shall be for at least
twenty six per cent of total shares of the target company, as of tenth working
day from the closure of the tendering period:
Provided that the total shares of the target company as of tenth
working day from the closure of the tendering period shall take into account all
potential increases in the number of outstanding shares during the offer period
contemplated as of the date of the public announcement:
Provided further that the offer size shall be proportionately
increased in case of an increase in total number of shares, after the public
announcement, which is not contemplated on the date of the public
announcement.
(2) The open offer made under regulation 6 shall be for acquisition of at least such
number of shares as would entitle the holder thereof to exercise an additional ten
per cent of the 21[voting rights in] the target company, and shall not exceed such
number of shares as would result in the post-acquisition holding of the acquirer
and persons acting in concert with him exceeding the maximum permissible non-
public shareholding applicable to such target company:
Provided that in the event of a competing offer being made, the
acquirer who has voluntarily made a public announcement of an open offer under
regulation 6 shall be entitled to increase the number of shares for which the open
offer has been made to such number of shares as he deems fit:
Provided further that such increase in offer size shall have to be
made within a period of fifteen working days from the public announcement of a
competing offer, failing which the acquirer shall not be entitled to increase the
offer size.
21
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “total shares of”.
Page 15 of 71
(3) Upon an acquirer opting to increase the offer size under sub-regulation (2), such
open offer shall be deemed to have been made under sub-regulation (2) of
regulation 3 and the provisions of these regulations shall apply accordingly.
(4) In the event the shares accepted in the open offer were such that the shareholding
of the acquirer taken together with persons acting in concert with him pursuant to
completion of the open offer results in their shareholding exceeding the
maximum permissible non-public shareholding, the acquirer shall be required to
bring down the non-public shareholding to the level specified and within the time
permitted under Securities Contract (Regulation) Rules, 1957.
(5) The acquirer whose shareholding exceeds the maximum permissible non-public
shareholding, pursuant to an open offer under these regulations, shall not be
eligible to make a voluntary delisting offer under the Securities and Exchange
Board of India (Delisting of Equity Shares) Regulations, 2009, unless a period of
twelve months has elapsed from the date of the completion of the offer period.
(6) Any open offer made under these regulations shall be made to all shareholders of
the target company, other than the acquirer, persons acting in concert with him
and the parties to any underlying agreement including persons deemed to be
acting in concert with such parties, for the sale of shares of the target company.
Offer Price.
8. (1) The open offer for acquiring shares under regulation 3, regulation 4, regulation 5
or regulation 6 shall be made at a price not lower than the price determined in
accordance with sub-regulation (2) or sub-regulation (3), as the case may be.
(2) In the case of direct acquisition of shares or voting rights in, or control over the
target company, and indirect acquisition of shares or voting rights in, or control
over the target company where the parameters referred to in sub-regulation (2) of
regulation 5 are met, the offer price shall be the highest of,—
(a) the highest negotiated price per share of the target company for any
acquisition under the agreement attracting the obligation to make a public
announcement of an open offer;
Page 16 of 71
(b) the volume-weighted average price paid or payable for acquisitions,
whether by the acquirer or by any person acting in concert with him,
during the fifty-two weeks immediately preceding the date of the public
announcement;
(c) the highest price paid or payable for any acquisition, whether by the
acquirer or by any person acting in concert with him, during the twenty-
six weeks immediately preceding the date of the public announcement;
(d) the volume-weighted average market price of such shares for a period of
sixty trading days immediately preceding the date of the public
announcement as traded on the stock exchange where the maximum
volume of trading in the shares of the target company are recorded during
such period, provided such shares are frequently traded;
(e) where the shares are not frequently traded, the price determined by the
acquirer and the manager to the open offer taking into account valuation
parameters including, book value, comparable trading multiples, and such
other parameters as are customary for valuation of shares of such
companies; and
(f) the per share value computed under sub-regulation (5), if applicable.
(3) In the case of an indirect acquisition of shares or voting rights in, or control over
the target company, where the parameter referred to in sub-regulation (2) of
regulation 5 are not met, the offer price shall be the highest of,—
(a) the highest negotiated price per share, if any, of the target company for any
acquisition under the agreement attracting the obligation to make a public
announcement of an open offer;
(b) the volume-weighted average price paid or payable for any acquisition,
whether by the acquirer or by any person acting in concert with him, during
the fifty-two weeks immediately preceding the earlier of, the date on which
the primary acquisition is contracted, and the date on which the intention or
the decision to make the primary acquisition is announced in the public
domain;
Page 17 of 71
(c) the highest price paid or payable for any acquisition, whether by the acquirer
or by any person acting in concert with him, during the twenty-six weeks
immediately preceding the earlier of, the date on which the primary
acquisition is contracted, and the date on which the intention or the decision
to make the primary acquisition is announced in the public domain;
(d) the highest price paid or payable for any acquisition, whether by the acquirer
or by any person acting in concert with him, between the earlier of, the date
on which the primary acquisition is contracted, and the date on which the
intention or the decision to make the primary acquisition is announced in the
public domain, and the date of the public announcement of the open offer
for shares of the target company made under these regulations;
(e) the volume-weighted average market price of the shares for a period of sixty
trading days immediately preceding the earlier of, the date on which the
primary acquisition is contracted, and the date on which the intention or the
decision to make the primary acquisition is announced in the public domain,
as traded on the stock exchange where the maximum volume of trading in
the shares of the target company are recorded during such period, provided
such shares are frequently traded; and
(f) the per share value computed under sub-regulation (5).
(4) In the event the offer price is incapable of being determined under any of the
parameters specified in sub-regulation (3), without prejudice to the requirements
of sub-regulation (5), the offer price shall be the fair price of shares of the target
company to be determined by the acquirer and the manager to the open offer
taking into account valuation parameters including, book value, comparable
trading multiples, and such other parameters as are customary for valuation of
shares of such companies.
(5) In the case of an indirect acquisition and open offers under sub-regulation (2) of
regulation 5 where,—
(a) the proportionate net asset value of the target company as a percentage of
the consolidated net asset value of the entity or business being acquired;
Page 18 of 71
(b) the proportionate sales turnover of the target company as a percentage of
the consolidated sales turnover of the entity or business being acquired; or
(c) the proportionate market capitalization of the target company as a
percentage of the enterprise value for the entity or business being acquired;
is in excess of fifteen per cent, on the basis of the most recent audited annual
financial statements, the acquirer shall, notwithstanding anything contained in
sub-regulation (2) or sub-regulation (3), be required to compute and disclose,
in the letter of offer, the per share value of the target company taken into
account for the acquisition, along with a detailed description of the
methodology adopted for such computation.
Explanation.— For the purposes of computing the percentages referred to in
clause (c) of this sub-regulation, the market capitalisation of the target
company shall be taken into account on the basis of the volume-weighted
average market price of such shares on the stock exchange for a period of sixty
trading days preceding the earlier of, the date on which the primary acquisition
is contracted, and the date on which the intention or the decision to make the
primary acquisition is announced in the public domain, as traded on the stock
exchange where the maximum volume of trading in the shares of the target
company are recorded during such period.
(6) For the purposes of sub-regulation (2) and sub-regulation (3), where the acquirer or
any person acting in concert with him has any outstanding convertible instruments
convertible into shares of the target company at a specific price, the price at which
such instruments are to be converted into shares, shall also be considered as a
parameter under sub-regulation (2) and sub-regulation (3).
(7) For the purposes of sub-regulation (2) and sub-regulation (3), the price paid for
shares of the target company shall include any price paid or agreed to be paid for
the shares or voting rights in, or control over the target company, in any form
whatsoever, whether stated in the agreement for acquisition of shares or in any
incidental, contemporaneous or collateral agreement, whether termed as control
premium or as non-compete fees or otherwise.
Page 19 of 71
(8) Where the acquirer has acquired or agreed to acquire whether by himself or through
or with persons acting in concert with him any shares or voting rights in the target
company during the offer period, whether by subscription or purchase, at a price
higher than the offer price, the offer price shall stand revised to the highest price
paid or payable for any such acquisition:
Provided that no such acquisition shall be made after the third working day
prior to the commencement of the tendering period and until the expiry of the
tendering period.
(9) The price parameters under sub-regulation (2) and sub-regulation (3) may be
adjusted by the acquirer in consultation with the manager to the offer, for corporate
actions such as issuances pursuant to rights issue, bonus issue, stock consolidations,
stock splits, payment of dividend, de-mergers and reduction of capital, where the
record date for effecting such corporate actions falls prior to three working days
before the commencement of the tendering period:
Provided that no adjustment shall be made for dividend declared with a
record date falling during such period except where the dividend per share is more
than fifty per cent higher than the average of the dividend per share paid during the
three financial years preceding the date of the public announcement.
(10) Where the acquirer or persons acting in concert with him acquires shares of the
target company during the period of twenty-six weeks after the tendering period at a
price higher than the offer price under these regulations, the acquirer and persons
acting in concert shall pay the difference between the highest acquisition price and
the offer price, to all the shareholders whose shares were accepted in the open offer,
within sixty days from the date of such acquisition:
Provided that this provision shall not be applicable to acquisitions under
another open offer under these regulations or pursuant to the Securities and
Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, or open
market purchases made in the ordinary course on the stock exchanges, not being
negotiated acquisition of shares of the target company whether by way of bulk
deals, block deals or in any other form.
Page 20 of 71
(11) Where the open offer is subject to a minimum level of acceptances, the acquirer
may, subject to the other provisions of this regulation, indicate a lower price,
which will not be less than the price determined under this regulation, for
acquiring all the acceptances despite the acceptance falling short of the indicated
minimum level of acceptance, in the event the open offer does not receive the
minimum acceptance.
(12) In the case of any indirect acquisition, other than the indirect acquisition referred
in sub-regulation (2) of regulation 5, the offer price shall stand enhanced by an
amount equal to a sum determined at the rate of ten per cent per annum for the
period between the earlier of the date on which the primary acquisition is
contracted or the date on which the intention or the decision to make the primary
acquisition is announced in the public domain, and the date of the detailed public
statement, provided such period is more than five working days.
(13) The offer price for partly paid up shares shall be computed as the difference
between the offer price and the amount due towards calls-in-arrears including calls
remaining unpaid with interest, if any, thereon.
(14) The offer price for equity shares carrying differential voting rights shall be
determined by the acquirer and the manager to the open offer with full disclosure
of justification for the price so determined, being set out in the detailed public
statement and the letter of offer:
Provided that such price shall not be lower than the amount determined by
applying the percentage rate of premium, if any, that the offer price for the equity
shares carrying full voting rights represents to the price parameter computed under
clause (d) of sub-regulation 2, or as the case may be, clause (e) of sub-regulation 3,
to the volume-weighted average market price of the shares carrying differential
voting rights for a period of sixty trading days computed on the same terms as
specified in the aforesaid provisions, subject to shares carrying full voting rights
and the shares carrying differential voting rights, both being frequently traded
shares.
(15) In the event of any of the price parameters contained in this regulation not being
available or denominated in Indian rupees, the conversion of such amount into
Page 21 of 71
Indian rupees shall be effected at the exchange rate as prevailing on the date
preceding the date of public announcement and the acquirer shall set out the
source of such exchange rate in the public announcement, the detailed public
statement and the letter of offer.
(16) For purposes of clause (e) of sub-regulation (2) and sub-regulation (4), the
Board may, at the expense of the acquirer, require valuation of the shares by an
independent merchant banker other than the manager to the open offer or an
independent chartered accountant in practice having a minimum experience of ten
years.
Mode of payment.
9. (1) The offer price may be paid, —
(a) in cash;
(b) by issue, exchange or transfer of listed shares in the equity share
capital of the acquirer or of any person acting in concert;
(c) by issue, exchange or transfer of listed secured debt instruments
issued by the acquirer or any person acting in concert with a rating
not inferior to investment grade as rated by a credit rating agency
registered with the Board;
(d) by issue, exchange or transfer of convertible debt securities entitling
the holder thereof to acquire listed shares in the equity share capital
of the acquirer or of any person acting in concert; or
(e) a combination of the mode of payment of consideration stated in
clause (a), clause (b), clause (c) and clause (d):
Provided that where any shares have been acquired or agreed
to be acquired by the acquirer and persons acting in concert with him
during the fifty-two weeks immediately preceding the date of public
announcement constitute more than ten per cent of the voting rights
in the target company and has been paid for in cash, the open offer
shall entail an option to the shareholders to require payment of the
offer price in cash, and a shareholder who has not exercised an
Page 22 of 71
option in his acceptance shall be deemed to have opted for receiving
the offer price in cash:
Provided further that in case of revision in offer price the
mode of payment of consideration may be altered subject to the
condition that the component of the offer price to be paid in cash
prior to such revision is not reduced.
(2) For the purposes of clause (b), clause (d) and clause (e) of sub-regulation (1),
the shares sought to be issued or exchanged or transferred or the shares to be
issued upon conversion of other securities, towards payment of the offer price,
shall conform to the following requirements, —
(a) such class of shares are listed on a stock exchange and frequently
traded at the time of the public announcement;
(b) such class of shares have been listed for a period of at least two years
preceding the date of the public announcement;
(c) the issuer of such class of shares has redressed at least ninety five per
cent. of the complaints received from investors by the end of the
calendar quarter immediately preceding the calendar month in which
the public announcement is made;
(d) the issuer of such class of shares has been in material compliance
22
with the [listing regulations] for a period of at least two years
immediately preceding the date of the public announcement:
Provided that in case where the Board is of the view that a
company has not been materially compliant with the provisions of
the 23[listing regulations], the offer price shall be paid in cash only;
(e) the impact of auditors’ qualifications, if any, on the audited accounts
of the issuer of such shares for three immediately preceding financial
years does not exceed five per cent. of the net profit or loss after tax
of such issuer for the respective years; and
22
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “listing agreement”.
23
Ibid
Page 23 of 71
(f) the Board has not issued any direction against the issuer of such
shares not to access the capital market or to issue fresh shares.
(3) Where the shareholders have been provided with options to accept payment in
cash or by way of securities, or a combination thereof, the pricing for the open
offer may be different for each option subject to compliance with minimum
offer price requirements under regulation 8:
Provided that the detailed public statement and the letter of offer
shall contain justification for such differential pricing.
(4) In the event the offer price consists of consideration to be paid by issuance of
securities, which requires compliance with any applicable law, the acquirer shall
ensure that such compliance is completed not later than the commencement of
the tendering period:
Provided that in case the requisite compliance is not made by such
date, the acquirer shall pay the entire consideration in cash.
(5) Where listed securities are offered as consideration, the value of such securities
shall be higher of:
(a) the average of the weekly high and low of the closing prices of such
securities quoted on the stock exchange during the six months preceding the
relevant date;
(b) the average of the weekly high and low of the closing prices of such
securities quoted on the stock exchange during the two weeks preceding the
relevant date; and
(c) the volume-weighted average market price for a period of sixty trading days
preceding the date of the public announcement, as traded on the stock
exchange where the maximum volume of trading in the shares of the
company whose securities are being offered as consideration, are recorded
during the six-month period prior to relevant date and the ratio of exchange
of shares shall be duly certified by an independent merchant banker (other
than the manager to the open offer) or an independent chartered accountant
having a minimum experience of ten years.
Page 24 of 71
Explanation.— For the purposes of this sub-regulation, the “relevant date”
shall be the thirtieth day prior to the date on which the meeting of
shareholders is held to consider the proposed issue of shares under sub-
section (1A) of Section 81 of the 24[Companies Act, 2013 (18 of 2013)].
General exemptions.
10. (1) The following acquisitions shall be exempt from the obligation to make an
open offer under regulation 3 and regulation 4 subject to fulfillment of the
conditions stipulated therefor,—
(a) acquisition pursuant to inter se transfer of shares amongst qualifying
persons, being,—
(i) immediate relatives;
(ii) persons named as promoters in the shareholding pattern filed by
the target company in terms of the 25[listing regulations or as the
case may be, the listing agreement] or these regulations for not less
than three years prior to the proposed acquisition;
(iii) a company, its subsidiaries, its holding company, other subsidiaries
of such holding company, persons holding not less than fifty per
cent of the equity shares of such company, other companies in
which such persons hold not less than fifty per cent of the equity
shares, and their subsidiaries subject to control over such
qualifying persons being exclusively held by the same persons;
26
[Explanation: For the purpose of this sub-clause, the company
shall include a body corporate, whether Indian or foreign.]
(iv) persons acting in concert for not less than three years prior to the
proposed acquisition, and disclosed as such pursuant to filings
24
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “Companies Act, 1956 (1 of 1956)”.
25
26
2018, w.e.f. 11-09-2018.
Page 25 of 71
under the 27[listing regulations or as the case may be, the listing
agreement];
(v) shareholders of a target company who have been persons acting in
concert for a period of not less than three years prior to the
proposed acquisition and are disclosed as such pursuant to filings
under the 28[listing regulations or as the case may be, the listing
agreement], and any company in which the entire equity share
capital is owned by such shareholders in the same proportion as
their holdings in the target company without any differential
entitlement to exercise voting rights in such company:
Provided that for purposes of availing of the exemption
under this clause,—
(i) If the shares of the target company are frequently traded,
the acquisition price per share shall not be higher by more
than twenty-five per cent of the volume-weighted average
market price for a period of sixty trading days preceding
the date of issuance of notice for the proposed inter se
transfer under sub-regulation (5), as traded on the stock
exchange where the maximum volume of trading in the
shares of the target company are recorded during such
period, and if the shares of the target company are
infrequently traded, the acquisition price shall not be
higher by more than twenty-five percent of the price
determined in terms of clause (e) of sub-regulation (2) of
regulation 8; and
(ii) the transferor and the transferee shall have complied with
applicable disclosure requirements set out in Chapter V.
(b) acquisition in the ordinary course of business by,—
27
28
Ibid
Page 26 of 71
(i) an underwriter registered with the Board by way of allotment
pursuant to an underwriting agreement in terms of the Securities and
Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009;
(ii) a stock broker registered with the Board on behalf of his client in
exercise of lien over the shares purchased on behalf of the client
under the bye-laws of the stock exchange where such stock broker is
a member;
(iii) a merchant banker registered with the Board or a nominated investor
in the process of market making or subscription to the unsubscribed
portion of issue in terms of Chapter XB of the Securities and
Exchange Board of India (Issue of Capital and Disclosure
(iv) any person acquiring shares pursuant to a scheme of safety net in
terms of regulation 44 of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009;
(v) a merchant banker registered with the Board acting as a stabilising
agent or by the promoter or pre-issue shareholder in terms of
regulation 45 of the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2009;
(vi) by a registered market-maker of a stock exchange in respect of
shares for which he is the market maker during the course of market
making;
(vii) a Scheduled Commercial Bank, acting as an escrow agent; and
(viii) invocation of pledge by Scheduled Commercial Banks or Public
Financial Institutions as a pledgee.
(c) acquisitions at subsequent stages, by an acquirer who has made a public

announcement of an open offer for acquiring shares pursuant to an agreement
of disinvestment, as contemplated in such agreement:
Provided that,—
Page 27 of 71
(i) both the acquirer and the seller are the same at all the stages of
acquisition; and
(ii) full disclosures of all the subsequent stages of acquisition, if any,
have been made in the public announcement of the open offer
and in the letter of offer.
(d) acquisition pursuant to a scheme,—
(i) made under section 18 of the Sick Industrial Companies (Special
Provisions) Act, 1985 (1 of 1986) or any statutory modification
or re-enactment thereto;
(ii) of arrangement involving the target company as a transferor
company or as a transferee company, or reconstruction of the
target company, including amalgamation, merger or demerger,
pursuant to an order of a court [or a tribunal]29 [***]30under any
law or regulation, Indian or foreign; or
(iii) of arrangement not directly involving the target company as a
transferor company or as a transferee company, or reconstruction
not involving the target company’s undertaking, including
amalgamation, merger or demerger, pursuant to an order of a
31
court [or a tribunal] or [***] 32 under any law or regulation,
Indian or foreign, subject to,—
(A) the component of cash and cash equivalents in the
consideration paid being less than twenty-five per cent of
the consideration paid under the scheme; and
(B) where after implementation of the scheme of
arrangement, persons directly or indirectly holding at
least thirty-three per cent of the voting rights in the
29
w.e.f 14.8.2017.
30
Words “or a competent authority” omitted by the SEBI (Substantial Acquisition of Shares and Takeovers)
(Amendment) Regulations, 2019, w.e.f 29.03.2019.
31
w.e.f 14.8.2017.
32
Words “or a competent authority” omitted by the SEBI (Substantial Acquisition of Shares and Takeovers)
(Amendment) Regulations, 2019, w.e.f 29.03.2019.
Page 28 of 71
combined entity are the same as the persons who held the
entire voting rights before the implementation of the
scheme.
33
[(da) acquisition pursuant to a resolution plan approved under section 31 of the
Insolvency and Bankruptcy Code, 2016 (31 of 2016);]
(e) acquisition pursuant to the provisions of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (54 of 2002);
(f) acquisition pursuant to the provisions of the Securities and Exchange
Board of India (Delisting of Equity Shares) Regulations, 2009;
(g) acquisition by way of transmission, succession or inheritance;
(h) acquisition of voting rights or preference shares carrying voting rights
34
arising out of the operation of [sub-section (2) of section 47 of the
Companies Act, 2013 (18 of 2013)].
35
[(i) Acquisition of shares by the lenders pursuant to conversion of their debt
as part of a debt restructuring [***]36 implemented in accordance with the
guidelines specified by the Reserve Bank of India:
[Provided that the conditions specified under sub-regulation (6) of
regulation 158 of the Securities and Exchange Board of India (Issue of
33
Inserted ibid.
34
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “sub-section (2) of section 87 of the Companies
Act, 1956 (1 of 1956)”.
35
Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations,
2017, w.e.f 14.8.2017. Prior to the substitution, clause (i), inserted by the SEBI (Substantial Acquisition of
Shares and Takeovers) (Second Amendment) Regulations, 2015, w.e.f. 05-05-2015, read as follows:
“Conversion of debt into equity under Strategic Debt Restructuring Scheme - Acquisition of equity
shares by the consortium of banks, financial institutions and other secured lenders pursuant to
conversion of their debt as part of the Strategic Debt Restructuring Scheme in accordance with the
guidelines specified by the Reserve Bank of India:
Provided that the conditions specified under sub-regulation (5) or (6) of regulation 70 of
the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009, as may be applicable, are complied with.”
36
The word “scheme” omitted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment)
Regulations, 2019, w.e.f 29.03.2019.
Page 29 of 71
Capital and Disclosure Requirements) Regulations, 2018 are complied
with]37]
[Explanation. – For the purpose of this clause, “lenders” shall mean all
scheduled commercial banks (excluding Regional Rural Banks) and All
India Financial Institutions]38
39
[(ia) [***]40]
37
Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations,
2019, w.e.f 29.03.2019. Prior to its substitution, the proviso read as follows,-
“Provided that the conditions specified under sub-regulation (5) of regulation 70 of the Securities
and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009
are complied with.”
38
w.e.f 29.03.2019.
39
Inserted ibid.
40
Omitted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2019,
w.e.f 29.03.2019. Prior to its omission, clause (ia) read as follows,-
“Acquisition of shares by the person(s), by way of allotment by the target company or purchase
from the lenders at the time of lenders selling their shareholding or enforcing change in ownership
in favour of such person(s), pursuant to a debt restructuring scheme implemented in accordance
with the guidelines specified by the Reserve Bank of India:
Provided that in respect of acquisition by persons by way of allotment by the target company, the
conditions specified under sub-regulation (6) of regulation 70 of the Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 are complied with:
Provided further that in respect of acquisition by way of purchase of shares from the lenders, the
acquisition shall be exempted subject to the compliance with the following conditions:
(a) the guidelines for determining the purchase price have been specified by the Reserve Bank
of India and that the purchase price has been determined in accordance with such
guidelines;
(b) the purchase price shall be certified by two independent qualified valuers, and for this
purpose ‘valuer’ shall be a person who is registered under section 247 of the Companies
Act, 2013 and the relevant Rules framed thereunder:
Provided that till such date on which section 247 of the Companies Act, 2013 and
the relevant Rules come into force, valuer shall mean an independent merchant banker
registered with the Board or an independent chartered accountant in practice having a
minimum experience of ten years;
(c) the specified securities so purchased shall be locked-in for a period of at least three years
from the date of purchase;
(d) the lock-in of equity shares acquired pursuant to conversion of convertible securities
purchased from the lenders shall be reduced to the extent the convertible securities have
already been locked-in;
(e) a special resolution has been passed by shareholders of the issuer before the purchase;
(f) the issuer shall, in addition to the disclosures required under the Companies Act, 2013 or
any other applicable law, disclose the following information pertaining to the proposed
acquirer(s) in the explanatory statement to the notice for the general meeting proposed for
passing special resolution as stipulated at clause (e) of this sub-regulation:
a. the identity including of the natural persons who are the ultimate beneficial owners of
the shares proposed to be purchased and/ or who ultimately control the proposed
acquirer(s);
b. the business model;
c. a statement on growth of business over the period of time;
Page 30 of 71
41
[(j) increase in voting rights arising out of the operation of sub-section (1) of
section 106 of the Companies Act, 2013 or pursuant to a forfeiture of
shares by the target company, undertaken in compliance with the
provisions of the Companies Act, 2013 and its articles of association.]
(2) [***]42
43
[(2A) An increase in the voting rights of any shareholder beyond the threshold limits
stipulated in sub-regulations (1) and (2) of regulation 3, without the acquisition of
control, pursuant to the conversion of equity shares with superior voting rights into
ordinary equity shares, shall be exempted from the obligation to make an open offer
under regulation 3.]
44
[(2B) Any acquisition of shares or voting rights or control of the target company by way
of preferential issue in compliance with regulation 164A of the Securities and
Regulations, 2018 shall be exempt from the obligation to make an open offer
under sub-regulation (1) of regulation 3 and regulation 4.
Explanation.- The above exemption from open offer shall also apply to the target
company with infrequently traded shares which is compliant with the provisions of
sub-regulations (2), (3), (4), (5),(6), (7) and (8) of regulation 164A of the Securities
and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018. The pricing of such infrequently traded shares shall be in terms
d. summary of audited financials of previous three financial years;

e. track record in turning around companies, if any;
f. the proposed roadmap for effecting turnaround of the issuer;
g. applicable provisions of the Companies Act, 2013 are complied with.”
41
Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Fourth Amendment) Regulations,
2015, w.e.f. 22-12-2015.
42
Omitted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2019,
w.e.f 29.03.2019. Prior to its omission, sub-regulation (2) read as follows,-
“The acquisition of shares of a target company, not involving a change of control over such target
company, pursuant to a scheme of corporate debt restructuring in terms of the Corporate Debt
Restructuring Scheme notified by the Reserve Bank of India vide circular no. B.P.BC 15/21.04,
114/2001 dated August 23, 2001, or any modification or re-notification thereto provided such
scheme has been authorised by shareholders by way of a special resolution passed by postal
ballot, shall be exempted from the obligation to make an open offer under regulation 3”
43
Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations,
2019, w.e.f. 29-07-2019.
44
Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations,
2020, w.e.f. 22-06-2020.
Page 31 of 71
of regulation 165 of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2018.]
(3) An increase in voting rights in a target company of any shareholder beyond the limit
attracting an obligation to make an open offer under sub-regulation (1) of regulation
3, pursuant to buy-back of shares 45[by the target company] shall be exempt from the
obligation to make an open offer provided such shareholder reduces his shareholding
such that his voting rights fall to below the threshold referred to in sub-regulation (1)
of regulation 3 within ninety days from the date 46[of the closure of the said buy-back
offer].
(4) The following acquisitions shall be exempt from the obligation to make an open offer
under sub-regulation (2) of regulation 3,—
(a) acquisition of shares by any shareholder of a target company, upto his
entitlement, pursuant to a rights issue;
(b) acquisition of shares by any shareholder of a target company, beyond his
entitlement, pursuant to a rights issue, subject to fulfillment of the following
conditions,—
(i) the acquirer has not renounced any of his entitlements in such rights issue;
and
(ii) the price at which the rights issue is made is not higher than the ex-rights
price of the shares of the target company, being the sum of,—
(A) the volume weighted average market price of the shares of the target
company during a period of sixty trading days ending on the day
prior to the date of determination of the rights issue price, multiplied
by the number of shares outstanding prior to the rights issue, divided
by the total number of shares outstanding after allotment under the
rights issue:
Provided that such volume weighted average market price
shall be determined on the basis of trading on the stock exchange
45
Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2013,
w.e.f. 26-03-2013.
46
Substituted for “on which the voting rights so increase” by the SEBI(Substantial Acquisition of Shares and
Takeovers) (Amendment) Regulations, 2013, w.e.f. 26-03-2013.
Page 32 of 71
where the maximum volume of trading in the shares of such target
company is recorded during such period; and
(B) the price at which the shares are offered in the rights issue,
multiplied by the number of shares so offered in the rights issue
divided by the total number of shares outstanding after allotment
under the rights issue:
(c) increase in voting rights in a target company of any shareholder pursuant to

buy-back of shares:
Provided that,—
(i) such shareholder has not voted in favour of the resolution
authorising the buy-back of securities under 47[section 68 of the
Companies Act, 2013 (18 of 2013)];
(ii) in the case of a shareholder resolution, voting is by way of
postal ballot;
(iii) where a resolution of shareholders is not required for the buy-
back, such shareholder, in his capacity as a director, or any
other interested director has not voted in favour of the resolution
of the board of directors of the target company authorising the
48
buy-back of securities under [section 68 of the Companies
Act, 2013 (18 of 2013)]; and
(iv) the increase in voting rights does not result in an acquisition of
control by such shareholder over the target company:
Provided further that where the aforesaid conditions are not
met, in the event such shareholder reduces his shareholding such that
his voting rights fall below the level at which the obligation to make
47
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “section 77A of the Companies Act, 1956 (1 of
1956).”
48
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “section 77A of the Companies Act, 1956 (1 of
1956).”
Page 33 of 71
an open offer would be attracted under sub-regulation (2) of
regulation 3, within ninety days from the date 49[of closure of the
buy-back offer by the target company], the shareholder shall be
exempt from the obligation to make an open offer;
(d) acquisition of shares in a target company by any person in exchange for shares
of another target company tendered pursuant to an open offer for acquiring
shares under these regulations;
(e) acquisition of shares in a target company from state-level financial institutions
or their subsidiaries or companies promoted by them, by promoters of the
target company pursuant to an agreement between such transferors and such
promoter;
50
(f) acquisition of shares in a target company from a venture capital fund [or
category I Alternative Investment Fund] or a foreign venture capital investor
registered with the Board, by promoters of the target company pursuant to an
51
agreement between such venture capital fund [or category I Alternative
Investment Fund] or foreign venture capital investor and such promoters.
(5) In respect of acquisitions under clause (a) of sub-regulation (1), and clauses (e) and (f)
of sub-regulation (4), the acquirer shall intimate the stock exchanges where the shares
of the target company are listed, the details of the proposed acquisition in such form
as may be specified, at least four working days prior to the proposed acquisition, and
the stock exchange shall forthwith disseminate such information to the public.
(6) In respect of any acquisition made pursuant to exemption provided for in this
regulation, the acquirer shall file a report with the stock exchanges where the shares
of the target company are listed, in such form as may be specified not later than four
working days from the acquisition, and the stock exchange shall forthwith
disseminate such information to the public.
(7) In respect of any acquisition of or increase in voting rights pursuant to exemption
provided for in clause (a) of sub-regulation (1), sub-clause (iii) of clause (d) of sub-
49
Substituted for “on which the voting rights so increase” by the SEBI(Substantial Acquisition of Shares and
Takeovers) (Amendment) Regulations, 2013, w.e.f. 26-03-2013.
50
Inserted by the SEBI (Alternative Investment Funds) Regulations, 2012, w.e.f 21-05-2012.
51
Ibid.
Page 34 of 71
regulation (1), clause (h) of sub-regulation (1), sub-regulation (2), sub-regulation (3)
and clause (c) of sub-regulation (4), clauses (a), (b) and (f) of sub-regulation (4), the
acquirer shall, within twenty-one working days of the date of acquisition, submit a
report in such form as may be specified along with supporting documents to the
Board giving all details in respect of acquisitions, along with a non-refundable fee of
52 53
rupees [one lakh fifty thousand] [by way of direct credit in the bank account
through NEFT/RTGS/IMPS or any other mode allowed by RBI or] by way of a
banker’s cheque or demand draft payable in Mumbai in favour of the Board.
Explanation.— For the purposes of sub-regulation (5), sub-regulation (6) and sub-
regulation (7) in the case of convertible securities, the date of the acquisition shall be
the date of conversion of such securities.
Exemptions by the Board.
11.(1) The Board may for reasons recorded in writing, grant exemption from the
obligation to make an open offer for acquiring shares under these regulations
subject to such conditions as the Board deems fit to impose in the interests of
investors in securities and the securities market.
(2) The Board may for reasons recorded in writing, grant a relaxation from strict
compliance with any procedural requirement under Chapter III and Chapter IV
subject to such conditions as the Board deems fit to impose in the interests of
investors in securities and the securities market on being satisfied that,—
(a) the target company is a company in respect of which the Central
Government or State Government or any other regulatory authority has
superseded the board of directors of the target company and has appointed
new directors under any law for the time being in force, if,—
(i) such board of directors has formulated a plan which provides for
transparent, open, and competitive process for acquisition of shares or
voting rights in, or control over the target company to secure the
smooth and continued operation of the target company in the interests
52
Substituted by the SEBI (Payment of fees) (Amendment) Regulations, 2014 w.e.f. 23-05-2014, for the
words “twenty five thousand”
53
Inserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017,
w.e.f. 6-3-2017.
Page 35 of 71
of all stakeholders of the target company and such plan does not further
the interests of any particular acquirer;
(ii) the conditions and requirements of the competitive process are
reasonable and fair;
(iii) the process adopted by the board of directors of the target company
provides for details including the time when the open offer for
acquiring shares would be made, completed and the manner in which
the change in control would be effected; and
(b) the provisions of Chapter III and Chapter IV are likely to act as impediment
to implementation of the plan of the target company and exemption from
strict compliance with one or more of such provisions is in public interest,
the interests of investors in securities and the securities market.
(3) For seeking exemption under sub-regulation (1), the acquirer shall, and for
seeking relaxation under sub-regulation (2) the target company shall file an
application with the Board, supported by a duly sworn affidavit, giving details
of the proposed acquisition and the grounds on which the exemption has been
sought.
(4) The acquirer or the target company, as the case may be, shall along with the
application referred to under sub-regulation (3) pay a non-refundable fee of
54 55
rupees [five lakh], [by way of direct credit in the bank account through
NEFT/RTGS/IMPS or any other mode allowed by RBI or] by way of a banker’s
cheque or demand draft payable in Mumbai in favour of the Board.
(5) The Board may after affording reasonable opportunity of being heard to the
applicant and after considering all the relevant facts and circumstances, pass a
reasoned order either granting or rejecting the exemption or relaxation sought as
expeditiously as possible:
Provided that the Board may constitute a panel of experts to which an
application for an exemption under sub-regulation (1) may, if considered
54
Substituted for the words “three lakh” by the SEBI (Payment of Fees and Mode of Payment) (Amendment)
Regulations, 2017, w.e.f. 6-3-2017. Prior to that, the SEBI (Payment of fees) (Amendment) Regulations,
2014 w.e.f. 23-05-2014 had substituted the words “fifty thousand” by the words “three lakh”.
55
Ibid.
Page 36 of 71
necessary, be referred to make recommendations on the application to the
Board.
(6) The order passed under sub-regulation (5) shall be hosted by the Board on its
official website.
CHAPTER – III
OPEN OFFER PROCESS
Manager to the open offer.
12. (1) Prior to making a public announcement, the acquirer shall appoint a merchant
banker registered with the Board, who is not an associate of the acquirer, as the
manager to the open offer.
Explanation.— For the purposes of this regulation the term “associate” has the
same meaning as in the Securities and Exchange Board of India (Merchant
Bankers) Regulations, 1992.
(2) The public announcement of the open offer for acquiring shares required under
these regulations shall be made by the acquirer through such manager to the
open offer.
Timing.
13. (1) The public announcement referred to in regulation 3 and regulation 4 shall be
made in accordance with regulation 14 and regulation 15, on the date of
agreeing to acquire shares or voting rights in, or control over the target
company.
(2) Such public announcement,—
(a) in the case of market purchases, shall be made prior to placement of
the purchase order with the stock broker to acquire the shares, that
would take the entitlement to voting rights beyond the stipulated
thresholds;
(b) pursuant to an acquirer acquiring shares or voting rights in, or control
over the target company upon converting convertible securities
without a fixed date of conversion or upon conversion of depository
Page 37 of 71
receipts for the underlying shares of the target company shall be made
on the same day as the date of exercise of the option to convert such
securities into shares of the target company;
(c) pursuant to an acquirer acquiring shares or voting rights in, or control
over the target company upon conversion of convertible securities
with a fixed date of conversion shall be made on the second working
day preceding the scheduled date of conversion of such securities into
shares of the target company;
(d) pursuant to a disinvestment shall be made on the same day as the date
of executing the agreement for acquisition of shares or voting rights
in or control over the target company;
(e) in the case of indirect acquisition of shares or voting rights in, or
control over the target company where none of the parameters
referred to in sub-regulation (2) of regulation 5 are met, may be made
at any time within four working days from the earlier of, the date on
which the primary acquisition is contracted, and the date on which the
intention or the decision to make the primary acquisition is
announced in the public domain;
(f) in the case of indirect acquisition of shares or voting rights in, or
control over the target company where any of the parameters referred
to in sub-regulation (2) of regulation 5 are met shall be made on the
earlier of, the date on which the primary acquisition is contracted, and
the date on which the intention or the decision to make the primary
acquisition is announced in the public domain;
(g) pursuant to an acquirer acquiring shares or voting rights in, or control
over the target company, under preferential issue, shall be made on
56
the date on which [the board of directors of the target company
authorises such preferential issue.];
56
Substituted for “special resolution is passed for allotment of shares under sub-section (1A) of section 81 of
the Companies Act, 1956” by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment)
Regulations, 2013, w.e.f. 26-03-2013.
Page 38 of 71
(h) the public announcement pursuant to an increase in voting rights
consequential to a buy-back not qualifying for exemption under
regulation 10, shall be made not later than the ninetieth day from the
date of 57[closure of the buy-back offer by the target company].;
(i) the public announcement pursuant to any acquisition of shares or
voting rights in or control over the target company where the specific
date on which title to such shares, voting rights or control is acquired
is beyond the control of the acquirer, shall be made not later than two
working days from the date of receipt of intimation of having
acquired such title.
58
[(2A) Notwithstanding anything contained in sub-regulation (2), a public
announcement referred to in regulation 3 and regulation 4 for a proposed acquisition
of shares or voting rights in or control over the target company through a combination
of,-
(i) an agreement and any one or more modes of acquisition referred to in sub-
regulation (2) of regulation 13, or
(ii) any one or more modes of acquisition referred in clause (a) to (i) of sub-
regulation (2) of regulation 13,
shall be made on the date of first such acquisition, provided the acquirer discloses in
the public announcement the details of the proposed subsequent acquisition.]
(3) The public announcement made under regulation 6 shall be made on the same
day as the date on which the acquirer takes the decision to voluntarily make a
public announcement of an open offer for acquiring shares of the target
company.
(4) Pursuant to the public announcement made under sub-regulation (1) and sub-
regulation (3), a detailed public statement shall be published by the acquirer
through the manager to the open offer in accordance with regulation 14 and
regulation 15, not later than five working days of the public announcement:
57
Substituted for “such increase in the voting rights beyond the relevant threshold stipulated in regulation 3”
by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2013, w.e.f. 26-03-
2013.
58
w.e.f. 26-03-2013.
Page 39 of 71
Provided that the detailed public statement pursuant to a public
announcement made under clause (e) of sub-regulation (2) shall be made not
later than five working days of the completion of the primary acquisition of
shares or voting rights in, or control over the company or entity holding shares
or voting rights in, or control over the target company.
Explanation.— It is clarified that in the event the acquirer does not succeed in
acquiring the ability to exercise or direct the exercise of voting rights in, or
control over the target company, the acquirer shall not be required to make a
detailed public statement of an open offer for acquiring shares under these
regulations.
Publication.
14. (1) The public announcement shall be sent to all the stock exchanges on which the
shares of the target company are listed, and the stock exchanges shall forthwith
disseminate such information to the public.
(2) A copy of the public announcement shall be sent to the Board and to the target
company at its registered office within one working day of the date of the public
announcement.
(3) The detailed public statement pursuant to the public announcement referred to in
sub-regulation (4) of regulation 13 shall be published in all editions of any one
English national daily with wide circulation, any one Hindi national daily with
wide circulation, and any one regional language daily with wide circulation at the
place where the registered office of the target company is situated and one
regional language daily at the place of the stock exchange where the maximum
volume of trading in the shares of the target company are recorded during the
sixty trading days preceding the date of the public announcement.
(4) Simultaneously with publication of such detailed public statement in the
newspapers, a copy of the same shall be sent to,—
(i) the Board through the manager to the open offer,
(ii) all the stock exchanges on which the shares of the target company
are listed, and the stock exchanges shall forthwith disseminate such
information to the public,
Page 40 of 71
(iii) the target company at its registered office, and the target company
shall forthwith circulate it to the members of its board.
Contents.
15. (1) The public announcement shall contain such information as may be specified,
including the following,—
(a) name and identity of the acquirer and persons acting in concert with him;
(b) name and identity of the sellers, if any;
(c) nature of the proposed acquisition such as purchase of shares or allotment of
shares, or any other means of acquisition of shares or voting rights in, or control
over the target company;
(d) the consideration for the proposed acquisition that attracted the obligation to
make an open offer for acquiring shares, and the price per share, if any;
(e) the offer price, and mode of payment of consideration; and
(f) offer size, and conditions as to minimum level of acceptances, if any.
(2) The detailed public statement pursuant to the public announcement shall contain
such information as may be specified in order to enable shareholders to make
an informed decision with reference to the open offer.
(3) The public announcement of the open offer, the detailed public statement, and
any other statement, advertisement, circular, brochure, publicity material or
letter of offer issued in relation to the acquisition of shares under these
regulations shall not omit any relevant information, or contain any misleading
information.
Filing of letter of offer with the Board.
16. (1) Within five working days from the date of the detailed public statement made
under sub-regulation (4) of regulation 13, the acquirer shall, through the
manager to the open offer, file with the Board, a draft of the letter of offer
containing such information as may be specified along with a non-refundable
fee, as per the following scale, 59[by way of direct credit in the bank account
59
Inserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017,
w.e.f. 6-3-2017.
Page 41 of 71
through NEFT/RTGS/IMPS or any other mode allowed by RBI or] by way of a
banker’s cheque or demand draft payable in Mumbai in favour of the Board,—
60
[
Sl. Consideration payable Fee (Rs.)
No. under the Open Offer
a. Upto ten crore rupees. Five lakh rupees (Rs. 5,00,000)
b. More than ten crore rupees, 0.5 per cent of the offer size
but less than or equal to one
thousand crore rupees.
c. More than one thousand crore Five crore rupees (Rs. 5,00,00,000)
rupees. plus 0.125 per cent of the portion of
the offer size in excess of one
thousand crore rupees
(1000,00,00,000).
]
60
Substituted by the SEBI (Payment of fees) (Amendment) Regulations, 2014 w.e.f. 23-05-2014. Prior to its
substitution, the table in sub-regulation (1), read as under,
“
Sl. Consideration payable under the Fee (Rs.)
No. Open Offer
a. Upto ten crore rupees. One lakh twenty five thousands rupees (
1,25,000)
b. More than ten crore rupees, but less One lakh twenty five thousands rupees (
than or equal to one thousand crore 1,25,000) plus 0.025 per cent of the portion
rupees. of the offer size in excess of ten crore
rupees ( 10,00,00,000).
c. More than one thousand crore One crore twenty five lakh rupees (
rupees, but less than or equal to five 1,25,00,000) plus 0.03125 per cent of the
thousand crore rupees. portion of the offer size in excess of one
thousand crore rupees ( 1000,00,00,000).
d. More than five thousand crore Two crore fifty lakh rupees ( 2,50,00,000)
rupees. plus 0.01 per cent of the portion of the offer
size in excess of five thousand crore rupees
( 5000,00,00,000), subject to a maximum
of three crore rupees ( 3,00,00,000).
“.
Page 42 of 71
(2) The consideration payable under the open offer shall be calculated at the offer price,
assuming full acceptance of the open offer, and in the event the open offer is subject
to differential pricing, shall be computed at the highest offer price, irrespective of
manner of payment of the consideration:
Provided that in the event of consideration payable under the open offer being
enhanced owing to a revision to the offer price or offer size the fees payable shall
stand revised accordingly, and shall be paid within five working days from the date
of such revision.
(3) The manager to the open offer shall provide soft copies of the public announcement,
the detailed public statement and the draft letter of offer in accordance with such
specifications as may be specified, and the Board shall upload the same on its
website.
(4) The Board shall give its comments on the draft letter of offer as expeditiously as
possible but not later than fifteen working days of the receipt of the draft letter of
offer and in the event of no comments being issued by the Board within such period,
it shall be deemed that the Board does not have comments to offer:
Provided that in the event the Board has sought clarifications or additional
information from the manager to the open offer, the period for issuance of comments
shall be extended to the fifth working day from the date of receipt of satisfactory
reply to the clarification or additional information sought.
Provided further that in the event the Board specifies any changes, the
manager to the open offer and the acquirer shall carry out such changes in the letter
of offer before it is dispatched to the shareholders.
(5) In the case of competing offers, the Board shall provide its comments on the draft
letter of offer in respect of each competing offer on the same day.
(6) In the event the disclosures in the draft letter of offer are inadequate the Board may
call for a revised letter of offer and shall deal with the revised letter of offer in
accordance with sub-regulation (4).
Page 43 of 71
Provision of escrow.
17. (1) Not later than two working days prior to the date of the detailed public
statement of the open offer for acquiring shares, the acquirer shall create an escrow
account towards security for performance of his obligations under these regulations,
and deposit in escrow account such aggregate amount as per the following scale:
Sl. Consideration payable under Escrow Amount
No. the Open Offer
a. On the first five hundred crore an amount equal to twenty-five per cent of
rupees the consideration
b. On the balance consideration an additional amount equal to ten per cent
of the balance consideration
Provided that where an open offer is made conditional upon minimum level of
acceptance, hundred percent of the consideration payable in respect of minimum level
of acceptance or fifty per cent of the consideration payable under the open offer,
whichever is higher, shall be deposited in cash in the escrow account.
61
[Provided further that in case of indirect acquisitions where public
announcement has been made in terms of clause (e) of sub-regulation (2) of
regulation 13 of these regulations, an amount equivalent to hundred per cent of the
consideration payable in the open offer shall be deposited in the escrow account.]
(2) The consideration payable under the open offer shall be computed as provided for in
sub-regulation (2) of regulation 16 and in the event of an upward revision of the offer
price or of the offer size, the value of the escrow amount shall be computed on the
revised consideration calculated at such revised offer price, and the additional amount
shall be brought into the escrow account prior to effecting such revision.
(3) The escrow account referred to in sub-regulation (1) may be in the form of,—
(a) cash deposited with any scheduled commercial bank;
(b) bank guarantee issued in favour of the manager to the open offer by any
scheduled commercial bank; or
61
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations,
2020, w.e.f. 01-07-2020.
Page 44 of 71
(c) deposit of frequently traded and freely transferable equity shares or other freely
transferable securities with appropriate margin:
Provided that securities sought to be provided towards escrow
account under clause (c) shall be required to conform to the requirements set out
in sub-regulation (2) of regulation 9.
62
[Provided further that the deposit of securities shall not be
permitted in respect of indirect acquisitions where public announcement has
been made in terms of clause (e) of sub-regulation (2) of regulation 13 of
these regulations]
63 [Explanation: The cash component of the escrow account as referred to in
clause (a) above may be maintained in an interest bearing account, subject to the
merchant banker ensuring that the funds are available at the time of making
payment to the shareholders.]
(4) In the event of the escrow account being created by way of a bank guarantee or by
deposit of securities, the acquirer shall also ensure that at least one per cent of the
total consideration payable is deposited in cash with a scheduled commercial bank as
a part of the escrow account.
(5) For such part of the escrow account as is in the form of a cash deposit with a
scheduled commercial bank, the acquirer shall while opening the account, empower
the manager to the open offer to instruct the bank to issue a banker’s cheque or
demand draft or to make payment of the amounts lying to the credit of the escrow
account, in accordance with requirements under these regulations.
(6) For such part of the escrow account as is in the form of a bank guarantee, such bank
guarantee shall be in favour of the manager to the open offer and shall be kept valid
throughout the offer period and for an additional period of thirty days after
completion of payment of consideration to shareholders who have tendered their
shares in acceptance of the open offer.
62
2020, w.e.f. 01-07-2020.
63
2018, w.e.f. 11-09-2018.
Page 45 of 71
(7) For such part of the escrow account as is in the form of securities, the acquirer shall
empower the manager to the open offer to realise the value of such escrow account by
sale or otherwise, and in the event there is any shortfall in the amount required to be
maintained in the escrow account, the manager to the open offer shall be liable to
make good such shortfall.
(8) The manager to the open offer shall not release the escrow account until the expiry of
thirty days from the completion of payment of consideration to shareholders who
have tendered their shares in acceptance of the open offer, save and except for
transfer of funds to the special escrow account as required under regulation 21.
(9) In the event of non-fulfillment of obligations under these regulations by the acquirer
the Board may direct the manager to the open offer to forfeit the escrow account or
any amounts lying in the special escrow account, either in full or in part.
(10) The escrow account deposited with the bank in cash shall be released only in the
following manner,—
(a) the entire amount to the acquirer upon withdrawal of offer in terms of regulation
23 as certified by the manager to the open offer:
Provided that in the event the withdrawal is pursuant to clause (c) of
sub-regulation (1) of regulation 23, the manager to the open offer shall release
the escrow account upon receipt of confirmation of such release from the Board;
(b) for transfer of an amount not exceeding ninety per cent of the escrow account,
to the special escrow account in accordance with regulation 21;
(c) to the acquirer, the balance of the escrow account after transfer of cash to the
special escrow account, on the expiry of thirty days from the completion of
payment of consideration to shareholders who have tendered their shares in
acceptance of the open offer, as certified by the manager to the open offer;
(d) the entire amount to the acquirer upon the expiry of thirty days from the
completion of payment of consideration to shareholders who have tendered their
shares in acceptance of the open offer, upon certification by the manager to the
open offer, where the open offer is for exchange of shares or other secured
instruments;
Page 46 of 71
(e) the entire amount to the manager to the open offer, in the event of forfeiture for
non-fulfillment of any of the obligations under these regulations, for distribution
in the following manner, after deduction of expenses, if any, of registered
market intermediaries associated with the open offer,—
(i) one third of the escrow account to the target company;
(ii) one third of the escrow account to the Investor Protection and
Education Fund established under the Securities and Exchange
Board of India (Investor Protection and Education Fund)
Regulations, 2009; and
(iii) one third of the escrow account to be distributed pro-rata among the
shareholders who have accepted the open offer.
Other procedures.
18. (1) Simultaneously with the filing of the draft letter of offer with the Board under
sub-regulation (1) of regulation 16, the acquirer shall send a copy of the draft
letter of offer to the target company at its registered office address and to all
stock exchanges where the shares of the target company are listed.
(2) The letter of offer shall be dispatched to the shareholders whose names appear
on the register of members of the target company as of the identified date, not
later than seven working days from the receipt of comments from the Board or
where no comments are offered by the Board, within seven working days from
the expiry of the period stipulated in sub-regulation (4) of regulation 16:
64
[Explanation: (i) Letter of offer may also be dispatched through electronic
mode in accordance with the provisions of Companies Act, 2013.
(ii) On receipt of a request from any shareholder to receive a copy of the letter
of offer in physical format, the same shall be provided.
(iii) The aforesaid shall be disclosed in the letter of offer.]
Provided that where local laws or regulations of any jurisdiction
outside India may expose the acquirer or the target company to material risk of
64
2018, w.e.f. 11-09-2018.
Page 47 of 71
civil, regulatory or criminal liabilities in the event the letter of offer in its final
form were to be sent without material amendments or modifications into such
jurisdiction, and the shareholders resident in such jurisdiction hold shares
entitling them to less than five per cent of the voting rights of the target
company, the acquirer may refrain from dispatch of the letter of offer into such
jurisdiction:
Provided further that every person holding shares, regardless of
whether he held shares on the identified date or has not received the letter of
offer, shall be entitled to tender such shares in acceptance of the open offer.
(3) Simultaneously with the dispatch of the letter of offer in terms of sub-regulation
(2), the acquirer shall send the letter of offer to the custodian of shares
underlying depository receipts, if any, of the target company.
(4) Irrespective of whether a competing offer has been made, an acquirer may make
upward revisions to the offer price, and subject to the other provisions of these
regulations, to the number of shares sought to be acquired under the open offer,
at any time prior to the commencement of the last 65[one working day] before
the commencement of the tendering period.
(5) In the event of any revision of the open offer, whether by way of an upward
revision in offer price, or of the offer size, the acquirer shall,—
(a) make corresponding increases to the amount kept in escrow account under
regulation 17 prior to such revision;
(b) make an announcement in respect of such revisions in all the newspapers in
which the detailed public statement pursuant to the public announcement was
made; and
(c) simultaneously with the issue of such an announcement, inform the Board,
all the stock exchanges on which the shares of the target company are listed,
and the target company at its registered office.
(6) The acquirer shall disclose during the offer period every acquisition made by
the acquirer or persons acting in concert with him of any shares of the target
65
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “three working days”.
Page 48 of 71
company in such form as may be specified, to each of the stock exchanges on
which the shares of the target company are listed and to the target company at
its registered office within twenty-four hours of such acquisition, and the stock
exchanges shall forthwith disseminate such information to the public:
Provided that the acquirer and persons acting in concert with him
shall not acquire or sell any shares of the target company during the period
between three working days prior to the commencement of the tendering period
and until the expiry of the tendering period.
66
[(6A) The acquirer shall facilitate tendering of shares by the shareholders and
settlement of the same, through the stock exchange mechanism as specified by
the Board.]
(7) The acquirer shall issue an advertisement in such form as may be specified, one
working day before the commencement of the tendering period, announcing the
schedule of activities for the open offer, the status of statutory and other
approvals, if any, whether for the acquisition attracting the obligation to make
an open offer under these regulations or for the open offer, unfulfilled
conditions, if any, and their status, the procedure for tendering acceptances and
such other material detail as may be specified:
Provided that such advertisement shall be,—
(a) published in all the newspapers in which the detailed public statement
pursuant to the public announcement was made; and
(b) simultaneously sent to the Board, all the stock exchanges on which the
shares of the target company are listed, and the target company at its
registered office.
(8) The tendering period shall start not later than twelve working days from date of
receipt of comments from the Board under sub-regulation (4) of regulation 16
and shall remain open for ten working days.
(9) Shareholders who have tendered shares in acceptance of the open offer shall not
be entitled to withdraw such acceptance during the tendering period.
66
w.e.f. 24-03-2015.
Page 49 of 71
(10) The acquirer shall, within ten working days from the last date of the tendering
period, complete all requirements under these regulations and other applicable
law relating to the open offer including payment of consideration to the
shareholders who have accepted the open offer.
(11) The acquirer shall be responsible to pursue all statutory approvals required by
the acquirer in order to complete the open offer without any default, neglect or
delay:
Provided that where the acquirer is unable to make the payment to
the shareholders who have accepted the open offer within such period owing to
non-receipt of statutory approvals required by the acquirer, the Board may,
where it is satisfied that such non-receipt was not attributable to any willful
default, failure or neglect on the part of the acquirer to diligently pursue such
approvals, grant extension of time for making payments, subject to the acquirer
agreeing to pay interest to the shareholders for the delay at such rate as may be
specified:
Provided further that where the statutory approval extends to some
but not all shareholders, the acquirer shall have the option to make payment to
such shareholders in respect of whom no statutory approvals are required in
order to complete the open offer.
67
[(11A) Without prejudice to sub-regulation 11, in case the acquirer is unable to make
payment to the shareholders who have accepted the open offer within such
period, the acquirer shall pay interest for the period of delay to all such
shareholders whose shares have been accepted in the open offer, at the rate of
ten per cent per annum:
Provided that in case the delay was not attributable to any act
of omission or commission of the acquirer, or due to the reasons or
circumstances beyond the control of acquirer, the Board may grant waiver
from the payment of interest.
67
2020, w.e.f. 01-07-2020.
Page 50 of 71
Provided further that the payment of interest would be without
prejudice to the Board taking any action under regulation 32 of these regulation
or under the Act.]
(12) (a) The acquirer shall issue a post offer advertisement in such form as may be
specified within five working days after the offer period, giving details
including aggregate number of shares tendered, accepted, date of payment of
consideration.
(b) Such advertisement shall be,—
(i) published in all the newspapers in which the detailed public
statement pursuant to the public announcement was made; and
(ii) simultaneously sent to the Board, all the stock exchanges on which
the shares of the target company are listed, and the target company
at its registered office.
Conditional offer.
19. (1) An acquirer may make an open offer conditional as to the minimum level of
acceptance:
Provided that where the open offer is pursuant to an agreement,
such agreement shall contain a condition to the effect that in the event the
desired level of acceptance of the open offer is not received the acquirer shall
not acquire any shares under the open offer and the agreement attracting the
obligation to make the open offer shall stand rescinded.
(2) Where an open offer is made conditional upon minimum level of acceptances,
the acquirer and persons acting in concert with him shall not acquire, during the
offer period, any shares in the target company except under the open offer and
any underlying agreement for the sale of shares of the target company pursuant
to which the open offer is made.
Competing offers.
20. (1) Upon a public announcement of an open offer for acquiring shares of a target
company being made, any person, other than the acquirer who has made such
public announcement, shall be entitled to make a public announcement of an
Page 51 of 71
open offer within fifteen working days of the date of the detailed public
statement made by the acquirer who has made the first public announcement.
(2) The open offer made under sub-regulation (1) shall be for such number of
shares which, when taken together with shares held by such acquirer along with
persons acting in concert with him, shall be at least equal to the holding of the
acquirer who has made the first public announcement, including the number of
shares proposed to be acquired by him under the offer and any underlying
agreement for the sale of shares of the target company pursuant to which the
open offer is made.
(3) Notwithstanding anything contained in these regulations, an open offer made
within the period referred to in sub-regulation (1) shall not be regarded as a
voluntary open offer under regulation 6, and the provisions of these regulations
shall apply accordingly.
(4) Every open offer made under sub-regulation (1) and the open offer first made
shall be regarded as competing offers for purposes of these regulations.
(5) No person shall be entitled to make a public announcement of an open offer for
acquiring shares, or enter into any transaction that would attract the obligation
to make a public announcement of an open offer for acquiring shares under
these regulations, after the period of fifteen working days referred to in sub-
regulation (1) and until the expiry of the offer period for such open offer.
(6) Unless the open offer first made is an open offer conditional as to the minimum
level of acceptances, no acquirer making a competing offer may be made
conditional as to the minimum level of acceptances.
(7) No person shall be entitled to make a public announcement of an open offer for
acquiring shares, or enter into any transaction that would attract the obligation
to make a public announcement of an open offer under these regulations until
the expiry of the offer period where,—
(a) the open offer is for acquisition of shares pursuant to disinvestment, in
terms of clause (d) of sub-regulation (2) of regulation 13; or
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(b) the open offer is pursuant to a relaxation from strict compliance with the
provisions of Chapter III or Chapter IV granted by the Board under sub-
regulation (2) of regulation 11.
(8) The schedule of activities and the tendering period for all competing offers shall
be carried out with identical timelines and the last date for tendering shares in
acceptance of the every competing offer shall stand revised to the last date for
tendering shares in acceptance of the competing offer last made.
(9) Upon the public announcement of a competing offer, an acquirer who had made
a preceding competing offer shall be entitled to revise the terms of his open
offer provided the revised terms are more favourable to the shareholders of the
target company:
Provided that the acquirers making the competing offers shall be
entitled to make upward revisions of the offer price at any time up to 68[one
working day] prior to the commencement of the tendering period.
(10) Except for variations made under this regulation, all the provisions of these
regulations shall apply to every competing offer.
Payment of consideration.
21.(1) For the amount of consideration payable in cash, the acquirer shall open a special
escrow account with a banker to an issue registered with the Board and deposit
therein, such sum as would, together with cash transferred under clause (b) of
sub-regulation (10) of regulation 17, make up the entire sum due and payable to
the shareholders as consideration payable under the open offer, and empower the
manager to the offer to operate the special escrow account on behalf of the
acquirer for the purposes under these regulations.
(2) Subject to provisos to sub-regulation (11) of regulation 18, the acquirer shall
complete payment of consideration whether in the form of cash, or as the case
may be, by issue, exchange or transfer of securities, to all shareholders who have
68
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “three working days”.
Page 53 of 71
tendered shares in acceptance of the open offer, within ten working days of the
expiry of the tendering period.
(3) Unclaimed balances, if any, lying to the credit of the special escrow account
referred to in sub-regulation (1) at the end of seven years from the date of deposit
thereof, shall be transferred to the Investor Protection and Education Fund
established under the Securities and Exchange Board of India (Investor
Protection and Education Fund) Regulations, 2009.
Completion of acquisition.
22.(1) The acquirer shall not complete the acquisition of shares or voting rights in, or
control over, the target company, whether by way of subscription to shares or a
purchase of shares attracting the obligation to make an open offer for acquiring
shares, until the expiry of the offer period:
Provided that in case of an offer made under sub-regulation (1) of
regulation 20, pursuant to a preferential allotment, the offer shall be completed
within the period as provided under sub-regulation (1) of regulation 74 of
Securities and Exchange Board of India (Issue of Capital and Disclosure)
Regulations, 2009.
69 [Provided further that in case of a delisting offer made under
regulation 5A, the acquirer shall complete the acquisition of shares attracting
the obligation to make an offer for acquiring shares in terms of regulations 3, 4
or 5, only after making the public announcement regarding the success of the
delisting proposal made in terms of sub-regulation (1) regulation 18 of
Securities and Exchange Board of India (Delisting of Equity Shares)
Regulations, 2009.]
(2) Notwithstanding anything contained in sub-regulation (1), subject to the acquirer
depositing in the escrow account under regulation 17, cash of an amount equal to
70
[the entire] consideration payable under the open offer assuming full
acceptance of the open offer, the parties to such agreement may after the expiry
69
w.e.f. 24-03-2015.
70
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “one hundred per cent of the”.
Page 54 of 71
of twenty-one working days from the date of detailed public statement, act upon
the agreement and the acquirer may complete the acquisition of shares or voting
rights in, or control over the target company as contemplated.
71
[(2A) Notwithstanding anything contained in sub-regulation (1), an acquirer may
acquire shares of the target company through preferential issue or through the
stock exchange settlement process, 72[***] subject to,-
(i) such shares being kept in an escrow account,
(ii) the acquirer not exercising any voting rights over such shares kept in the
escrow account:
Provided that such shares may be transferred to the account of the acquirer,
subject to the acquirer complying with requirements specified in sub-regulation
(2).]
(3) The acquirer shall complete the acquisitions contracted under any agreement
attracting the obligation to make an open offer not later than twenty-six weeks
from the expiry of the offer period:
Provided that in the event of any extraordinary and supervening
circumstances rendering it impossible to complete such acquisition within such
period, the Board may for reasons to be published, may grant an extension of
time by such period as it may deem fit in the interests of investors in securities
and the securities market.
Withdrawal of open offer.

23.(1) An open offer for acquiring shares once made shall not be withdrawn except under
any of the following circumstances,—
(a) statutory approvals required for the open offer or for effecting the acquisitions
attracting the obligation to make an open offer under these regulations having
been finally refused, subject to such requirements for approval having been
specifically disclosed in the detailed public statement and the letter of offer;
71
w.e.f. 26-03-2013.
72
Words “other than through bulk deals or block deals,” omitted by the SEBI (Substantial Acquisition of
Shares and Takeovers) (Third Amendment) Regulations, 2020, w.e.f 01-07-2020.
Page 55 of 71
(b) the acquirer, being a natural person, has died;
(c) any condition stipulated in the agreement for acquisition attracting the
obligation to make the open offer is not met for reasons outside the reasonable
control of the acquirer, and such agreement is rescinded, subject to such
conditions having been specifically disclosed in the detailed public statement
and the letter of offer; or
73
[Provided that an acquirer shall not withdraw an open offer pursuant to a
public announcement made under clause (g) of sub-regulation (2) of regulation
13, even if the proposed acquisition through the preferential issue is not
successful.]
(d) such circumstances as in the opinion of the Board, merit withdrawal.
Explanation.— For the purposes of clause (d) of sub-regulation (1), the Board
shall pass a reasoned order permitting withdrawal, and such order shall be
hosted by the Board on its official website.
(2) In the event of withdrawal of the open offer, the acquirer shall through the
manager to the open offer, within two working days,—
(a) make an announcement in the same newspapers in which the public
announcement of the open offer was published, providing the grounds and
reasons for withdrawal of the open offer; and
(b) simultaneously with the announcement, inform in writing to,—
(i) the Board;
(ii) all the stock exchanges on which the shares of the target company
are listed, and the stock exchanges shall forthwith disseminate such
information to the public; and
(iii) the target company at its registered office.
CHAPTER - IV
OTHER OBLIGATIONS
Directors of the target company.
73
w.e.f. 26-03-2013.
Page 56 of 71
24.(1) During the offer period, no person representing the acquirer or any person
acting in concert with him shall be appointed as director on the board of
directors of the target company, whether as an additional director or in a casual
vacancy:
Provided that after an initial period of fifteen working days from the
date of detailed public statement, appointment of persons representing the
acquirer or persons acting in concert with him on the board of directors may be
effected in the event the acquirer deposits in cash in the escrow account referred
to in regulation 17, 74[the entire] consideration payable under the open offer:
Provided further that where the acquirer has specified conditions to
which the open offer is subject in terms of clause (c) of sub-regulation (1) of
regulation 23, no director representing the acquirer may be appointed to the
board of directors of the target company during the offer period unless the
acquirer has waived or attained such conditions and complies with the
requirement of depositing cash in the escrow account.
(2) Where an open offer is made conditional upon minimum level of acceptances, the
acquirer and persons acting in concert shall, notwithstanding anything contained in
these regulations, and regardless of the size of the cash deposited in the escrow
account referred to regulation 17, not be entitled to appoint any director representing
the acquirer or any person acting in concert with him on the board of directors of the
target company during the offer period.
(3) During the pendency of competing offers, notwithstanding anything contained in
these regulations, and regardless of the size of the cash deposited in the escrow
account referred to in regulation 17, by any acquirer or person acting in concert with
him, there shall be no induction of any new director to the board of directors of the
target company:
Provided that in the event of death or incapacitation of any director, the
vacancy arising therefrom may be filled by any person subject to approval of such
appointment by shareholders of the target company by way of a postal ballot.
74
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “one hundred per cent of the”.
Page 57 of 71
(4) In the event the acquirer or any person acting in concert is already represented by a
director on the board of the target company, such director shall not participate in any
deliberations of the board of directors of the target company or vote on any matter in
relation to the open offer.
Obligations of the acquirer.
25(1) Prior to making the public announcement of an open offer for acquiring shares under
these regulations, the acquirer shall ensure that firm financial arrangements have been
made for fulfilling the payment obligations under the open offer and that the acquirer
is able to implement the open offer, subject to any statutory approvals for the open
offer that may be necessary.
(2) In the event the acquirer has not declared an intention in the detailed public statement
and the letter of offer to alienate any material assets of the target company or of any
of its subsidiaries whether by way of sale, lease, encumbrance or otherwise outside
the ordinary course of business, the acquirer, where he has acquired control over the
target company, shall be debarred from causing such alienation for a period of two
years after the offer period:
Provided that in the event the target company or any of its subsidiaries is
required to so alienate assets despite the intention to alienate not having been
expressed by the acquirer, such alienation shall require a special resolution passed
by shareholders of the target company, by way of a postal ballot and the notice for
such postal ballot shall inter alia contain reasons as to why such alienation is
necessary.
(3) The acquirer shall ensure that the contents of the public announcement, the detailed
public statement, the letter of offer and the post-offer advertisement are true, fair
and adequate in all material aspects and not misleading in any material particular,
and are based on reliable sources, and state the source wherever necessary.
(4) The acquirer and persons acting in concert with him shall not sell shares of the target
company held by them, during the offer period.
(5) The acquirer and persons acting in concert with him shall be jointly and severally
responsible for fulfillment of applicable obligations under these regulations.
Page 58 of 71
Obligations of the target company.
26.(1) Upon a public announcement of an open offer for acquiring shares of a target
company being made, the board of directors of such target company shall ensure
that during the offer period, the business of the target company is conducted in the
ordinary course consistent with past practice.
(2) During the offer period, unless the approval of shareholders of the target company
by way of a special resolution by postal ballot is obtained, the board of directors of
either the target company or any of its subsidiaries shall not,—
(a) alienate any material assets whether by way of sale, lease, encumbrance or
otherwise or enter into any agreement therefor outside the ordinary course of
business;
(b) effect any material borrowings outside the ordinary course of business;
(c) issue or allot any authorised but unissued securities entitling the holder to
voting rights:
Provided that the target company or its subsidiaries may,—
(i) issue or allot shares upon conversion of convertible securities issued
prior to the public announcement of the open offer, in accordance with
pre-determined terms of such conversion;
(ii) issue or allot shares pursuant to any public issue in respect of which the
red herring prospectus has been filed with the Registrar of Companies
prior to the public announcement of the open offer; or
(iii)issue or allot shares pursuant to any rights issue in respect of which the
record date has been announced prior to the public announcement of the
open offer;
(d) implement any buy-back of shares or effect any other change to the capital
structure of the target company;
(e) enter into, amend or terminate any material contracts to which the target
company or any of its subsidiaries is a party, outside the ordinary course of
business, whether such contract is with a related party, within the meaning of
the term under applicable accounting principles, or with any other person; and
Page 59 of 71
(f) accelerate any contingent vesting of a right of any person to whom the target
company or any of its subsidiaries may have an obligation, whether such
obligation is to acquire shares of the target company by way of employee stock
options or otherwise.
(3) In any general meeting of a subsidiary of the target company in respect of the matters
referred to in sub-regulation (2), the target company and its subsidiaries, if any, shall
vote in a manner consistent with the special resolution passed by the shareholders of
the target company.
(4) The target company shall be prohibited from fixing any record date for a corporate
action on or after the third working day prior to the commencement of the tendering
period and until the expiry of the tendering period.
(5) The target company shall furnish to the acquirer within two working days from the
identified date, a list of shareholders as per the register of members of the target
company containing names, addresses, shareholding and folio number, in electronic
form, wherever available, and a list of persons whose applications, if any, for
registration of transfer of shares are pending with the target company:
Provided that the acquirer shall reimburse reasonable costs payable by
the target company to external agencies in order to furnish such information.
(6) Upon receipt of the detailed public statement, the board of directors of the target
company shall constitute a committee of independent directors to provide reasoned
recommendations on such open offer, and the target company shall publish such
recommendations:
Provided that such committee shall be entitled to seek external
professional advice at the expense of the target company.
(7) The committee of independent directors shall provide its written reasoned
recommendations on the open offer to the shareholders of the target company and
such recommendations shall be published in such form as may be specified, at least
two working days before the commencement of the tendering period, in the same
newspapers where the public announcement of the open offer was published, and
simultaneously, a copy of the same shall be sent to,—
(i) the Board;
Page 60 of 71
(ii) all the stock exchanges on which the shares of the target company are listed, and
the stock exchanges shall forthwith disseminate such information to the public;
and
(iii) to the manager to the open offer, and where there are competing offers, to the
manager to the open offer for every competing offer.
(8) The board of directors of the target company shall facilitate the acquirer in
verification of shares tendered in acceptance of the open offer.
(9) The board of directors of the target company shall make available to all acquirers
making competing offers, any information and co-operation provided to any acquirer
who has made a competing offer.
(10) Upon fulfillment by the acquirer, of the conditions required under these regulations,
the board of directors of the target company shall without any delay register the
transfer of shares acquired by the acquirer in physical form, whether under the
agreement or from open market purchases, or pursuant to the open offer.
Obligations of the manager to the open offer.
27.(1) Prior to public announcement being made, the manager to the open offer shall
ensure that,—
(a) the acquirer is able to implement the open offer; and
(b) firm arrangements for funds through verifiable means have been made by
the acquirer to meet the payment obligations under the open offer.
(2) The manager to the open offer shall ensure that the contents of the public
announcement, the detailed public statement and the letter of offer and the post-
offer advertisement are true, fair and adequate in all material aspects, not
misleading in any material particular, are based on reliable sources, state the
source wherever necessary, and are in compliance with the requirements under
these regulations.
(3) The manager to the open offer shall furnish to the Board a due diligence
certificate along with the draft letter of offer filed under regulation 16.
(4) The manager to the open offer shall ensure that market intermediaries engaged for
the purposes of the open offer are registered with the Board.
Page 61 of 71
(5) The manager to the open offer shall exercise diligence, care and professional
judgment to ensure compliance with these regulations.
(6) The manager to the open offer shall not deal on his own account in the shares of the
target company during the offer period.
(7) The manager to the open offer shall file a report with the Board within fifteen
working days from the expiry of the tendering period, in such form as may be
specified, confirming status of completion of various open offer requirements.
CHAPTER - V
DISCLOSURES OF SHAREHOLDING AND CONTROL
Disclosure-related provisions.
28.(1) The disclosures under this Chapter shall be of the aggregated shareholding and
voting rights of the acquirer or promoter of the target company or every person
acting in concert with him.
(2) For the purposes of this Chapter, the acquisition and holding of any convertible
security shall also be regarded as shares, and disclosures of such acquisitions and
holdings shall be made accordingly.
75
[(3) For the purposes of this Chapter, the term “encumbrance” shall include,-
(a) any restriction on the free and marketable title to shares, by whatever name
called, whether executed directly or indirectly;
(b) pledge, lien, negative lien, non-disposal undertaking; or
(c) any covenant, transaction, condition or arrangement in the nature of
encumbrance, by whatever name called, whether executed directly or
indirectly.]
(4) Upon receipt of the disclosures required under this Chapter, the stock exchange
shall forthwith disseminate the information so received.
Disclosure of acquisition and disposal.
75
Sub-regulation (3) substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second
Amendment) Regulations, 2019, w.e.f. 29-07-2019. Prior to its substitution it read as follows,-
“(3) For the purposes of this Chapter, the term “encumbrance” shall include a pledge, lien or any such
transaction, by whatever name called.”
Page 62 of 71
29.(1) Any acquirer who acquires shares or voting rights in a target company which
taken together with shares or voting rights, if any, held by him and by persons
acting in concert with him in such target company, aggregating to five per cent or
more of the shares of such target company, shall disclose their aggregate
shareholding and voting rights in such target company in such form as may be
specified.
76
[(2) Any person, who together with persons acting in concert with him, holds shares or
voting rights entitling them to five per cent or more of the shares or voting rights
in a target company, shall disclose the number of shares or voting rights held and
change in shareholding or voting rights, even if such change results in
shareholding falling below five per cent, if there has been change in such holdings
from the last disclosure made under sub-regulation (1) or under this sub-
regulation; and such change exceeds two per cent of total shareholding or voting
rights in the target company, in such form as may be specified.]
(3) The disclosures required under sub-regulation (1) and sub-regulation (2) shall be
made within two working days of the receipt of intimation of allotment of shares,
77
or the acquisition [or the disposal] of shares or voting rights in the target
company to,—
(a) every stock exchange where the shares of the target company are listed; and
(b) the target company at its registered office.
(4) For the purposes of this regulation, shares taken by way of encumbrance shall be
treated as an acquisition, shares given upon release of encumbrance shall be treated
as a disposal, and disclosures shall be made by such person accordingly in such
form as may be specified:
76
Substituted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations,
2013, w.e.f. 26-03-2013. Prior to its substitution, sub-regulation (2) read as under:
“(2) Any acquirer, who together with persons acting in concert with him, holds shares or voting rights
entitling them to five per cent or more of the shares or voting rights in a target company, shall disclose every
acquisition or disposal of shares of such target company representing two per cent or more of the shares or
voting rights in such target company in such form as may be specified.”
77
2018, w.e.f. 11-09-2018.
Page 63 of 71
Provided that such requirement shall not apply to a scheduled
commercial bank or public financial institution 78[or a housing finance company or
a systemically important non-banking financial company] as pledgee in connection
with a pledge of shares for securing indebtedness in the ordinary course of business.
79
[Explanation. - For the purpose of this sub-regulation, -
A. a “housing finance company” means a housing finance company
registered with the National Housing Bank for carrying on the business
of housing finance and is either deposit taking or having asset size
worth rupees five hundred crores or more; and
B. a “systemically important non-banking financial company” shall have
the same meaning as assigned to it in the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018.]
Continual disclosures.
30(1) Every person, who together with persons acting in concert with him, holds shares or
voting rights entitling him to exercise twenty-five per cent or more of the voting
rights in a target company, shall disclose their aggregate shareholding and voting
rights as of the thirty-first day of March, in such target company in such form as may
be specified.
(2) The promoter of every target company shall together with persons acting in concert
with him, disclose their aggregate shareholding and voting rights as of the thirty-first
day of March, in such target company in such form as may be specified.
made within seven working days from the end of each financial year to,—
Disclosure of encumbered shares.
78
Inserted by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
(Third Amendment) Regulations, 2018 w.e.f. 31-12-2018
79
Inserted by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
(Third Amendment) Regulations, 2018 w.e.f. 31-12-2018.
Page 64 of 71
31(1) The promoter of every target company shall disclose details of shares in such target
company encumbered by him or by persons acting in concert with him in such form
as may be specified.
(2) The promoter of every target company shall disclose details of any invocation of
such encumbrance or release of such encumbrance of shares in such form as may be
specified.
made within seven working days from the creation or invocation or release of
encumbrance, as the case may be to,—
80
[(4) The promoter of every target company shall declare on a yearly basis that he, along
with persons acting in concert, has not made any encumbrance, directly or
indirectly, other than those already disclosed during the financial year.
(5) The declaration required under sub-regulation (4) shall be made within seven
working days from the end of each financial year to –
(b) the audit committee of the target company.]
81
[CHAPTER V-A
POWER TO RELAX STRICT ENFORCEMENT OF THE REGULATIONS
Exemption from enforcement of the regulations in special cases.
31A (1) The Board may, exempt any person or class of persons from the operation of all or
any of the provisions of these regulations for a period as may be specified but not
exceeding twelve months, for furthering innovation in technological aspects relating
80
2019 w.e.f. 29-07-2019.
81
Inserted by the SEBI (Regulatory Sandbox) (Amendment) Regulations, 2020, w.e.f. 17-04-2020.
Page 65 of 71
to testing new products, processes, services, business models, etc. in live
environment of regulatory sandbox in the securities markets.
(2) Any exemption granted by the Board under sub-regulation (1) shall be subject to the
applicant satisfying such conditions as may be specified by the Board including
conditions to be complied with on a continuous basis.
Explanation. — For the purposes of these regulations, "regulatory sandbox" means a live
testing environment where new products, processes, services, business models, etc.
may be deployed on a limited set of eligible customers for a specified period of time,
for furthering innovation in the securities market, subject to such conditions as may
be specified by the Board.]
CHAPTER - VI
MISCELLANEOUS
Power to issue directions.
32.(1) Without prejudice to its powers under Chapter VIA and section 24 of the Act, the
Board may, in the interest of investors in securities and the securities market, issue
such directions 82[or any other order] as it deems fit under section 11 or section 11B
or section 11D of the Act, including,—
(a) directing divestment of shares acquired in violation of these regulations,
whether through public auction or in the open market, or through an offer for
sale under the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009, and directing the appointment of a
merchant banker for such divestiture;
(b) directing transfer of the shares, or any proceeds of a directed sale of shares
acquired in violation of these regulations to the Investor Protection and
Education Fund established under the Securities and Exchange Board of India
(Investor Protection and Education Fund) Regulations, 2009;
(c) directing the target company or any depository not to give effect to any transfer
of shares acquired in violation of these regulations;
82
2018, w.e.f. 11-09-2018.
Page 66 of 71
(d) directing the acquirer or any person acting in concert, or any nominee or proxy
not to exercise any voting or other rights attached to shares acquired in violation
of these regulations;
(e) debarring any person who has violated these regulations from accessing the
capital market or dealing in securities for such period as may be directed,
having regard to the nature and gravity of the violation;
(f) directing the acquirer to make an open offer for acquiring shares of the target
company at such offer price as determined by the Board in accordance with
these regulations;
(g) directing the acquirer not to cause, and the target company not to effect, any
disposal of assets of the target company or any of its subsidiaries contrary to the
contents of the letter of offer, where the conditions set out in the proviso to sub-
regulation (2) of regulation 25 are not met;
(h) directing the acquirer who has failed to make an open offer or has delayed the
making of an open offer, to make the open offer and to pay interest at such rate
as considered appropriate by the Board along with the offer price;
(i) directing the acquirer who has failed to make payment of the open offer
consideration to shareholders, not to make any open offer or enter into any
transaction that would attract the obligation to make an open offer in respect of
shares of any target company for such period as the Board may deem fit;
(j) directing the acquirer who has made an open offer but has delayed making
payment of the open offer consideration to shareholders, to pay interest at such
rate as considered appropriate by the Board for the delayed period;
(k) directing any person to cease and desist from exercising control acquired over
any target company without complying with the requirements under these
regulations;
(l) directing divestiture of such number of shares as would result in the
shareholding of an acquirer and persons acting in concert with him being
limited to the maximum permissible non-public shareholding or below.
(2) In any proceedings initiated by the Board, the Board shall comply with principles of
natural justice before issuing directions to any person.
Page 67 of 71
(3) The Board may, for failure to carry out the requirements of these regulations by any
intermediary registered with the Board, initiate appropriate proceedings in accordance
with applicable regulations.

33. In order to remove any difficulties in the interpretation or application of the
83
provisions of these regulations, the Board [may issue clarifications or guidelines
from time to time]:
84
[. ]
Amendment to other regulations.

34. The regulations specified in the Schedule shall be amended in the manner and to the
extent stated therein.
Repeal and Savings.

35.(1) The Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997, 85[stands] repealed from the date on which these
regulations come into force.
(a) anything done or any action taken or purported to have been done or taken
including comments on any letter of offer, exemption granted by the Board, fees
collected, any adjudication, enquiry or investigation commenced or show-cause
notice issued under the repealed regulations, prior to such repeal, shall be
83
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “shall have the power to issue directions through
guidance notes or circulars”.
84
Omitted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations,
2018, w.e.f. 11-09-2018. Prior to its omission, it read as “Provided that where any direction is issued by the
Board in a specific case relating to interpretation or application of any provision of these regulations, it shall
be done only after affording a reasonable opportunity of being heard to the concerned persons and after
recording reasons for the direction”.
85
Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as “stand”.
Page 68 of 71
deemed to have been done or taken under the corresponding provisions of these
regulations;
(b) the previous operation of the repealed regulations or anything duly done or
suffered thereunder, any right, privilege, obligation or liability acquired, accrued
or incurred under the repealed regulations, any penalty, forfeiture or punishment
incurred in respect of any offence committed against the repealed regulations, or
any investigation, legal proceeding or remedy in respect of any such right,
privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid,
shall remain unaffected as if the repealed regulations has never been repealed;
(c) any open offer for which a public announcement has been made under the
repealed regulations shall be required to be continued and completed under the
repealed regulations.
(3) After the repeal of Securities and Exchange Board of India (Substantial Acquisition of
Shares and Takeovers) Regulations, 1997, any reference thereto in any other regulations
made, guidelines or circulars issued thereunder by the Board shall be deemed to be a
reference to the corresponding provisions of these regulations.
SCHEDULE
[See regulation 34]
Amendment to Securities and Exchange Board of India (Issue of Capital and

Disclosure Requirements) Regulations, 2009.
(i) In regulation 3, in clause (f), for the full stop, the symbol “:” shall be substituted;
(ii) In regulation 3, after clause (f), the following new proviso shall be inserted,
namely: -
“Provided that the provisions of these regulations shall not apply to issue of
securities under clause (b), (d) and (e) of sub-regulation (1) of regulation 9 of
Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011.”;
Page 69 of 71
(iii) In regulation 74, after sub-regulation (2), the following new sub-regulation shall
be inserted:-
“(3) Notwithstanding anything contained in this regulation, where a preferential
allotment is made that attracts an obligation to make an open offer for shares of
the issuer under Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulation, 2011, and there is no offer
made under sub-regulation (1) of regulation 20 of the Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers) Regulation,
2011, the period of fifteen days shall be counted from the expiry of the period
specified in sub-regulation (1) of regulation 20 or date of receipt of all statutory
approvals required for the completion of an open offer under the Securities and
Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulation, 2011:
Provided that if an offer is made under sub-regulation (1) of
regulation 20 of the Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulation, 2011, the period of fifteen
days shall be counted from the expiry of the offer period as defined in the
Takeovers) Regulation, 2011:
Provided further that the provisions of this sub-regulation shall not
apply to an offer made under sub-regulation (1) of regulation 20 of the
Takeovers) Regulation, 2011, pursuant to a preferential allotment.”;
(iv) In Schedule VIII, in part E, in paragraph 5, in clause (VI), in sub-clause (C), after
item 6, the following new item shall be inserted, namely: -
“(6A) Disclosure of ex-rights price as referred under clause of (b) of sub-
regulation 4 of regulation 10 of Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulation, 2011.”
U. K. SINHA
CHAIRMAN
Page 70 of 71
***************
Page 71 of 71
GAZETTE OF INDIA
EXTRAORDINARY
NEW DELHI, SEPTEMBER 02, 2015
NOTIFICATION
Mumbai, the 2nd September, 2015
SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS

AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
No. SEBI/LAD-NRO/GN/2015-16/013 In exercise of the powers conferred by section 11,

sub-section (2) of section 11A and section 30 of the Securities and Exchange Board of India
Act, 1992 (15 of 1992) read with section 31 of the Securities Contracts (Regulation) Act, 1956
(42 of 1956), the Securities and Exchange Board of India hereby makes the following
Regulations, namely:—
CHAPTER I
PRELIMINARY
Short title and commencement.
1. (1) These regulations may be called the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
(2) They shall come into force on the ninetieth day from the date of their publication in the
Official Gazette:
Provided that the provisions of sub-regulation (4) of regulation 23 and regulation 31A
shall come into force on the date of notification of these regulations.
Definitions.
2. (1) In these regulations, unless the context otherwise requires:—

(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(b) “associate” shall mean any entity which is an associate under sub-section (6) of
section 2 of the Companies Act, 2013 or under the applicable accounting standards:
Provided that this definition shall not be applicable for the units issued by mutual
fund which are listed on a recognised stock exchange(s) for which the provisions of
the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 shall
be applicable;
1
(c) "Board" means the Securities and Exchange Board of India established under
section 3 of the Act ;
(d) “board of directors” or “board of trustees” shall mean the board of directors or
board of trustees, whichever applicable, of the listed entity;
(e) “chief executive officer” or “managing director” or “manager” shall mean the
person so appointed in terms of the Companies Act, 2013;
(f) “chief financial officer” or “whole time finance director” or “head of finance”,
by whatever name called, shall mean the person heading and discharging the
finance function of the listed entity as disclosed by it to the recognised stock
exchange(s) in its filing under these regulations;
(g) “committee” shall mean committee of board of directors or any other committee
so constituted;
(h) “designated securities” means specified securities, non-convertible debt

securities, non-convertible redeemable preference shares, perpetual debt
instrument, perpetual non-cumulative preference shares, Indian depository
receipts, securitised debt instruments, [security receipts,]1 units issued by mutual
funds and any other securities as may be specified by the Board ;
(i) “financial year” shall have the same meaning as assigned to it under sub-section
(41) of section 2 of the Companies Act, 2013;
2
[(ia) “fugitive economic offender” shall mean an individual who is declared a fugitive
economic offender under section 12 of the Fugitive Economic Offenders Act,
2018 (17 of 2018);]
(j) "global depository receipts” means global depository receipts as defined in sub-
section (44) of section 2 of the Companies Act, 2013;
(k) “half year” means the period of six months commencing on the first day of
April or October of a financial year;
(l) “half yearly results” means the financial results prepared in accordance with
these regulations in respect of a half year;
(m) "holding company" means a holding company as defined in sub-section (46) of

section 2 of the Companies Act, 2013;
(n) ‘Indian depository receipts’ means Indian depository receipts as defined in sub-
section(48) of section 2 of the Companies Act, 2013;
1
Inserted by SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2018,
w.e.f. 06.09.2018.
2
Inserted by SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2018,
w.e.f. 16.11.2018.
2
[(na) “Insolvency Code” means the Insolvency and Bankruptcy Code, 2016 [No. 31 of
2016]]3
(o) “key managerial personnel” means key managerial personnel as defined in sub-
section (51) of section 2 of the Companies Act, 2013;
(p) "listed entity" means an entity which has listed, on a recognised stock
exchange(s), the designated securities issued by it or designated securities issued
under schemes managed by it, in accordance with the listing agreement entered
into between the entity and the recognised stock exchange(s);
(q) “listing agreement” shall mean an agreement that is entered into between a
recognised stock exchange and an entity, on the application of that entity to the
recognised stock exchange, undertaking to comply with conditions for listing of
designated securities;
(r) “main board" means main board as defined in clause (a) of sub-regulation (1) of
regulation 106N of the Securities and Exchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations, 2009;
(s) “net worth” means net worth as defined in sub-section (57) of section 2 of the
Companies Act, 2013;
(t) ‘non-convertible debt securities’ which is ‘debt securities’ as defined under

regulation 2(1)(e) of the Securities and Exchange Board of India (Issue and
Listing of Debt Securities) Regulations, 2008;
(u) ‘non-convertible redeemable preference shares’, ‘perpetual debt

instrument’/'innovative perpetual debt instrument' and ‘perpetual non-
cumulative preference share’ shall have the same meaning as assigned to them in
the Securities and Exchange Board of India (Issue and Listing of Non-
Convertible Redeemable Preference Shares) Regulations, 2013;
(v) "offer document" shall have the same meaning assigned to it under clause (x) of
sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009, clause (j) of
sub-regulation(1) of regulation 2 of the Securities and Exchange Board of India
(Issue and Listing of Debt Securities) Regulations, 2008, clause (p) of sub-
regulation (1) of regulation 2 of the Securities and Exchange Board of India
(Issue and Listing of Non-Convertible Redeemable Preference Shares)
Regulations, 2013, clause (r) of regulation 2 of the Securities and Exchange
Board of India (Mutual Funds) Regulations, 1996 and clause (l) of sub-regulation
(1) of regulation 2 of the [Securities and Exchange Board of India (Issue and
3
Inserted by SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2018,
w.e.f. 31.05.2018.
3
Listing of Securitised Debt Instruments and Security Receipts) Regulations,
2008]4, as may be applicable;
(w) "promoter" and "promoter group" shall have the same meaning as assigned to
them respectively in clauses (za) and (zb) of sub-regulation (1) of regulation 2 of
the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009.
(x) "public" means public as defined under clause (d) of rule 2 of the Securities
Contracts (Regulation) Rules, 1957;
(y) "public shareholding" means public shareholding as defined under clause (e) of
rule 2 of the Securities Contracts (Regulation) Rules, 1957;
(z) “quarter” means the period of three months commencing on the first day of
April, July, October or January of a financial year;
(za) "quarterly results" means the financial results prepared in accordance with these
regulations in respect of a quarter;
(zb) “related party” means a related party as defined under sub-section (76) of
section 2 of the Companies Act, 2013 or under the applicable accounting standards:
5
[Provided that any person or entity belonging to the promoter or promoter
group of the listed entity and holding 20% or more of shareholding in the listed
entity shall be deemed to be a related party.]
Provided 6 [further] that this definition shall not be applicable for the units
issued by mutual funds which are listed on a recognised stock exchange(s);
(zc) “related party transaction” means a transfer of resources, services or obligations

between a listed entity and a related party, regardless of whether a price is charged
and a "transaction" with a related party shall be construed to include a single
transaction or a group of transactions in a contract:
Provided that this definition shall not be applicable for the units issued by mutual
funds which are listed on a recognised stock exchange(s);
(zd) “relative” means relative as defined under sub-section (77) of section 2 of the
Companies Act, 2013 and rules prescribed there under:
Provided this definition shall not be applicable for the units issued by mutual fund
which are listed on a recognised stock exchange(s);
4
Substituted by SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations,
2018, w.e.f. 06.09.2018. Prior to this, it read as “Securities and Exchange Board of India (Public Offer and
Listing of Securitised Debt Instruments) Regulations, 2008”.
5
Inserted by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018,
w.e.f. 1.4.2019
6
Inserted ibid.
4
(ze) "schedule" means a schedule annexed to these regulations;
(zf) "securities laws" means the Act, the Securities Contracts (Regulation) Act, 1956,
the Depositories Act, 1996, and the provisions of the Companies Act, 1956 and
Companies Act, 2013, and the rules, regulations, circulars or guidelines made
thereunder.
[(zg) “securitized debt instruments” shall have the meaning assigned to it under the
Securities and Exchange Board of India (Issue and Listing of Securitised Debt
Instruments and Security Receipts) Regulations, 2008;]7
[(zga) “security receipts” shall have the meaning assigned to it under the Securities
and Exchange Board of India (Issue and Listing of Securitised Debt Instruments and
Security Receipts) Regulations, 2008;]8
(zh) “servicer” means servicer as defined under clause(t) of sub-regulation (1) of

regulation 2 of the [Securities and Exchange Board of India (Issue and Listing of
Securitised Debt Instruments and Security Receipts) Regulations, 2008;]9
(zi) "small and medium enterprises" or "SME" shall mean an entity which has issued
specified securities in accordance with the provisions of Chapter XB of the
Securities and Exchange Board of India (Issue of Capital and Disclosure
(zj) “SME Exchange” means an SME exchange as defined under clause (c) of sub-
regulation (1) of regulation 106N of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009;
(zk) "stock exchange" means a recognised stock exchange as defined under clause (f)
of section 2 of the Securities Contracts (Regulation) Act, 1956;
(zl) ‘specified securities’ means ‘equity shares’ and ‘convertible securities’ as

defined under clause (zj) of sub-regulation (1) of regulation 2 of the Securities and
Regulations, 2009;
(zm) “subsidiary” means a subsidiary as defined under sub-section(87) of section 2

of the Companies Act, 2013;
7
2018, w.e.f. 06.09.2018. Prior to this, it read as “[(zg) ‘securitised debt instruments’ as defined in the Securities
and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008”.
8
Inserted by the SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations,
2018, w.e.f. 06.09.2018.
9
Listing of Securitised Debt Instruments) Regulations, 2008”
5
(2) All other words and expressions used but not defined in these regulations, but defined in
the Act or the Companies Act, 2013, the Securities Contracts (Regulation) Act, 1956, the
Depositories Act, 1996 and/or the rules and regulations made thereunder shall have the
same meaning as respectively assigned to them in such Acts or rules or regulations or any
statutory modification or re-enactment thereto, as the case may be.
Applicability of the regulations.

3. Unless otherwise provided, these regulations shall apply to the listed entity who has listed
any of the following designated securities on recognised stock exchange(s):
(a) specified securities listed on main board or SME Exchange or institutional
trading platform;
(b) non-convertible debt securities, non-convertible redeemable preference shares,
perpetual debt instrument, perpetual non-cumulative preference shares;
(c) Indian depository receipts;
(d) securitised debt instruments;
10
[(da) security receipts;]
(e) units issued by mutual funds;
(f) any other securities as may be specified by the Board.
CHAPTER II
PRINCIPLES GOVERNING DISCLOSURES AND OBLIGATIONS OF LISTED
ENTITY
Principles governing disclosures and obligations.

4. (1) The listed entity which has listed securities shall make disclosures and abide by its
obligations under these regulations, in accordance with the following principles:
(a) Information shall be prepared and disclosed in accordance with applicable

standards of accounting and financial disclosure.
(b) The listed entity shall implement the prescribed accounting standards in letter and
spirit in the preparation of financial statements taking into consideration the interest
of all stakeholders and shall also ensure that the annual audit is conducted by an
independent, competent and qualified auditor.
(c) The listed entity shall refrain from misrepresentation and ensure that the
information provided to recognised stock exchange(s) and investors is not
misleading.
(d) The listed entity shall provide adequate and timely information to recognised stock
exchange(s) and investors.
10
2018, w.e.f. 06.09.2018.
6
(e) The listed entity shall ensure that disseminations made under provisions of these
regulations and circulars made thereunder, are adequate, accurate, explicit, timely
and presented in a simple language.
(f) Channels for disseminating information shall provide for equal, timely and cost
efficient access to relevant information by investors.
(g) The listed entity shall abide by all the provisions of the applicable laws including
the securities laws and also such other guidelines as may be issued from time to
time by the Board and the recognised stock exchange(s) in this regard and as may
be applicable.
(h) The listed entity shall make the specified disclosures and follow its obligations in
letter and spirit taking into consideration the interest of all stakeholders.
(i) Filings, reports, statements, documents and information which are event based or
are filed periodically shall contain relevant information.
(j) Periodic filings, reports, statements, documents and information reports shall
contain information that shall enable investors to track the performance of a listed
entity over regular intervals of time and shall provide sufficient information to
enable investors to assess the current status of a listed entity.
(2) The listed entity which has listed its specified securities shall comply with the corporate
governance provisions as specified in chapter IV which shall be implemented in a manner
so as to achieve the objectives of the principles as mentioned below.
(a) The rights of shareholders: The listed entity shall seek to protect and facilitate the
exercise of the following rights of shareholders:
(i) right to participate in, and to be sufficiently informed of, decisions concerning
fundamental corporate changes.
(ii) opportunity to participate effectively and vote in general shareholder meetings.
(iii)being informed of the rules, including voting procedures that govern general
shareholder meetings.
(iv) opportunity to ask questions to the board of directors, to place items on the
agenda of general meetings, and to propose resolutions, subject to reasonable
limitations.
(v) Effective shareholder participation in key corporate governance decisions,
such as the nomination and election of members of board of directors.
(vi) exercise of ownership rights by all shareholders, including institutional
investors.
(vii) adequate mechanism to address the grievances of the shareholders.
(viii) protection of minority shareholders from abusive actions by, or in the
interest of, controlling shareholders acting either directly or indirectly, and
effective means of redress.
7
(b) Timely information: The listed entity shall provide adequate and timely information
to shareholders, including but not limited to the following:
(i) sufficient and timely information concerning the date, location and agenda of
general meetings, as well as full and timely information regarding the issues to
be discussed at the meeting.
(ii) Capital structures and arrangements that enable certain shareholders to obtain
a degree of control disproportionate to their equity ownership.
(iii)rights attached to all series and classes of shares, which shall be disclosed to
investors before they acquire shares.
(c) Equitable treatment: The listed entity shall ensure equitable treatment of all
shareholders, including minority and foreign shareholders, in the following manner:
(i) All shareholders of the same series of a class shall be treated equally.
(ii) Effective shareholder participation in key corporate governance decisions,
such as the nomination and election of members of board of directors, shall be
facilitated.
(iii)Exercise of voting rights by foreign shareholders shall be facilitated.
(iv) The listed entity shall devise a framework to avoid insider trading and abusive
self-dealing.
(v) Processes and procedures for general shareholder meetings shall allow for
equitable treatment of all shareholders.
(vi) Procedures of listed entity shall not make it unduly difficult or expensive to
cast votes.
(d) Role of stakeholders in corporate governance: The listed entity shall recognise the
rights of its stakeholders and encourage co-operation between listed entity and the
stakeholders, in the following manner:
(i) The listed entity shall respect the rights of stakeholders that are established by
law or through mutual agreements.
(ii) Stakeholders shall have the opportunity to obtain effective redress for
violation of their rights.
(iii)Stakeholders shall have access to relevant, sufficient and reliable information
on a timely and regular basis to enable them to participate in corporate
governance process.
(iv) The listed entity shall devise an effective whistle blower mechanism enabling
stakeholders, including individual employees and their representative bodies,
to freely communicate their concerns about illegal or unethical practices.
(e) Disclosure and transparency: The listed entity shall ensure timely and accurate
disclosure on all material matters including the financial situation, performance,
ownership, and governance of the listed entity, in the following manner:
(i) Information shall be prepared and disclosed in accordance with the prescribed
standards of accounting, financial and non-financial disclosure.
(ii) Channels for disseminating information shall provide for equal, timely and
cost efficient access to relevant information by users.
(iii) Minutes of the meeting shall be maintained explicitly recording dissenting
opinions, if any.
8
.
(f) Responsibilities of the board of directors: The board of directors of the listed entity
shall have the following responsibilities:
(i) Disclosure of information:
(1) Members of board of directors and key managerial personnel shall
disclose to the board of directors whether they, directly, indirectly, or on
behalf of third parties, have a material interest in any transaction or
matter directly affecting the listed entity.
(2) The board of directors and senior management shall conduct themselves
so as to meet the expectations of operational transparency to stakeholders
while at the same time maintaining confidentiality of information in order
to foster a culture of good decision-making.
(ii) Key functions of the board of directors-
(1) Reviewing and guiding corporate strategy, major plans of action, risk
policy, annual budgets and business plans, setting performance
objectives, monitoring implementation and corporate performance, and
overseeing major capital expenditures, acquisitions and divestments.
(2) Monitoring the effectiveness of the listed entity’s governance practices
and making changes as needed.
(3) Selecting, compensating, monitoring and, when necessary, replacing key
managerial personnel and overseeing succession planning.
(4) Aligning key managerial personnel and remuneration of board of
directors with the longer term interests of the listed entity and its
shareholders.
(5) Ensuring a transparent nomination process to the board of directors with
the diversity of thought, experience, knowledge, perspective and gender
in the board of directors.
(6) Monitoring and managing potential conflicts of interest of management,
members of the board of directors and shareholders, including misuse of
corporate assets and abuse in related party transactions.
(7) Ensuring the integrity of the listed entity’s accounting and financial
reporting systems, including the independent audit, and that appropriate
systems of control are in place, in particular, systems for risk
management, financial and operational control, and compliance with the
law and relevant standards.
(8) Overseeing the process of disclosure and communications.
(9) Monitoring and reviewing board of director’s evaluation framework.
(iii) Other responsibilities:

(1) The board of directors shall provide strategic guidance to the listed entity,
ensure effective monitoring of the management and shall be accountable
to the listed entity and the shareholders.
(2) The board of directors shall set a corporate culture and the values by
which executives throughout a group shall behave.
(3) Members of the board of directors shall act on a fully informed basis, in
good faith, with due diligence and care, and in the best interest of the
listed entity and the shareholders.
(4) The board of directors shall encourage continuing directors training to
ensure that the members of board of directors are kept up to date.
9
(5) Where decisions of the board of directors may affect different shareholder
groups differently, the board of directors shall treat all shareholders fairly.
(6) The board of directors shall maintain high ethical standards and shall take
into account the interests of stakeholders.
(7) The board of directors shall exercise objective independent judgement on
corporate affairs.
(8) The board of directors shall consider assigning a sufficient number of non-
executive members of the board of directors capable of exercising
independent judgement to tasks where there is a potential for conflict of
interest.
(9) The board of directors shall ensure that, while rightly encouraging positive
thinking, these do not result in over-optimism that either leads to
significant risks not being recognised or exposes the listed entity to
excessive risk.
(10) The board of directors shall have ability to ‘step back’ to assist executive
management by challenging the assumptions underlying: strategy,
strategic initiatives (such as acquisitions), risk appetite, exposures and the
key areas of the listed entity’s focus.
(11) When committees of the board of directors are established, their mandate,
composition and working procedures shall be well defined and disclosed
by the board of directors.
(12) Members of the board of directors shall be able to commit themselves
effectively to their responsibilities.
(13) In order to fulfil their responsibilities, members of the board of directors
shall have access to accurate, relevant and timely information.
(14) The board of directors and senior management shall facilitate the
independent directors to perform their role effectively as a member of the
board of directors and also a member of a committee of board of directors.
(3) In case of any ambiguity or incongruity between the principles and relevant regulations,
the principles specified in this Chapter shall prevail.
10
CHAPTER III
COMMON OBLIGATIONS OF LISTED ENTITIES
General obligation of compliance.
5. The listed entity shall ensure that key managerial personnel, directors, promoters or any
other person dealing with the listed entity, complies with responsibilities or obligations, if
any, assigned to them under these regulations.
Compliance Officer and his Obligations.

6. (1) A listed entity shall appoint a qualified company secretary as the compliance officer.
(2) The compliance officer of the listed entity shall be responsible for-
(a) ensuring conformity with the regulatory provisions applicable to the listed entity in
letter and spirit.
(b) co-ordination with and reporting to the Board, recognised stock exchange(s) and
depositories with respect to compliance with rules, regulations and other directives
of these authorities in manner as specified from time to time.
(c) ensuring that the correct procedures have been followed that would result in the
correctness, authenticity and comprehensiveness of the information, statements and
reports filed by the listed entity under these regulations.
(d) monitoring email address of grievance redressal division as designated by the listed
entity for the purpose of registering complaints by investors:
Provided that the requirements of this regulation shall not be applicable in the case of
units issued by mutual funds which are listed on recognised stock exchange(s) but shall be
governed by the provisions of the Securities and Exchange Board of India (Mutual Funds)
Regulations, 1996.
Share Transfer Agent.

7. (1) The listed entity shall appoint a share transfer agent or manage the share transfer
facility in-house:
Provided that, in the case of in-house share transfer facility, as and when the total
number of holders of securities of the listed entity exceeds one lakh, the listed entity
shall either register with the Board as a Category II share transfer agent or appoint
Registrar to an issue and share transfer agent registered with the Board.
(2)The listed entity shall ensure that all activities in relation to [***]11 share transfer facility
are maintained either in house or by Registrar to an issue and share transfer agent
registered with the Board.
11
The words “both physical and electronic” omitted by SEBI (Listing Obligations and Disclosure Requirements)
(Fourth Amendment) Regulations, 2018, w.e.f. 08.06.2018.
11
(3)The listed entity shall submit a compliance certificate to the exchange, duly signed by both
the compliance officer of the listed entity and the authorised representative of the share
transfer agent, wherever applicable, within one month of end of each half of the financial
year, certifying compliance with the requirements of sub- regulation (2).
(4)In case of any change or appointment of a new share transfer agent, the listed entity shall
enter into a tripartite agreement between the existing share transfer agent, the new share
transfer agent and the listed entity, in the manner as specified by the Board from time to
time:
Provided that in case the existing share transfer facility is managed in-house, the agreement
referred above shall be entered into between the listed entity and the new share transfer agent.
(5)The listed entity shall intimate such appointment, referred to in sub-regulation (4), to the
stock exchange(s) within seven days of entering into the agreement.
(6)The agreement referred to in sub-regulation (4) shall be placed in the subsequent meeting
of the board of directors:
Provided that the requirements of this regulation shall not be applicable to the units issued by
mutual funds that are listed on recognised stock exchange(s).
Co-operation with intermediaries registered with the Board.

8. The listed entity, wherever applicable, shall co-operate with and submit correct and
adequate information to the intermediaries registered with the Board such as credit
rating agencies, registrar to an issue and share transfer agents, debenture trustees etc,
within timelines and procedures specified under the Act, regulations and circulars
issued there under:
Provided that requirements of this regulation shall not be applicable to the units issued by
mutual funds listed on a recognised stock exchange(s) for which the provisions of the
Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 shall be
applicable.
Preservation of documents.
9. The listed entity shall have a policy for preservation of documents, approved by its board
of directors, classifying them in at least two categories as follows-
(a) documents whose preservation shall be permanent in nature ;
(b) documents with preservation period of not less than eight years after completion of
the relevant transactions:
Provided that the listed entity may keep documents specified in clauses (a) and (b) in
electronic mode.
Filing of information.
10. (1) The listed entity shall file the reports, statements, documents, filings and any other
information with the recognised stock exchange(s) on the electronic platform as
specified by the Board or the recognised stock exchange(s).
(2)The listed entity shall put in place infrastructure as required for compliance with
sub-regulation (1).
12
Scheme of Arrangement.
11. The listed entity shall ensure that any scheme of arrangement /amalgamation /merger
/reconstruction /reduction of capital etc. to be presented to any Court or Tribunal does
not in any way violate, override or limit the provisions of securities laws or
requirements of the stock exchange(s):
Provided that this regulation shall not be applicable for the units issued by Mutual Fund
which are listed on a recognised stock exchange(s).
Payment of dividend or interest or redemption or repayment.

12. The listed entity shall use any of the electronic mode of payment facility approved by
the Reserve Bank of India, in the manner specified in Schedule I, for the payment of
the following:
(a) dividends;
(b) interest;
(c) redemption or repayment amounts:
Provided that where it is not possible to use electronic mode of payment, ‘payable-at-par’
warrants or cheques may be issued:
Provided further that where the amount payable as dividend exceeds one thousand and five
hundred rupees, the ‘payable-at-par’ warrants or cheques shall be sent by speed post.
Grievance Redressal Mechanism.

13. (1) The listed entity shall ensure that adequate steps are taken for expeditious redressal
of investor complaints.
(2)The listed entity shall ensure that it is registered on the SCORES platform or such other
electronic platform or system of the Board as shall be mandated from time to time, in order
to handle investor complaints electronically in the manner specified by the Board.
(3)The listed entity shall file with the recognised stock exchange(s) on a quarterly basis,
within twenty one days from the end of each quarter, a statement giving the number of
investor complaints pending at the beginning of the quarter, those received during the
quarter, disposed of during the quarter and those remaining unresolved at the end of the
quarter.
(4)The statement as specified in sub-regulation (3) shall be placed, on quarterly basis, before
the board of directors of the listed entity.
Fees and other charges to be paid to the recognized stock exchange(s).

14. The listed entity shall pay all such fees or charges, as applicable, to the recognised
stock exchange(s), in the manner specified by the Board or the recognised stock
exchange(s).
13
CHAPTER IV
OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS SPECIFIED
SECURITIES
Applicability.
15. (1) The provisions of this chapter shall apply to a listed entity which has listed its
specified securities on any recognised stock exchange(s) either on the main board or on
SME Exchange or on institutional trading platform:
(2) The compliance with the corporate governance provisions as specified in regulations 17,
12
[17A,] 18, 19, 20, 21,22, 23, 24, 13[24A,] 25, 26, 27 and clauses (b) to (i) of sub-regulation
(2) of regulation 46 and para C , D and E of Schedule V shall not apply, in respect of -
(a) the listed entity having paid up equity share capital not exceeding rupees ten crore
and net worth not exceeding rupees twenty five crore, as on the last day of the previous
financial year:
Provided that where the provisions of the regulations specified in this regulation
becomes applicable to a listed entity at a later date, such listed entity shall comply with
the requirements those regulations within six months from the date on which the
provisions became applicable to the listed entity.
(b) the listed entity which has listed its specified securities on the SME Exchange:
Provided that for other listed entities which are not companies, but body corporate or
are subject to regulations under other statues, the provisions of corporate governance
provisions as specified in regulation 17, 14[17A,] 18, 19, 20, 21, 22, 23, 24, 15[24A,]
25, 26, 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C , D
and E of Schedule V shall apply to the extent that it does not violate their respective
statutes and guidelines or directives issued by the relevant authorities.
[(2A) The provisions as specified in regulation 17 shall not be applicable during the
insolvency resolution process period in respect of a listed entity which is undergoing
corporate insolvency resolution process under the Insolvency Code:
Provided that the role and responsibilities of the board of directors as specified
under regulation 17 shall be fulfilled by the interim resolution professional or
resolution professional in accordance with sections 17 and 23 of the Insolvency Code.
(2B) The provisions as specified in regulations 18, 19, 20 and 21 shall not be
applicable during the insolvency resolution process period in respect of a listed entity
which is undergoing corporate insolvency resolution process under the Insolvency
Code:
Provided that the roles and responsibilities of the committees specified in the
respective regulations shall be fulfilled by the interim resolution professional or
resolution professional.]16
12
w.e.f. 1.4.2019.
13
Inserted ibid.
14
w.e.f. 1.4.2019.
15
Inserted ibid.
16
w.e.f. 31.05.2018.
14
(3) Notwithstanding sub-regulation (2) above, the provisions of Companies Act, 2013 shall
continue to apply, wherever applicable.
Definitions.
16. (1) For the purpose of this chapter , unless the context otherwise requires -
(a) "control" shall have the same meaning as assigned to it under the Securities and
Regulations, 2011;
(b) "independent director" means a non-executive director, other than a nominee

director of the listed entity:
(i) who, in the opinion of the board of directors, is a person of integrity and
possesses relevant expertise and experience;
(ii) who is or was not a promoter of the listed entity or its holding, subsidiary
or associate company 17[or member of the promoter group of the listed
entity];
(iii) who is not related to promoters or directors in the listed entity, its holding,
subsidiary or associate company;
(iv) who, apart from receiving director's remuneration, has or had no material
pecuniary relationship with the listed entity, its holding, subsidiary or
associate company, or their promoters, or directors, during the two
immediately preceding financial years or during the current financial year;
(v) none of whose relatives has or had pecuniary relationship or transaction
with the listed entity, its holding, subsidiary or associate company, or their
promoters, or directors, amounting to two per cent. or more of its gross
turnover or total income or fifty lakh rupees or such higher amount as may
be prescribed from time to time, whichever is lower, during the two
immediately preceding financial years or during the current financial year;
(vi) who, neither himself, nor whose relative(s) —
(A) holds or has held the position of a key managerial personnel or is or
has been an employee of the listed entity or its holding, subsidiary or
associate company in any of the three financial years immediately
preceding the financial year in which he is proposed to be appointed;
(B) is or has been an employee or proprietor or a partner, in any of the
three financial years immediately preceding the financial year in
which he is proposed to be appointed, of —
(1) a firm of auditors or company secretaries in practice or cost
auditors of the listed entity or its holding, subsidiary or associate
company; or
(2) any legal or a consulting firm that has or had any transaction
with the listed entity, its holding, subsidiary or associate company
amounting to ten per cent or more of the gross turnover of such
firm;
(C) holds together with his relatives two per cent or more of the total
voting power of the listed entity; or
(D) is a chief executive or director, by whatever name called, of any non-
profit organisation that receives twenty-five per cent or more of its
17
w.e.f. 1.10.2018.
15
receipts or corpus from the listed entity, any of its promoters, directors
or its holding, subsidiary or associate company or that holds two per
cent or more of the total voting power of the listed entity;
(E) is a material supplier, service provider or customer or a lessor or
lessee of the listed entity;
(vii) who is not less than 21 years of age.
18
[(viii) who is not a non-independent director of another company on the
board of which any non-independent director of the listed entity is an
independent director:]
(c) “material subsidiary” shall mean a subsidiary, whose income or net worth
exceeds 19[ten] percent of the consolidated income or net worth respectively, of
the listed entity and its subsidiaries in the immediately preceding accounting
year.
Explanation.- The listed entity shall formulate a policy for determining ‘material’
subsidiary.
(d) “senior management” shall mean officers/personnel of the listed entity who are
members of its core management team excluding board of directors and
normally this shall comprise all members of management one level below the
20
[“chief executive officer/managing director/whole time director/manager
(including chief executive officer/manager, in case they are not part of the
board) and shall specifically include company secretary and chief financial
officer.]
Board of Directors.
17. (1) The composition of board of directors of the listed entity shall be as follows:
(a) board of directors shall have an optimum combination of executive and non-
executive directors with at least one woman director and not less than fifty per
cent. of the board of directors shall comprise of non-executive directors;
21
[Provided that the Board of directors of the top 500 listed entities shall have
at least one independent woman director by April 1, 2019 and the Board of
directors of the top 1000 listed entities shall have at least one independent
woman director by April 1, 2020;
Explanation: The top 500 and 1000 entities shall be determined on the basis of
market capitalisation, as at the end of the immediate previous financial year.]
(b) where the chairperson of the board of directors is a non-executive director, at

least one-third of the board of directors shall comprise of independent directors
and where the listed entity does not have a regular non-executive chairperson,
at least half of the board of directors shall comprise of independent directors:
18
w.e.f. 1.10.2018.
19
Substituted ibid for the word “twenty”, w.e.f. 1.4.2019.
20
Substituted for the words “executive directors, including all functional heads” by the SEBI (Listing
Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, w.e.f. 1.4.2019.
21
w.e.f. 1.4.2019.
16
Provided that where the regular non-executive chairperson is a promoter of the
listed entity or is related to any promoter or person occupying management
positions at the level of board of director or at one level below the board of
directors, at least half of the board of directors of the listed entity shall consist
of independent directors.
Explanation.- For the purpose of this clause, the expression “related to any
promoter" shall have the following meaning:
(i) if the promoter is a listed entity, its directors other than the independent
directors, its employees or its nominees shall be deemed to be related to it;
(ii) if the promoter is an unlisted entity, its directors, its employees or its nominees
shall be deemed to be related to it.
22
[(c) The board of directors of the top 1000 listed entities (with effect from April 1,
2019) and the top 2000 listed entities (with effect from April 1, 2020) shall comprise
of not less than six directors.
Explanation: The top 1000 and 2000 entities shall be determined on the basis of
market capitalisation as at the end of the immediate previous financial year.]
23
[(d) where the listed company has outstanding SR equity shares, atleast half of the
board of directors shall comprise of independent directors.]
24
[(1A) No listed entity shall appoint a person or continue the directorship of any
person as a non-executive director who has attained the age of seventy five years
unless a special resolution is passed to that effect, in which case the explanatory
statement annexed to the notice for such motion shall indicate the justification for
appointing such a person.]
25
[(1B). With effect from 26[April 1, 2022,] the top 500 listed entities shall ensure that
the Chairperson of the board of such listed entity shall -
(a) be a non-executive director;
(b) not be related to the Managing Director or the Chief Executive Officer as per the
definition of the term “relative” defined under the Companies Act, 2013:
Provided that this sub-regulation shall not be applicable to the listed entities which do
not have any identifiable promoters as per the shareholding pattern filed with stock
exchanges.
Explanation - The top 500 entities shall be determined on the basis of market
capitalisation, as at the end of the immediate previous financial year.]
22
w.e.f. 1.4.2019.
23
Inserted by the SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations,
2019, w.e.f. 29.7.2019.
24
w.e.f. 1.4.2019.
25
w.e.f. 1.4.2020.
26
Substituted for “April 1, 2020” by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2020, w.e.f. 10.1.2020.
17
(2) The board of directors shall meet at least four times a year, with a maximum time gap
of one hundred and twenty days between any two meetings.
27
[(2A) The quorum for every meeting of the board of directors of the top 1000 listed
entities with effect from April 1, 2019 and of the top 2000 listed entities with effect
from April 1, 2020 shall be one-third of its total strength or three directors, whichever is
higher, including at least one independent director.
Explanation I – For removal of doubts, it is clarified that the participation of the

directors by video conferencing or by other audio-visual means shall also be counted
for the purposes of such quorum.
Explanation II - The top 1000 and 2000 entities shall be determined on the basis of
market capitalisation, as at the end of the immediate previous financial year.]
(3) The board of directors shall periodically review compliance reports pertaining to all
laws applicable to the listed entity, prepared by the listed entity as well as steps taken
by the listed entity to rectify instances of non-compliances.
(4) The board of directors of the listed entity shall satisfy itself that plans are in place for
orderly succession for appointment to the board of directors and senior management.
(5) (a) The board of directors shall lay down a code of conduct for all members of board
of directors and senior management of the listed entity.
(b) The code of conduct shall suitably incorporate the duties of independent directors
as laid down in the Companies Act, 2013.
(6) (a) The board of directors shall recommend all fees or compensation, if any, paid to
non-executive directors, including independent directors and shall require approval
of shareholders in general meeting.
(b) The requirement of obtaining approval of shareholders in general meeting shall not
apply to payment of sitting fees to non-executive directors, if made within the
limits prescribed under the Companies Act, 2013 for payment of sitting fees
without approval of the Central Government.
(c) The approval of shareholders mentioned in clause (a), shall specify the limits for
the maximum number of stock options that may be granted to non-executive
directors, in any financial year and in aggregate.
28
[(ca) The approval of shareholders by special resolution shall be obtained every
year, in which the annual remuneration payable to a single non-executive director
exceeds fifty per cent of the total annual remuneration payable to all non-executive
directors, giving details of the remuneration thereof.]
27
w.e.f. the dates specified in the provision.
28
w.e.f. 1.4.2019.
18
(d) Independent directors shall not be entitled to any stock option.
29
[(e) The fees or compensation payable to executive directors who are promoters
or members of the promoter group, shall be subject to the approval of the
shareholders by special resolution in general meeting, if-
(i) the annual remuneration payable to such executive director exceeds rupees 5
crore or 2.5 per cent of the net profits of the listed entity, whichever is higher; or
(ii) where there is more than one such director, the aggregate annual remuneration
to such directors exceeds 5 per cent of the net profits of the listed entity:
Provided that the approval of the shareholders under this provision shall be valid
only till the expiry of the term of such director.
Explanation: For the purposes of this clause, net profits shall be calculated as per
section 198 of the Companies Act, 2013.]
(7) The minimum information to be placed before the board of directors is specified in
Part A of Schedule II.
(8) The chief executive officer and the chief financial officer shall provide the compliance
certificate to the board of directors as specified in Part B of Schedule II.
(9) (a) The listed entity shall lay down procedures to inform members of board of
directors about risk assessment and minimization procedures.
(b) The board of directors shall be responsible for framing, implementing and
monitoring the risk management plan for the listed entity.
30
[(10) The evaluation of independent directors shall be done by the entire board of directors
which shall include -
(a) performance of the directors; and
(b) fulfillment of the independence criteria as specified in these regulations and their
independence from the management:
Provided that in the above evaluation, the directors who are subject to evaluation shall
not participate.]
31
[(11). The statement to be annexed to the notice as referred to in sub-section (1) of section
102 of the Companies Act, 2013 for each item of special business to be transacted at a general
meeting shall also set forth clearly the recommendation of the board to the shareholders on
each of the specific items.]
29
Inserted ibid.
30
Substituted by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018,
w.e.f. 1.4.2019. Prior to the substitution, sub-regulation (10) read as follows:
“(10) The performance evaluation of independent directors shall be done by the entire board of directors:
Provided that in the above evaluation the directors who are subject to evaluation shall not participate.”
31
Inserted ibid.
19
32
[Maximum number of directorships.
17A. The directors of listed entities shall comply with the following conditions with respect
to the maximum number of directorships, including any alternate directorships that can be
held by them at any point of time -
(1) A person shall not be a director in more than eight listed entities with effect from
April 1, 2019 and in not more than seven listed entities with effect from April 1, 2020:
Provided that a person shall not serve as an independent director in more than seven
listed entities.
(2) Notwithstanding the above, any person who is serving as a whole time director /
managing director in any listed entity shall serve as an independent director in not
more than three listed entities.
For the purpose of this sub-regulation, the count for the number of listed entities on which a
person is a director / independent director shall be only those whose equity shares are listed
on a stock exchange.]
Audit Committee.
18. (1) Every listed entity shall constitute a qualified and independent audit committee in
accordance with the terms of reference, subject to the following:
(a) The audit committee shall have minimum three directors as members.
(b)Two-thirds of the members of audit committee shall be independent directors
33
[and in case of a listed entity having outstanding SR equity shares, the audit
committee shall only comprise of independent directors].
(c) All members of audit committee shall be financially literate and at least one
member shall have accounting or related financial management expertise.
Explanation (1).- For the purpose of this regulation, “financially literate” shall
mean the ability to read and understand basic financial statements i.e. balance
sheet, profit and loss account, and statement of cash flows.
Explanation (2).- For the purpose of this regulation , a member shall be considered
to have accounting or related financial management expertise if he or she possesses
experience in finance or accounting, or requisite professional certification in
accounting, or any other comparable experience or background which results in the
individual’s financial sophistication, including being or having been a chief
executive officer, chief financial officer or other senior officer with financial
oversight responsibilities.
(d)The chairperson of the audit committee shall be an independent director and he

shall be present at Annual general meeting to answer shareholder queries.
(e) The Company Secretary shall act as the secretary to the audit committee.
32
w.e.f. 1.4.2019.
33
2019, w.e.f. 29.7.2019.
20
(f) The audit committee at its discretion shall invite the finance director or head of the
finance function, head of internal audit and a representative of the statutory auditor
and any other such executives to be present at the meetings of the committee:
Provided that occasionally the audit committee may meet without the presence of
any executives of the listed entity.
(2) The listed entity shall conduct the meetings of the audit committee in the following
manner:
(a) The audit committee shall meet at least four times in a year and not more than one
hundred and twenty days shall elapse between two meetings.
(b)The quorum for audit committee meeting shall either be two members or one third
of the members of the audit committee, whichever is greater, with at least two
independent directors.
(c) The audit committee shall have powers to investigate any activity within its terms
of reference, seek information from any employee, obtain outside legal or other
professional advice and secure attendance of outsiders with relevant expertise, if it
considers necessary.
(3) The role of the audit committee and the information to be reviewed by the audit
committee shall be as specified in Part C of Schedule II.
Nomination and remuneration committee.

19. (1) The board of directors shall constitute the nomination and remuneration
committee as follows:
(a) the committee shall comprise of at least three directors ;
(b)all directors of the committee shall be non-executive directors; and
(c) at least fifty percent of the directors shall be independent directors 34[and in case of a
listed entity having outstanding SR equity shares, two thirds of the nomination and
remuneration committee shall comprise of independent directors].
(2) The Chairperson of the nomination and remuneration committee shall be an independent
director:
Provided that the chairperson of the listed entity, whether executive or non-executive,
may be appointed as a member of the Nomination and Remuneration Committee and
shall not chair such Committee.
35
[(2A) The quorum for a meeting of the nomination and remuneration committee shall
be either two members or one third of the members of the committee, whichever is
greater, including at least one independent director in attendance.]
(3) The Chairperson of the nomination and remuneration committee may be present at the
annual general meeting, to answer the shareholders' queries; however, it shall be up to
the chairperson to decide who shall answer the queries.
34
2019, w.e.f. 29.7.2019.
35
w.e.f. 1.4.2019.
21
36
[(3A) The nomination and remuneration committee shall meet at least once in a year.]
(4) The role of the nomination and remuneration committee shall be as specified as in Part D
of the Schedule II.
Stakeholders Relationship Committee.

20. (1) The listed entity shall constitute a Stakeholders Relationship Committee to
specifically look into 37[various aspects of interest] of shareholders, debenture holders
and other security holders.
(2) The chairperson of this committee shall be a non-executive director.

38
[(2A) At least three directors, with at least one being an independent director, shall be
members of the Committee 39[and in case of a listed entity having outstanding SR equity
shares, at least two thirds of the Stakeholders Relationship Committee shall comprise of
independent directors].]
40
[(3) The Chairperson of the Stakeholders Relationship Committee shall be present at the
annual general meetings to answer queries of the security holders.]
41
[(3A) The stakeholders relationship committee shall meet at least once in a year.]
(4) The role of the Stakeholders Relationship Committee shall be as specified as in Part D of
the Schedule II.
Risk Management Committee.

21. (1) The board of directors shall constitute a Risk Management Committee.
(2) The majority of members of Risk Management Committee shall consist of members of
the board of directors 42 [and in case of a listed entity having outstanding SR equity
shares, at least two thirds of the Risk Management Committee shall comprise of
independent directors].
(3) The Chairperson of the Risk management committee shall be a member of the board of
directors and senior executives of the listed entity may be members of the committee.
43
[(3A) The risk management committee shall meet at least once in a year.]
36
Inserted ibid.
37
Substituted for the words “the mechanism of redressal of grievances” by the SEBI (Listing Obligations and
Disclosure Requirements) (Amendment) Regulations, 2018, w.e.f. 1.4.2019.
38
w.e.f. 1.4.2019.
39
2019, w.e.f. 29.7.2019.
40
“(3) The board of directors shall decide other members of this committee.”
41
Inserted ibid.
42
2019, w.e.f. 29.7.2019.
43
w.e.f. 1.4.2019.
22
(4) The board of directors shall define the role and responsibility of the Risk Management
Committee and may delegate monitoring and reviewing of the risk management plan to
the committee and such other functions as it may deem fit 44 [such function shall
specifically cover cyber security].
(5) The provisions of this regulation shall be applicable to top 45 [500] listed entities,
determined on the basis of market capitalisation, as at the end of the immediate previous
financial year.
Vigil mechanism.
22. (1) The listed entity shall formulate a vigil mechanism for directors and employees to
report genuine concerns.
(2) The vigil mechanism shall provide for adequate safeguards against victimization of
director(s) or employee(s) or any other person who avail the mechanism and also provide
for direct access to the chairperson of the audit committee in appropriate or exceptional
cases.
Related party transactions.

23. (1) The listed entity shall formulate a policy on materiality of related party transactions
and on dealing with related party transactions 46[including clear threshold limits duly
approved by the board of directors and such policy shall be reviewed by the board of
directors at least once every three years and updated accordingly]:
Explanation. - A transaction with a related party shall be considered material if the
transaction(s) to be entered into individually or taken together with previous
transactions during a financial year, exceeds ten percent of the annual consolidated
turnover of the listed entity as per the last audited financial statements of the listed
entity.
47
[(1A) Notwithstanding the above, [with effect from July 01, 2019]48 a transaction involving
payments made to a related party with respect to brand usage or royalty shall be considered
material if the transaction(s) to be entered into individually or taken together with previous
transactions during a financial year, exceed 49 {five} percent of the annual consolidated
turnover of the listed entity as per the last audited financial statements of the listed entity.]
(2) All related party transactions shall require prior approval of the audit committee.
(3) Audit committee may grant omnibus approval for related party transactions proposed to
be entered into by the listed entity subject to the following conditions, namely-
(a) the audit committee shall lay down the criteria for granting the omnibus approval in
line with the policy on related party transactions of the listed entity and such approval
shall be applicable in respect of transactions which are repetitive in nature;
(b) the audit committee shall satisfy itself regarding the need for such omnibus
44
Inserted ibid.
45
Substituted for “100” by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2018, w.e.f. 1.4.2019.
46
Inserted ibid.
47
w.e.f. 1.4.2019.
48
Inserted by SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2019
49
Substituted for the word "two" by SEBI (Listing Obligations and Disclosure Requirements) (Third
Amendment) Regulations, 2019, w.e.f. June 27, 2019
23
approval and that such approval is in the interest of the listed entity;
(c) the omnibus approval shall specify:
(i) the name(s) of the related party, nature of transaction, period of
transaction, maximum amount of transactions that shall be entered into,
(ii) the indicative base price / current contracted price and the formula for
variation in the price if any; and
(iii) such other conditions as the audit committee may deem fit:
Provided that where the need for related party transaction cannot be foreseen
and aforesaid details are not available, audit committee may grant omnibus
approval for such transactions subject to their value not exceeding rupees one
crore per transaction.
(d) the audit committee shall review, at least on a quarterly basis, the details of related
party transactions entered into by the listed entity pursuant to each of the omnibus
approvals given.
(e) Such omnibus approvals shall be valid for a period not exceeding one year and
shall require fresh approvals after the expiry of one year:
(4) All material related party transactions shall require approval of the shareholders through
resolution and 50 [no related party shall vote to approve] such resolutions whether the
entity is a related party to the particular transaction or not:
[Provided that the requirements specified under this sub-regulation shall not apply in
respect of a resolution plan approved under section 31 of the Insolvency Code, subject to
the event being disclosed to the recognized stock exchanges within one day of the
resolution plan being approved;]51
(5) The provisions of sub-regulations (2), (3) and (4) shall not be applicable in the following
cases:
(a) transactions entered into between two government companies;
(b) transactions entered into between a holding company and its wholly owned subsidiary
whose accounts are consolidated with such holding company and placed before the
shareholders at the general meeting for approval.
Explanation. - For the purpose of clause (a), "government company(ies)" means Government
company as defined in sub-section (45) of section 2 of the Companies Act, 2013.
(6) The provisions of this regulation shall be applicable to all prospective transactions.
(7) For the purpose of this regulation, all entities falling under the definition of related parties
shall 52[not vote to approve the relevant transaction] irrespective of whether the entity is a
party to the particular transaction or not.
(8) All existing material related party contracts or arrangements entered into prior to the date
of notification of these regulations and which may continue beyond such date shall be
placed for approval of the shareholders in the first General Meeting subsequent to
notification of these regulations.
50
Substituted for the words “the related parties shall abstain from voting on” by the SEBI (Listing Obligations
and Disclosure Requirements) (Amendment) Regulations, 2018.
51
w.e.f. 31.05.2018.
52
Substituted for the words “abstain from voting” by the SEBI (Listing Obligations and Disclosure
Requirements) (Amendment) Regulations, 2018, w.e.f. 1.4.2019.
24
53
[(9) The listed entity shall submit within 30 days from the date of publication of its
standalone and consolidated financial results for the half year, disclosures of related party
transactions on a consolidated basis, in the format specified in the relevant accounting
standards for annual results to the stock exchanges and publish the same on its website.]
Corporate governance requirements with respect to subsidiary of listed entity.

24. 54[(1) At least one independent director on the board of directors of the listed entity shall
be a director on the board of directors of an unlisted material subsidiary, whether
incorporated in India or not.
Explanation - For the purposes of this provision, notwithstanding anything to the
contrary contained in regulation 16, the term “material subsidiary” shall mean a
subsidiary, whose income or net worth exceeds twenty percent of the consolidated
income or net worth respectively, of the listed entity and its subsidiaries in the
immediately preceding accounting year.]
(2) The audit committee of the listed entity shall also review the financial statements, in
particular, the investments made by the unlisted subsidiary.
(3) The minutes of the meetings of the board of directors of the unlisted subsidiary shall be
placed at the meeting of the board of directors of the listed entity.
(4) The management of the unlisted subsidiary shall periodically bring to the notice of the
board of directors of the listed entity, a statement of all significant transactions and
arrangements entered into by the unlisted subsidiary.
Explanation.- For the purpose of this regulation, the term “significant transaction or
arrangement” shall mean any individual transaction or arrangement that exceeds or is
likely to exceed ten percent of the total revenues or total expenses or total assets or total
liabilities, as the case may be, of the unlisted 55 [***] subsidiary for the immediately
preceding accounting year.
(5) A listed entity shall not dispose of shares in its material subsidiary resulting in reduction
of its shareholding (either on its own or together with other subsidiaries) to less than fifty
percent or cease the exercise of control over the subsidiary without passing a special
resolution in its General Meeting except in cases where such divestment is made under a
scheme of arrangement duly approved by a Court/Tribunal[, or under a resolution plan
duly approved under section 31 of the Insolvency Code and such an event is disclosed to
the recognized stock exchanges within one day of the resolution plan being approved]56.
53
Inserted ibid, w.e.f the half year ending March 31, 2019.
54
“(1) At least one independent director on the board of directors of the listed entity shall be a director on the
board of directors of an unlisted material subsidiary, incorporated in India.”
55
Word “material” omitted by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
56
w.e.f. 31.05.2018.
25
(6) Selling, disposing and leasing of assets amounting to more than twenty percent of the
assets of the material subsidiary on an aggregate basis during a financial year shall require
prior approval of shareholders by way of special resolution, unless the sale/disposal/lease
is made under a scheme of arrangement duly approved by a Court/Tribunal[, or under a
resolution plan duly approved under section 31 of the Insolvency Code and such an event
is disclosed to the recognized stock exchanges within one day of the resolution plan being
approved]57.
(7) Where a listed entity has a listed subsidiary, which is itself a holding company, the
provisions of this regulation shall apply to the listed subsidiary in so far as its subsidiaries
are concerned.
58
[Secretarial Audit.
24A. Every listed entity and its material unlisted subsidiaries incorporated in India shall
undertake secretarial audit and shall annex with its annual report, a secretarial audit report,
given by a company secretary in practice, in such form as may be specified with effect from
the year ended March 31, 2019.]
Obligations with respect to independent directors.

25. 59 [(1) No person shall be appointed or continue as an alternate director for an
independent director of a listed entity with effect from October 1, 2018.]
(2) The maximum tenure of independent directors shall be in accordance with the Companies
Act, 2013 and rules made thereunder, in this regard, from time to time.
(3) The independent directors of the listed entity shall hold at least one meeting in a year,
without the presence of non-independent directors and members of the management and
all the independent directors shall strive to be present at such meeting.
(4) The independent directors in the meeting referred in sub-regulation (3) shall, inter alia-
(a) review the performance of non-independent directors and the board of directors as a
whole;
(b) review the performance of the chairperson of the listed entity, taking into account the
views of executive directors and non-executive directors;
(c) assess the quality, quantity and timeliness of flow of information between the
management of the listed entity and the board of directors that is necessary for the
board of directors to effectively and reasonably perform their duties.
(5) An independent director shall be held liable, only in respect of such acts of omission or
commission by the listed entity which had occurred with his knowledge, attributable
57
w.e.f. 31.05.2018.
58
w.e.f. the date specified in the provision.
59
w.e.f. the date specified in the provision. Prior to the substitution, sub-regulation (1) read as follows:
“(1) A person shall not serve as an independent director in more than seven listed entities:
Provided that any person who is serving as a whole time director in any listed entity shall serve as an
independent director in not more than three listed entities.”
26
through processes of board of directors, and with his consent or connivance or where he
had not acted diligently with respect to the provisions contained in these regulations.
(6) An independent director who resigns or is removed from the board of directors of the
listed entity shall be replaced by a new independent director by listed entity at the earliest
but not later than the immediate next meeting of the board of directors or three months
from the date of such vacancy, whichever is later:
Provided that where the listed entity fulfils the requirement of independent directors in its
board of directors without filling the vacancy created by such resignation or removal, the
requirement of replacement by a new independent director shall not apply.
(7) The listed entity shall familiarise the independent directors through various programmes
about the listed entity, including the following:
(a) nature of the industry in which the listed entity operates;
(b) business model of the listed entity;
(c) roles, rights, responsibilities of independent directors; and
(d) any other relevant information.
60
[(8) Every independent director shall, at the first meeting of the board in which he
participates as a director and thereafter at the first meeting of the board in every financial year
or whenever there is any change in the circumstances which may affect his status as an
independent director, submit a declaration that he meets the criteria of independence as
provided in clause (b) of sub-regulation (1) of regulation 16 and that he is not aware of any
circumstance or situation, which exist or may be reasonably anticipated, that could impair or
impact his ability to discharge his duties with an objective independent judgment and without
any external influence.
(9) The board of directors of the listed entity shall take on record the declaration and
confirmation submitted by the independent director under sub-regulation (8) after undertaking
due assessment of the veracity of the same.
(10) With effect from October 1, 2018, the top 500 listed entities by market capitalization
calculated as on March 31 of the preceding financial year, shall undertake Directors and
Officers insurance (‘D and O insurance’) for all their independent directors of such quantum
and for such risks as may be determined by its board of directors.]
61[Obligations with respect to employees including senior management, key managerial
persons, directors and promoters.]
26. (1) A director shall not be a member in more than ten committees or act as chairperson
of more than five committees across all listed entities in which he is a director which
shall be determined as follows:
(a) the limit of the committees on which a director may serve in all public limited
companies, whether listed or not, shall be included and all other companies
including private limited companies, foreign companies and companies under
Section 8 of the Companies Act, 2013 shall be excluded;
60
Inserted ibid w.e.f. 1.4.2019 or the date specified in the provisions.
61
Substituted by SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations,
2016, w.e.f. 04.01.2017. Prior to substitution, the title read as follows-
“Obligations with respect to directors and senior management”
27
(b) for the purpose of determination of limit, chairpersonship and membership of the
audit committee and the Stakeholders' Relationship Committee alone shall be
considered.
(2) Every director shall inform the listed entity about the committee positions he or she
occupies in other listed entities and notify changes as and when they take place.
(3) All members of the board of directors and senior management personnel shall affirm
compliance with the code of conduct of board of directors and senior management on an
annual basis.
(4) Non-executive directors shall disclose their shareholding, held either by them or on a
beneficial basis for any other persons in the listed entity in which they are proposed to be
appointed as directors, in the notice to the general meeting called for appointment of such
director.
(5) Senior management shall make disclosures to the board of directors relating to all
material, financial and commercial transactions, where they have personal interest that
may have a potential conflict with the interest of the listed entity at large.
Explanation.- For the purpose of this sub-regulation, conflict of interest relates to dealing
in the shares of listed entity, commercial dealings with bodies, which have shareholding
of management and their relatives etc.
62
[(6) No employee including key managerial personnel or director or promoter of a listed
entity shall enter into any agreement for himself or on behalf of any other person, with
any shareholder or any other third party with regard to compensation or profit sharing in
connection with dealings in the securities of such listed entity, unless prior approval for
the same has been obtained from the Board of Directors as well as public shareholders by
way of an ordinary resolution:
Provided that such agreement, if any, whether subsisting or expired, entered during the
preceding three years from the date of coming into force of this sub-regulation, shall be
disclosed to the stock exchanges for public dissemination:
Provided further that subsisting agreement, if any, as on the date of coming into force of
this sub-regulation shall be placed for approval before the Board of Directors in the
forthcoming Board meeting:
Provided further that if the Board of Directors approve such agreement, the same shall be
placed before the public shareholders for approval by way of an ordinary resolution in the
forthcoming general meeting:
Provided further that all interested persons involved in the transaction covered under the
agreement shall abstain from voting in the general meeting.
Explanation - For the purposes of this sub-regulation, ‘interested person’ shall mean any
person holding voting rights in the listed entity and who is in any manner, whether
directly or indirectly, interested in an agreement or proposed agreement, entered into or to
62
w.e.f. 04.01.2017.
28
be entered into by such a person or by any employee or key managerial personnel or
director or promoter of such listed entity with any shareholder or any other third party
with respect to compensation or profit sharing in connection with the securities of such
listed entity.]
Other corporate governance requirements.

27. (1) The listed entity may, at its discretion, comply with requirements as specified in
Part E of Schedule II.
(2) (a) The listed entity shall submit a quarterly compliance report on corporate governance
in the format as specified by the Board from time to time to the recognised stock
exchange(s) within fifteen days from close of the quarter.
(b) Details of all material transactions with related parties shall be disclosed along with
the report mentioned in clause (a) of sub-regulation (2).
(c) The report mentioned in clause (a) of sub-regulation (2) shall be signed either by the
compliance officer or the chief executive officer of the listed entity.
In-principle approval of recognized stock exchange(s).

28. (1) The listed entity, before issuing securities, shall obtain an ‘in-principle’ approval
from recognised stock exchange(s) in the following manner:
(a) where the securities are listed only on recognised stock exchange(s) having
nationwide trading terminals, from all such stock exchange(s);
(b) where the securities are not listed on any recognised stock exchange having
nationwide trading terminals, from all the stock exchange(s) in which the securities
of the issuer are proposed to be listed;
(c) where the securities are listed on recognised stock exchange(s) having nationwide
trading terminals as well as on the recognised stock exchange(s) not having
nationwide trading terminals, from all recognised stock exchange(s) having
nationwide trading terminals:
(2) The requirement of obtaining in-principle approval from recognised stock exchange(s),
shall not be applicable for securities issued pursuant to the scheme of arrangement for
which the listed entity has already obtained No-Objection Letter from recognised stock
exchange(s) in accordance with regulation 37.
Prior Intimations.
29. (1) The listed entity shall give prior intimation to stock exchange about the meeting of
the board of directors in which any of the following proposals is due to be considered:
(a) financial results viz. quarterly, half yearly, or annual, as the case may be;
(b)proposal for buyback of securities;
(c) proposal for voluntary delisting by the listed entity from the stock exchange(s);
29
(d)fund raising by way of further public offer, rights issue, American Depository
Receipts/Global Depository Receipts/Foreign Currency Convertible Bonds,
qualified institutions placement, debt issue, preferential issue or any other method
and for determination of issue price:
Provided that intimation shall also be given in case of any annual general meeting or
extraordinary general meeting or postal ballot that is proposed to be held for obtaining
shareholder approval for further fund raising indicating type of issuance.
(e) declaration/ recommendation of dividend, issue of convertible securities including

convertible debentures or of debentures carrying a right to subscribe to equity
shares or the passing over of dividend.
(f) the proposal for declaration of bonus securities where such proposal is
communicated to the board of directors of the listed entity as part of the agenda
papers:
63
[***]
(2) The intimation required under sub-regulation (1), shall be given at least two working
days in advance, excluding the date of the intimation and date of the meeting:
Provided that intimation regarding item specified in clause (a) of sub-regulation (1), to
be discussed at the meeting of board of directors shall be given at least five days in
advance (excluding the date of the intimation and date of the meeting), and such
intimation shall include the date of such meeting of board of directors.
(3) The listed entity shall give intimation to the stock exchange(s) at least eleven working
days before any of the following proposal is placed before the board of directors -
(a) any alteration in the form or nature of any of its securities that are listed on the
stock exchange or in the rights or privileges of the holders thereof.
(b)any alteration in the date on which, the interest on debentures or bonds, or the
redemption amount of redeemable shares or of debentures or bonds, shall be
payable.
Disclosure of events or information.

30. (1) Every listed entity shall make disclosures of any events or information which, in
the opinion of the board of directors of the listed company, is material.
(2) Events specified in Para A of Part A of Schedule III are deemed to be material
events and listed entity shall make disclosure of such events.
63
Omitted by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018,
w.e.f. 1.10.2018. Prior to the omission, the proviso read as follows:
“Provided that in case the declaration of bonus by the listed entity is not on the agenda of the meeting of board
of directors, prior intimation is not required to be given to the stock exchange(s).”
30
(3) The listed entity shall make disclosure of events specified in Para B of Part A of
Schedule III, based on application of the guidelines for materiality, as specified in
sub-regulation (4).
(4) (i) The listed entity shall consider the following criteria for determination of
materiality of events/ information:
(a)the omission of an event or information, which is likely to result in
discontinuity or alteration of event or information already available
publicly; or
(b)the omission of an event or information is likely to result in significant
market reaction if the said omission came to light at a later date;
(c)In case where the criteria specified in sub-clauses (a) and (b) are not
applicable, an event/information may be treated as being material if in the
opinion of the board of directors of listed entity, the event / information is
considered material.
(ii) The listed entity shall frame a policy for determination of materiality, based
on criteria specified in this sub-regulation, duly approved by its board of
directors, which shall be disclosed on its website.
(5) The board of directors of the listed entity shall authorize one or more Key
Managerial Personnel for the purpose of determining materiality of an event or
information and for the purpose of making disclosures to stock exchange(s) under
this regulation and the contact details of such personnel shall be also disclosed to
the stock exchange(s) and as well as on the listed entity's website.
(6) The listed entity shall first disclose to stock exchange(s) of all events, as
specified in Part A of Schedule III, or information as soon as reasonably possible
and not later than twenty four hours from the occurrence of event or information:
Provided that in case the disclosure is made after twenty four hours of occurrence
of the event or information, the listed entity shall, along with such disclosures
provide explanation for delay:
Provided further that disclosure with respect to events specified in sub-para 4 of
Para A of Part A of Schedule III shall be made within thirty minutes of the
conclusion of the board meeting.
(7) The listed entity shall, with respect to disclosures referred to in this regulation,
make disclosures updating material developments on a regular basis, till such time
the event is resolved/closed, with relevant explanations.
(8) The listed entity shall disclose on its website all such events or information
which has been disclosed to stock exchange(s) under this regulation , and su ch
disclosures shall be hosted on the website of the listed entity for a minimum period
of five years and thereafter as per the archival policy of the listed entity, as
disclosed on its website.
(9) The listed entity shall disclose all events or information with respect to
subsidiaries which are material for the listed entity.
31
(10) The listed entity shall provide specific and adequate reply to all queries raised
by stock exchange(s) with respect to any events or information:
Provided that the stock exchange(s) shall disseminate information and clarification
as soon as reasonably practicable.
(11) The listed entity may on its own initiative also, confirm or deny any reported
event or information to stock exchange(s).
(12) In case where an event occurs or an information is available with the listed
entity, which has not been indicated in Para A or B of Part A of Schedule III, but
which may have material effect on it, the listed entity is required to make adequate
disclosures in regard thereof.
Holding of specified securities and shareholding pattern.

31. (1) The listed entity shall submit to the stock exchange(s) a statement showing holding
of securities and shareholding pattern separately for each class of securities, in the
format specified by the Board from time to time within the following timelines -
(a) one day prior to listing of its securities on the stock exchange(s);
(b) on a quarterly basis, within twenty one days from the end of each quarter; and,
(c) within ten days of any capital restructuring of the listed entity resulting in a
change exceeding two per cent of the total paid-up share capital:
Provided that in case of listed entities which have listed their specified securities on SME
Exchange, the above statements shall be submitted on a half yearly basis within twenty
one days from the end of each half year.
(2) The listed entity shall ensure that hundred percent of shareholding of promoter(s) and
promoter group is in dematerialized form and the same is maintained on a continuous
basis in the manner as specified by the Board.
(3) The listed entity shall comply with circulars or directions issued by the Board from time
to time with respect to maintenance of shareholding in dematerialized form.
64
[(4) All entities falling under promoter and promoter group shall be disclosed separately in
the shareholding pattern appearing on the website of all stock exchanges having
nationwide trading terminals where the specified securities of the entity are listed, in
accordance with the formats specified by the Board.]
65[Conditions for re-classification of any person as promoter / public
64
w.e.f. 16.11.2018
65
Substituted by SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations,
2018, w.e.f. 16.11.2018. Prior to this, the regulations read as:
“Disclosure of Class of shareholders and Conditions for Reclassification.
31A. (1) All entities falling under promoter and promoter group shall be disclosed separately in the shareholding
pattern appearing on the website of all stock exchanges having nationwide trading terminals where the
specified securities of the entity are listed, in accordance with the formats specified by SEBI.
(2) The stock exchange, specified in sub-regulation (1), shall allow modification or reclassification of the
status of the shareholders, only upon receipt of a request from the concerned listed entity or the concerned
32
shareholders along with all relevant evidence and on being satisfied with the compliance of conditions
mentioned in this regulation.
(3) In case of entities listed on more than one stock exchange, the concerned stock exchanges shall jointly
decide on the application of the entity/ shareholders, as specified in sub-regulation(2).
(4) In case of transmission/succession/inheritance, the inheritor shall be classified as promoter.
(5) When a new promoter replaces the previous promoter subsequent to an open offer or in any other
manner, re-classification may be permitted subject to approval of shareholders in the general meeting and
compliance of the following conditions:
(a) Such promoter along with the promoter group and the Persons Acting in Concert shall not hold more
than ten per cent of the paid-up equity capital of the entity.
(b) Such promoter shall not continue to have any special rights through formal or informal arrangements.
All shareholding agreements granting special rights to such entities shall be terminated.
(c) Such promoters and their relatives shall not act as key managerial person for a period of more than three
years from the date of shareholders’ approval:
Provided that the resolution of the said shareholders' meeting must specifically grant approval for such
promoter to act as key managerial person.
(6) Where an entity becomes professionally managed and does not have any identifiable promoter the
existing promoters may be re-classified as public shareholders subject to approval of the shareholders in a
general meeting.
Explanation.- For the purposes of this sub-regulation an entity may be considered as professionally
managed, if-
(i) No person or group along with persons acting in concert taken together shall hold more than one
per cent paid-up equity capital of the entity including any holding of convertibles/outstanding
warrants/ Depository Receipts:
Provided that any mutual fund, bank, insurance company, financial institution, foreign portfolio
investor may individually hold up to ten per cent paid-up equity capital of the entity including any
holding of convertibles/outstanding warrants/Depository Receipts.
(ii) The promoters seeking reclassification and their relatives may act as key managerial personnel in
the entity only subject to shareholders’ approval and for a period not exceeding three years from
the date of shareholders’ approval.
(iii) The promoter seeking reclassification along with his promoter group entities and the persons acting
in concert shall not have any special right through formal or informal arrangements. All
shareholding agreements granting special rights to such outgoing entities shall be terminated.
(7) Without prejudice to sub-regulations (5) and (6), re-classification of promoter as public shareholders
shall be subject to the following conditions:
(a) Such promoter shall not, directly or indirectly, exercise control, over the affairs of the entity.
(b) Increase in the level of public shareholding pursuant to re-classification of promoter shall not be
counted towards achieving compliance with minimum public shareholding requirement under rule
19A of the Securities Contracts (Regulation) Rules, 1957, and the provisions of these regulations.
(c) The event of re-classification shall be disclosed to the stock exchanges as a material event in
accordance with the provisions of these regulations.
(d) Board may relax any condition for re-classification in specific cases, if it is satisfied about non-
exercise of control by the outgoing promoter or its persons acting in concert.
(8) If any public shareholder seeks to re-classify itself as promoter, it shall be required to make an open
offer in accordance with the provisions of SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011.
(9) The provisions of sub-regulations (5), (6) and clause (b) of sub regulation (7) of this regulation shall not
apply, if re-classification of existing promoter or promoter group of the listed entity is as per the resolution
plan approved under section 31 of the Insolvency Code, subject to the following conditions:
33
31A. (1) For the purpose of this regulation:
(a) “promoter(s) seeking re-classification” shall mean all such promoters/persons
belonging to the promoter group seeking re-classification of status as public.
(b) “persons related to the promoter(s) seeking re-classification” shall mean such
persons with respect to that promoter(s) seeking re-classification who fall
under sub-clauses (ii), (iii) and (iv) of clause (pp) of sub-regulation (1) of
regulation 2 of Securities and Exchange Board of India (Issue of Capital and
(2) Re-classification of the status of any person as a promoter or public shall be

permitted by the stock exchanges only upon receipt of an application from the
listed entity along with all relevant documents subject to compliance with
conditions specified in these regulations;
Provided that in case of entities listed on more than one stock exchange, the
concerned stock exchanges shall jointly decide on the application.
(3) Re-classification of status of a promoter/ person belonging to promoter group to

public shall be permitted by the stock exchanges only upon satisfaction of the
following conditions:
(a) an application for re-classification to the stock exchanges has been made by
the listed entity consequent to the following procedures and not later than
thirty days from the date of approval by shareholders in general meeting:
(i) the promoter(s) seeking re-classification shall make a request for re-
classification to the listed entity which shall include rationale for
seeking such re-classification and how the conditions specified in
clause (b) below are satisfied;
(ii) the board of directors of the listed entity shall analyze the request
and place the same before the shareholders in a general meeting for
approval along with the views of the board of directors on the
request:
Provided that there shall be a time gap of at least three months but
not exceeding six months between the date of board meeting and the
shareholder’s meeting considering the request of the promoter(s)
seeking re-classification.
(iii) the request of the promoter(s) seeking re-classification shall be
approved in the general meeting by an ordinary resolution in which
the promoter(s) seeking re-classification and persons related to the
promoter(s) seeking re-classification shall not vote to approve such
re-classification request.
(b) the promoter(s) seeking re-classification and persons related to the

promoter(s) seeking re-classification shall not:
(i) together, hold more than ten percent of the total voting rights in the
listed entity;
(ii) exercise control over the affairs of the listed entity directly or
indirectly;
(i) the existing promoter and promoter group seeking re-classification shall not remain in control of
the listed entity; and
(ii) such re-classification along with the underlying rationale shall be disclosed to the stock
exchanges within one day of the resolution plan being approved.
34
(iii) have any special rights with respect to the listed entity through
formal or informal arrangements including through any shareholder
agreements;
(iv) be represented on the board of directors (including not having a
nominee director) of the listed entity;
(v) act as a key managerial person in the listed entity;
(vi) be a ‘wilful defaulter’ as per the Reserve Bank of India Guidelines;
(vii) be a fugitive economic offender.
(c) the listed entity shall:

(i) be compliant with the requirement for minimum public shareholding
as required under regulation 38 of these regulations;
(ii) not have trading in its shares suspended by the stock exchanges;
(iii) not have any outstanding dues to the Board, the stock exchanges or
the depositories.
(4) The promoter(s) seeking re-classification, subsequent to re-classification as public,

shall comply with the following conditions:
(a) he shall continue to comply with conditions mentioned at sub-clauses (i),
(ii) and (iii) of clause (b) of sub-regulation 3 as specified above at all times
from the date of such re-classification failing which, he shall automatically
be reclassified as promoter/ persons belonging to promoter group, as
applicable;
(b) he shall comply with conditions mentioned at sub-clauses (iv) and (v) of
clause (b) of sub-regulation 3 for a period of not less than three years from
the date of such re-classification failing which, he shall automatically be
reclassified as promoter/ persons belonging to promoter group, as
applicable.
(5) If any public shareholder seeks to re-classify itself as promoter, it shall be required
to make an open offer in accordance with the provisions of Securities and
Regulations, 2011.
(6) In case of transmission, succession, inheritance and gift of shares held by a

promoter/ person belonging to the promoter group:
(a) immediately on such event, the recipient of such shares shall be classified as
a promoter/ person belonging to the promoter group, as applicable.
(b) subsequently, in case the recipient classified as a promoter/person belonging
to the promoter group proposes to seek re-classification of status as public, it
may do so subject to compliance with conditions specified in sub-regulation
(3) above.
(c) in case of death of a promoter/person belonging to the promoter group, such
person shall automatically cease to be included as a promoter/person
belonging to the promoter group.
(7) A listed entity shall be considered as ‘listed entity with no promoters’ if due to re-
classification or otherwise, the entity does not have any promoter;
35
(8) The following events shall deemed to be material events and shall be disclosed by
the listed entity to the stock exchanges as soon as reasonably possible and not later
than twenty four hours from the occurrence of the event:
(a) receipt of request for re-classification by the listed entity from the
promoter(s) seeking re-classification;
(b) minutes of the board meeting considering such request which would include
the views of the board on the request;
(c) submission of application for re-classification of status as promoter/public by
the listed entity to the stock exchanges;
(d) decision of the stock exchanges on such application as communicated to the
listed entity;
(9) The provisions of sub-regulations 3, 4 and clauses (a) and (b) of sub-regulation 8 of
this regulation shall not apply, if re-classification of promoter(s)/ promoter group of
the listed entity is as per the resolution plan approved under section 31 of the
Insolvency Code, subject to the condition that such promoter(s) seeking re-
classification shall not remain in control of the listed entity.]
Statement of deviation(s) or variation(s).

32. (1) The listed entity shall submit to the stock exchange the following statement(s) on a
quarterly basis for public issue, rights issue, preferential issue etc. ,-
(a) indicating deviations, if any, in the use of proceeds from the objects stated in the
offer document or explanatory statement to the notice for the general meeting, as
applicable;
(b)indicating category wise variation (capital expenditure, sales and marketing,
working capital etc.) between projected utilisation of funds made by it in its offer
document or explanatory statement to the notice for the general meeting, as
applicable and the actual utilisation of funds.
(2) The statement(s) specified in sub-regulation (1), shall be continued to be given till such
time the issue proceeds have been fully utilised or the purpose for which these proceeds
were raised has been achieved.
(3) The statement(s) specified in sub-regulation (1), shall be placed before the audit
committee for review and after such review, shall be submitted to the stock exchange(s).
(4) The listed entity shall furnish an explanation for the variation specified in sub-regulation
(1), in the directors’ report in the annual report.
(5) The listed entity shall prepare an annual statement of funds utilized for purposes other
than those stated in the offer document/prospectus/notice, certified by the statutory
auditors of the listed entity, and place it before the audit committee till such time the full
money raised through the issue has been fully utilized.
(6) Where the listed entity has appointed a monitoring agency to monitor utilisation of
proceeds of a public or rights issue, the listed entity shall submit to the stock exchange(s)
any comments or report received from the monitoring agency.
36
(7) Where the listed entity has appointed a monitoring agency to monitor the utilisation of
proceeds of a public or rights issue, the monitoring report of such agency shall be placed
before the audit committee on an annual basis, promptly upon its receipt.
Explanation.- For the purpose of this sub-regulation, “monitoring agency” shall mean
the monitoring agency specified in regulation 16 of the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009.
66
[(7A) Where an entity has raised funds through preferential allotment or qualified
institutions placement, the listed entity shall disclose every year, the utilization of such funds
during that year in its Annual Report until such funds are fully utilized.]
(8) For the purpose of this regulation, any reference to “quarterly/quarter” in case of listed
entity which have listed their specified securities on SME Exchange shall respectively be
read as “half yearly/half year”.
Financial results.
33. (1) While preparing financial results, the listed entity shall comply with the following:
(a) The financial results shall be prepared on the basis of accrual accounting policy
and shall be in accordance with uniform accounting practices adopted for all the
periods.
(b) The quarterly and year to date results shall be prepared in accordance with the
recognition and measurement principles laid down in Accounting Standard 25 or
Indian Accounting Standard 31 (AS 25/ Ind AS 34 – Interim Financial
Reporting), as applicable, specified in Section 133 of the Companies Act, 2013
read with relevant rules framed thereunder or as specified by the Institute of
Chartered Accountants of India, whichever is applicable.
(c) The standalone financial results and consolidated financial results shall be
prepared as per Generally Accepted Accounting Principles in India:
Provided that in addition to the above, the listed entity may also submit the
financial results, as per the International Financial Reporting Standards notified by
the International Accounting Standards Board.
(d) The listed entity shall ensure that the limited review or audit reports submitted to
the stock exchange(s) on a quarterly or annual basis are to be given only by an
auditor who has subjected himself to the peer review process of Institute of
Chartered Accountants of India and holds a valid certificate issued by the Peer
Review Board of the Institute of Chartered Accountants of India.
(e) The listed entity shall make the disclosures specified in Part A of Schedule IV.
(2)The approval and authentication of the financial results shall be done by listed entity in the
following manner:
66
w.e.f. 1.4.2019.
37
(a) The quarterly financial results submitted shall be approved by the board of
directors:
Provided that while placing the financial results before the board of directors, the
chief executive officer and chief financial officer of the listed entity shall certify
that the financial results do not contain any false or misleading statement or
figures and do not omit any material fact which may make the statements or
figures contained therein misleading.
(b) The financial results submitted to the stock exchange shall be signed by the
chairperson or managing director, or a whole time director or in the absence of all
of them; it shall be signed by any other director of the listed entity who is duly
authorized by the board of directors to sign the financial results.
(c) The limited review report shall be placed before the board of directors, at its
meeting which approves the financial results, before being submitted to the stock
exchange(s).
(d) The annual audited financial results shall be approved by the board of directors of
the listed entity and shall be signed in the manner specified in clause (b) of sub-
regulation (2).
(3) The listed entity shall submit the financial results in the following manner:
(a) The listed entity shall submit quarterly and year-to-date standalone financial
results to the stock exchange within forty-five days of end of each quarter, other
than the last quarter.
(b) In case the listed entity has subsidiaries, in addition to the requirement at clause
(a) of sub-regulation (3), the listed entity 67 [shall] also submit quarterly/year-to-
date consolidated financial results 68[.]
69
[***]
(c) The quarterly and year-to-date financial results may be either audited or unaudited
subject to the following:
(i) In case the listed entity opts to submit unaudited financial results, they shall
be subject to limited review by the statutory auditors of the listed entity and
shall be accompanied by the limited review report.
67
Substituted for the word “may” by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
68
Substituted ibid for the words “subject to following:”
69
Sub-clauses (i) and (ii) omitted by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2018, w.e.f. 1.4.2019. Prior to the omission, the said sub-clauses read as follows:
“(i) the listed entity shall intimate to the stock exchange, whether or not listed entity opts to additionally submit
quarterly/year-to-date consolidated financial results in the first quarter of the financial year and this option
shall not be changed during the financial year.
Provided that this option shall also be applicable to listed entity that is required to prepare consolidated
financial results for the first time at the end of a financial year in respect of the quarter during the financial year
in which the listed entity first acquires the subsidiary.
(ii) in case the listed entity changes its option in any subsequent year, it shall furnish comparable figures for the
previous year in accordance with the option exercised for the current financial year.”
38
Provided that in case of public sector undertakings this limited review may
be undertaken by any practicing Chartered Accountant.
(ii) In case the listed entity opts to submit audited financial results, they shall be
accompanied by the audit report.
(d) The listed entity shall submit [annual]70 audited standalone financial results for the
financial year, within sixty days from the end of the financial year along with the audit
report and [Statement on Impact of Audit Qualifications (applicable only]71 for audit
report with modified opinion):
Provided that if the listed entity has subsidiaries, it shall, while submitting annual
audited standalone financial results also submit annual audited consolidated
financial results along with the audit report and [Statement on Impact of Audit
Qualifications (applicable only]72 for audit report with modified opinion)[:]73
[Provided further that, in case of audit reports with unmodified opinion(s), the
listed entity shall furnish a declaration to that effect to the Stock Exchange(s) while
publishing the annual audited financial results.]74
(e) The listed entity shall also submit the audited 75[or limited reviewed] financial
results in respect of the last quarter along-with the results for the entire financial
year, with a note stating that the figures of last quarter are the balancing figures
between audited figures in respect of the full financial year and the published year-
to-date figures upto the third quarter of the current financial year.
(f) The listed entity shall also submit as part of its standalone or consolidated
financial results for the half year, by way of a note, a statement of assets and
liabilities as at the end of the half-year.
76
[(g) The listed entity shall also submit as part of its standalone and consolidated
financial results for the half year, by way of a note, statement of cash flows for the
half-year.
(h) The listed entity shall ensure that, for the purposes of quarterly consolidated
financial results, at least eighty percent of each of the consolidated revenue, assets and
profits, respectively, shall have been subject to audit or in case of unaudited results,
subjected to limited review.
70
Inserted by SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2016, w.e.f.
01.04.2016.
71
Substituted for ‘either Form A (for audit report with unmodified opinion) or Form B (’ by SEBI (Listing
Obligations and Disclosure Requirements) (Amendment) Regulations, 2016, w.e.f. 01.04.2016
72
Substituted for ‘either Form A (for audit report with unmodified opinion) or Form B (’ by SEBI (Listing
Obligations and Disclosure Requirements) (Amendment) Regulations, 2016, w.e.f. 01.04.2016
73
Substituted for the symbol ‘.’ by SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2016, w.e.f. 01.04.2016.
74
01.04.2016.
75
w.e.f. 1.4.2019.
76
Inserted ibid.
39
(i) The listed entity shall disclose, in the results for the last quarter in the financial
year, by way of a note, the aggregate effect of material adjustments made in the results
of that quarter which pertain to earlier periods.]
(4) The applicable formats of the financial results and [Statement on Impact of Audit
Qualifications (for audit report with modified opinion)]77 shall be in the manner as
specified by the Board [***]78.
(5) For the purpose of this regulation, any reference to “quarterly/quarter” in case of listed
entity which has listed their specified securities on SME Exchange shall be respectively
read as “half yearly/half year” and the requirement of submitting ‘year-to-date’ financial
results shall not be applicable for a listed entity which has listed their specified securities
on SME Exchange.
(6) The [Statement on Impact of Audit Qualifications (for audit report with modified
opinion)]79 and the accompanying annual audit report submitted in terms of clause (d)
of sub-regulation (3) shall be reviewed by the stock exchange(s) [***]80.
(7) [***]81
82
[(8) The statutory auditor of a listed entity shall undertake a limited review of the audit of
all the entities/ companies whose accounts are to be consolidated with the listed entity as per
AS 21 in accordance with guidelines issued by the Board on this matter.]
Annual Report.
34. 83[(1) The listed entity shall submit to the stock exchange and publish on its website-
(a) a copy of the annual report sent to the shareholders along with the notice of the
annual general meeting not later than the day of commencement of dispatch to its
shareholders;
77
Substituted for ‘Form A (for audit report with unmodified opinion) & Form B (for audit report with modified
opinion)’ by SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2016, w.e.f.
01.04.2016
78
The words ‘from time to time’ omitted by SEBI (Listing Obligations and Disclosure Requirements)
(Amendment) Regulations, 2016, w.e.f. 01.04.2016.
79
Substituted for ‘Form B’ by SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2016, w.e.f. 01.04.2016
80
The words ‘and Qualified Audit Report Review Committee in manner as specified in Schedule VIII’ omitted
by SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2016, w.e.f.
01.04.2016.
81
Omitted by SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2016, w.e.f.
01.04.2016. Prior to omission, sub regulation (7) read as follows:
‘(7) The listed entity shall on the direction issued by the Board, carry out the necessary steps, for rectification of
modified opinion and/or submission of revised pro-forma financial results, in the manner specified in Schedule
VIII.’
82
w.e.f. 1.4.2019.
83
Substituted ibid, and applicable for Annual report filed for the year ended March 31, 2019 and thereafter. Prior
to the substitution, sub-regulation (1) read as follows:
“(1) The listed entity shall submit the annual report to the stock exchange within twenty one working days of it
being approved and adopted in the annual general meeting as per the provisions of the Companies Act, 2013.”
40
(b) in the event of any changes to the annual report, the revised copy along with the
details of and explanation for the changes shall be sent not later than 48 hours after the
annual general meeting.]
(2) The annual report shall contain the following:

(a) audited financial statements i.e. balance sheets, profit and loss accounts etc [,and
Statement on Impact of Audit Qualifications as stipulated in regulation 33(3)(d),
if applicable;]84
(b) consolidated financial statements audited by its statutory auditors;
(c) cash flow statement presented only under the indirect method as prescribed in
Accounting Standard-3 or Indian Accounting Standard 7, as applicable, specified
in Section 133 of the Companies Act, 2013 read with relevant rules framed
thereunder or as specified by the Institute of Chartered Accountants of India,
whichever is applicable;
(d) directors report;
(e) management discussion and analysis report - either as a part of directors report or
addition thereto;
(f) for the top 85 [one thousand] listed entities based on market capitalization
(calculated as on March 31 of every financial year), business responsibility report
describing the initiatives taken by them from an environmental, social and
governance perspective, in the format as specified by the Board from time to
time:
Provided that listed entities other than top 86 [one thousand] listed companies
based on market capitalization and listed entities which have listed their specified
securities on SME Exchange, may include these business responsibility reports on
a voluntary basis in the format as specified.
(3) The annual report shall contain any other disclosures specified in Companies Act, 2013
along with other requirements as specified in Schedule V of these regulations.
Annual Information Memorandum.

35. The listed entity shall submit to the stock exchange(s) an Annual Information
Memorandum in the manner specified by the Board from time to time.
Documents & Information to shareholders.

36. (1) The listed entity shall send the annual report in the following manner to the
shareholders:
(a) Soft copies of full annual report to all those shareholder(s) who have registered
their email address(es) 87 [***] 88 [either with the listed entity or with any
depository];
84
Substituted for the symbol ‘;’ by SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2016, w.e.f. 01.04.2016.
85
Substituted for “five hundred” by the SEBI (Listing Obligations and Disclosure Requirements) (Fifth
Amendment) Regulations, 2019, w.e.f. 26.12.2019.
86
Substituted for “five hundred” by the SEBI (Listing Obligations and Disclosure Requirements) (Fifth
Amendment) Regulations, 2019, w.e.f. 26.12.2019.
87
Words “for the purpose” omitted by the SEBI (Listing Obligations and Disclosure Requirements)
88
Inserted ibid, applicable for Annual report filed for the year ended March 31, 2019 and thereafter.
41
(b) Hard copy of statement containing the salient features of all the documents, as
prescribed in Section 136 of Companies Act, 2013 or rules made thereunder to
those shareholder(s) who have not so registered;
(c) Hard copies of full annual reports to those shareholders, who request for the same.
(2) The listed entity shall send annual report referred to in sub-regulation (1), to the holders of
securities, not less than twenty-one days before the annual general meeting.
(3) In case of the appointment of a new director or re-appointment of a director the

shareholders must be provided with the following information:
(a) a brief resume of the director;
(b) nature of his expertise in specific functional areas;
(c) disclosure of relationships between directors inter-se;
(d) names of listed entities in which the person also holds the directorship and the
membership of Committees of the board; and
(e) shareholding of non-executive directors.
89
[(4) The disclosures made by the listed entity with immediate effect from date of
notification of these amendments-
(a) to the stock exchanges shall be in XBRL format in accordance with the guidelines
specified by the stock exchanges from time to time; and
(b) to the stock exchanges and on its website, shall be in a format that allows users to find
relevant information easily through a searching tool:
Provided that the requirement to make disclosures in searchable formats shall not apply in
case there is a statutory requirement to make such disclosures in formats which may not be
searchable, such as copies of scanned documents.
(5) The notice being sent to shareholders for an annual general meeting, where the statutory
auditor(s) is/are proposed to be appointed/re-appointed shall include the following disclosures
as a part of the explanatory statement to the notice:
(a) Proposed fees payable to the statutory auditor(s) along with terms of
appointment and in case of a new auditor, any material change in the fee
payable to such auditor from that paid to the outgoing auditor along with the
rationale for such change;
(b) Basis of recommendation for appointment including the details in relation to

and credentials of the statutory auditor(s) proposed to be appointed.]
Draft Scheme of Arrangement & Scheme of Arrangement.

37. (1)Without prejudice to provisions of regulation 11, the listed entity desirous of
undertaking a scheme of arrangement or involved in a scheme of arrangement, shall
file the draft scheme of arrangement, proposed to be filed before any Court or Tribunal
under sections 391-394 and 101 of the Companies Act, 1956 or under Sections 230-
234 and Section 66 of Companies Act, 2013, whichever applicable, 90[along with a
89
w.e.f. 1.4.2019.
90
Inserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, w.e.f.
6.3.2017.
42
non-refundable fee as specified in Schedule XI,] with the stock exchange(s) for
obtaining Observation Letter or No-objection letter, before filing such scheme with
any Court or Tribunal, in terms of requirements specified by the Board or stock
exchange(s) from time to time.
(2)The listed entity shall not file any scheme of arrangement under sections 391-394 and
101 of the Companies Act, 1956 or under Sections 230-234 and Section 66 of
Companies Act, 2013 ,whichever applicable, with any Court or Tribunal unless it has
obtained observation letter or No-objection letter from the stock exchange(s).
(3)The listed entity shall place the Observation letter or No-objection letter of the stock
exchange(s) before the Court or Tribunal at the time of seeking approval of the
scheme of arrangement:
Provided that the validity of the ‘Observation Letter’ or No-objection letter of stock
exchanges shall be six months from the date of issuance, within which the draft
scheme of arrangement shall be submitted to the Court or Tribunal.
(4)The listed entity shall ensure compliance with the other requirements as may be
prescribed by the Board from time to time.
(5)Upon sanction of the Scheme by the Court or Tribunal, the listed entity shall submit
the documents, to the stock exchange(s), as prescribed by the Board and/or stock
exchange(s) from time to time.
91
[(6) Nothing contained in this regulation shall apply to draft schemes which solely provide
for merger of a wholly owned subsidiary with its holding company:
Provided that such draft schemes shall be filed with the stock exchanges for the
purpose of disclosures.]
[(7) The requirements as specified under this regulation and under regulation 94 of
these regulations shall not apply to a restructuring proposal approved as part of a
resolution plan by the Tribunal under section 31 of the Insolvency Code, subject to the
details being disclosed to the recognized stock exchanges within one day of the
resolution plan being approved.]92
Minimum Public Shareholding.

38. The listed entity shall comply with the minimum public shareholding requirements
specified in Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules,
1957 in the manner as specified by the Board from time to time:
Provided that provisions of this regulation shall not apply to entities listed on
institutional trading platform without making a public issue.
Issuance of Certificates or Receipts/Letters/Advices for securities and dealing with

unclaimed securities.
39. (1) The listed entity shall comply with Rule 19(3) of Securities Contract (Regulations)
Rules, 1957 in respect of Letter/Advices of Allotment, Acceptance or Rights, transfers,
91
Inserted by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
92
w.e.f. 31.05.2018.
43
subdivision, consolidation, renewal, exchanges, issuance of duplicates thereof or any
other purpose.
(2)The listed entity shall issue certificates or receipts or advices, as applicable, of subdivision,
split, consolidation, renewal, exchanges, endorsements, issuance of duplicates thereof or
issuance of new certificates or receipts or advices, as applicable, in cases of loss or old
decrepit or worn out certificates or receipts or advices, as applicable within a period of
thirty days from the date of such lodgement.
(3)The listed entity shall submit information regarding loss of share certificates and issue of
the duplicate certificates, to the stock exchange within two days of its getting information.
(4)The listed entity shall comply with the procedural requirements specified in Schedule VI
while dealing with securities issued pursuant to the public issue or any other issue,
physical or otherwise, which remain unclaimed and/or are lying in the escrow account, as
applicable.
Transfer or transmission or transposition of securities.

40. (1) Save as otherwise specified in provisions of securities laws or Companies Act,
2013 and rules made thereunder, the listed entity shall also comply with the
requirements as specified in this regulation for effecting transfer of securities [:]93
[Provided that, except in case of transmission or transposition of securities, requests for
effecting transfer of securities shall not be processed unless the securities are held in
the dematerialized form with a depository.]94
(2)The board of directors of a listed entity may delegate the power of transfer of securities to
a committee or to compliance officer or to the registrar to an issue and/or share transfer
agent(s):
Provided that the board of directors and/or the delegated authority shall attend to the
formalities pertaining to transfer of securities at least once in a fortnight:
Provided further that the delegated authority shall report on transfer of securities to the
board of directors in each meeting.
(3)On receipt of proper documentation, the listed entity shall register transfers of its securities
in the name of the transferee(s) and issue certificates or receipts or advices, as applicable,
of transfers; or issue any valid objection or intimation to the transferee or transferor, as the
case may be, within a period of fifteen days from the date of such receipt of request for
transfer:
Provided that the listed entity shall ensure that transmission requests are processed for
securities held in dematerialized mode and physical mode within seven days and twenty
one days respectively, after receipt of the specified documents:
Provided further that proper verifiable dated records of all correspondence with the
investor shall be maintained by the listed entity.
93
Symbol ‘.’substituted by the SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment)
Regulations, 2018, w.e.f. 08.06.2018.
94
Inserted by SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2018,
w.e.f. 08.06.2018.
44
(4)The listed entity shall not register transfer when any statutory prohibition or any
attachment or prohibitory order of a competent authority restrains it from transferring
the securities from the name of the transferor(s).
(5)The listed entity shall not register the transfer of its securities in the name of the
transferee(s) when the transferor(s) objects to the transfer:
Provided that the transferor serves on the listed entity, within sixty working days of raising
the objection, a prohibitory order of a Court of competent jurisdiction.
(6)The listed entity shall not decline to, register or acknowledge any transfer of shares, on the
ground of the transferor(s) being either alone or jointly with any other person or persons
indebted to the listed entity on any account whatsoever.
(7)The listed entity shall comply with all procedural requirements as specified in Schedule
VII with respect to transfer of securities.
(8)In case the listed entity has not effected transfer of securities within fifteen days or where
the listed entity has failed to communicate to the transferee(s) any valid objection to the
transfer, within the stipulated time period of fifteen days, the listed entity shall
compensate the aggrieved party for the opportunity losses caused during the period of the
delay:
Provided that during the intervening period on account of delay in transfer above, the listed
entity shall provide all benefits, which have accrued, to the holder of securities in terms of
provisions of Section 126 of Companies Act, 2013, and Section 27 of the Securities
Contracts (Regulation) Act, 1956:
Provided further that in case of any claim, difference or dispute under this sub-regulation
the same shall be referred to and decided by arbitration as provided in the bye-laws and/or
regulations of the stock exchange(s).
(9) The listed entity shall ensure that the share transfer agent and/or the in-house share
transfer facility, as the case may be, produces a certificate from a practicing company
secretary within one month of the end of each half of the financial year, certifying that all
certificates have been issued within thirty days of the date of lodgement for transfer, sub-
division, consolidation, renewal, exchange or endorsement of calls/allotment monies.
(10) The listed entity shall ensure that certificate mentioned at sub-regulation (9), shall be
filed with the stock exchange(s) simultaneously.
(11) In addition to transfer of securities, the provisions of this regulation shall also apply to
the following :
(a) deletion of name of the deceased holder(s) of securities, where the securities are
held in the name of two or more holders of securities ;
(b)transmission of securities to the legal heir(s), where deceased holder of securities
was the sole holder of securities;
(c) transposition of securities, when there is a change in the order of names in which
physical securities are held jointly in the names of two or more holders of securities.
45
Other provisions relating to securities.
41. (1) The listed entity shall not exercise a lien on its fully paid shares and that in respect
of partly paid shares it shall not exercise any lien except in respect of moneys called or
payable at a fixed time in respect of such shares.
(2)The listed entity shall, in case of any amount to be paid in advance of calls on any shares
stipulate that such amount may carry interest but shall not in respect thereof confer a right
to dividend or to participate in profits.
95
[(3) The listed entity shall not issue shares in any manner that may confer on any person;
superior or inferior rights as to dividend vis-à-vis the rights on equity shares that are
already listed or inferior voting rights vis-à-vis the rights on equity shares that are already
listed:
Provided that, a listed entity having SR equity shares issued to its promoters/ founders,
may issue SR equity shares to its SR shareholders only through a bonus, split or rights
issue in accordance with the provisions of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2018 and the Companies Act,
2013.]
(4)The listed entity shall, issue or offer in the first instance all shares (including forfeited
shares), securities, rights, privileges and benefits to subscribe pro rata basis , to the equity
shareholders of the listed entity, unless the shareholders in the general meeting decide
otherwise.
(5)Unless the terms of issue otherwise provide, the listed entity shall not select any of its
listed securities for redemption otherwise than on pro-rata basis or by lot.
96
[Other provisions relating to outstanding SR equity shares.
41A (1) The SR equity shares shall be treated at par with the ordinary equity shares in every
respect, including dividends, except in the case of voting on resolutions.
(2) The total voting rights of SR shareholders (including ordinary shares) in the issuer upon
listing, pursuant to an initial public offer, shall not at any point of time exceed seventy four
per cent.
(3) The SR equity shares shall be treated as ordinary equity shares in terms of voting rights
(i.e. one SR share shall only have one vote) in the following circumstances -
i. appointment or removal of independent directors and/or auditor;
ii. where a promoter is willingly transferring control to another entity;
iii. related party transactions in terms of these regulations involving an SR
shareholder;
iv. voluntary winding up of the listed entity;
v. changes to the Articles of Association or Memorandum of Association of the
listed entity, except any change affecting the SR equity share;
vi. initiation of a voluntary resolution process under the Insolvency Code;
95
Substituted by the SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment)
Regulations, 2019, w.e.f. 29.7.2019. Prior to its substitution, sub-regulation (3) read as follows,-
“(3) The listed entity shall not issue shares in any manner which may confer on any person, superior rights as to
voting or dividend vis-à-vis the rights on equity shares that are already listed.”
96
2019, w.e.f. 29.7.2019.
46
vii. utilization of funds for purposes other than business;
viii. substantial value transaction based on materiality threshold as specified under
these regulations;
ix. passing of special resolution in respect of delisting or buy-back of shares; and
x. other circumstances or subject matter as may be specified by the Board, from
time to time.
(4) The SR equity shares shall be converted into equity shares having voting rights same as
that of ordinary shares on the fifth anniversary of listing of ordinary shares of the listed entity:
Provided that the SR equity shares may be valid for upto an additional five years, after a
resolution to that effect has been passed, where the SR shareholders have not been permitted
to vote:
Provided further that the SR shareholders may convert their SR equity shares into ordinary
equity shares at any time prior to the period as specified in this sub-regulation.
(5) The SR equity shares shall be compulsorily converted into equity shares having voting
rights same as that of ordinary shares on the occurrence of any of the following events -
i. demise of the promoter(s) or founder holding such shares;
ii. an SR shareholder resigns from the executive position in the listed entity;
iii. merger or acquisition of the listed entity having SR shareholder/s, where the
control would no longer remain with the SR shareholder/s;
iv. the SR equity shares are sold by an SR shareholder who continues to hold such
shares after the lock-in period but prior to the lapse of validity of such SR
equity shares.]
Record Date or Date of closure of transfer books.

42. (1) The listed entity shall intimate the record date 97[for the following events to all the
stock exchange(s) where it is listed or where stock derivatives are available on the
stock of the listed entity or where listed entity’s stock form part of an index on which
derivatives are available:]
(a) declaration of dividend;
(b)issue of right or bonus shares;
(c) issue of shares for conversion of debentures or any other convertible security;
(d)shares arising out of rights attached to debentures or any other convertible security
(e) 98[corporate actions like mergers, de-mergers, splits, etc;]
(f) such other purposes as may be specified by the stock exchange(s).
(2)The listed entity shall give notice in advance of atleast seven working days (excluding the
date of intimation and the record date) to stock exchange(s) of record date specifying
the purpose of the record date:
99
[Provided that in the case of rights issues, the listed entity shall give notice in advance of
atleast three working days (excluding the date of intimation and the record date).]
97
Substituted by the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment)
Regulations, 2020, w.e.f. 05.08.2020. Prior to its substitution, sub-regulation (1) read as follows,-
“The listed entity shall intimate the record date to all the stock exchange(s) where it is listed for the following
purposes:”
98
Substituted by the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment)
Regulations, 2020, w.e.f. 05.08.2020. Prior to its substitution, clause (e) read as follows,-
“corporate actions like mergers, de-mergers, splits and bonus shares, where stock derivatives are available on the
stock of listed entity or where listed entity's stocks form part of an index on which derivatives are available;”
47
(3)The listed entity shall recommend or declare all dividend and/or cash bonuses at least five
working days (excluding the date of intimation and the record date) before the record
date fixed for the purpose.
(4)The listed entity shall ensure the time gap of at least thirty days between two record dates.
(5)For securities held in physical form, the listed entity may, announce dates of closure of its
transfer books in place of record date for complying with requirements as specified in sub-
regulations (1) to (4):
Provided that the listed entity shall ensure that there is a time gap of atleast thirty days
between two dates of closure of its transfer books.
Dividends.
43. (1) The listed entity shall declare and disclose the dividend on per share basis only.
(2) The listed entity shall not forfeit unclaimed dividends before the claim becomes barred by
law and such forfeiture, if effected, shall be annulled in appropriate cases.
100[Dividend Distribution Policy.
43A (1) The top five hundred listed entities based on market capitalization (calculated as on
March 31 of every financial year) shall formulate a dividend distribution policy which shall
be disclosed in their annual reports and on their websites.
(2) The dividend distribution policy shall include the following parameters:
(a) the circumstances under which the shareholders of the listed entities may or may not
expect dividend;
(b) the financial parameters that shall be considered while declaring dividend;
(c) internal and external factors that shall be considered for declaration of dividend;
(d) policy as to how the retained earnings shall be utilized; and
(e) parameters that shall be adopted with regard to various classes of shares:
Provided that if the listed entity proposes to declare dividend on the basis of parameters in
addition to clauses (a) to (e) or proposes to change such additional parameters or the dividend
distribution policy contained in any of the parameters, it shall disclose such changes along
with the rationale for the same in its annual report and on its website.
(3) The listed entities other than top five hundred listed entities based on market capitalization
may disclose their dividend distribution policies on a voluntary basis in their annual reports
and on their websites.]
101[Meetings of shareholders and voting].
44. (1) The listed entity shall provide the facility of remote e-voting facility to its
shareholders, in respect of all shareholders' resolutions.
99
2019, w.e.f. 26.12.2019.
100
Inserted by SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations,
2016, w.e.f. 08.07.2016.
101
Substituted for “Voting by shareholders” by the SEBI (Listing Obligations and Disclosure Requirements)
48
(2)The e-voting facility to be provided to shareholders in terms of sub-regulation (1), shall be
provided in compliance with the conditions specified under the Companies (Management and
Administration) Rules, 2014, or amendments made thereto.
(3)The listed entity shall submit to the stock exchange, within forty eight hours of conclusion
of its General Meeting, details regarding the voting results in the format specified by the
Board.
(4)The listed entity shall send proxy forms to holders of securities in all cases mentioning that
a holder may vote either for or against each resolution.
102
[(5) The top 100 listed entities by market capitalization, determined as on March 31st of
every financial year, shall hold their annual general meetings within a period of five months
from the date of closing of the financial year.
(6) The top 100 listed entities shall provide one-way live webcast of the proceedings of the
annual general meetings.
Explanation: The top 100 entities shall be determined on the basis of market capitalisation, as
at the end of the immediate previous financial year.]
Change in name of the listed entity.

45. (1) The listed entity shall be allowed to change its name subject to compliance with
the following conditions:
(a) a time period of at least one year has elapsed from the last name change;
(b)at least fifty percent. of the total revenue in the preceding one year period has been
accounted for by the new activity suggested by the new name; or
(c) the amount invested in the new activity/project is atleast fifty percent. of the assets
of the listed entity:
Provided that if any listed entity has changed its activities which are not reflected in its name,
it shall change its name in line with its activities within a period of six months from the
change of activities in compliance of provisions as applicable to change of name prescribed
under Companies Act, 2013.
Explanation.- For the purpose of this regulation, -

(i) 'assets' of the listed entity means the sum of fixed assets, advances, works in
Progress / Inventories, investments, trade receivables, cash & cash equivalents;
(ii) ‘advances’ shall include only those amounts extended to contractors and
suppliers towards execution of project, specific to new activity as reflected in the
new name.
(2) On satisfaction of conditions at sub-regulation (1), the listed entity shall file an application for
name availability with Registrar of Companies.
(3) On receipt of confirmation regarding name availability from Registrar of Companies, before
filing the request for change of name with the Registrar of Companies in terms of provisions
laid down in Companies Act, 2013 and rules made thereunder, the listed entity shall seek
102
Inserted ibid.
49
approval from Stock Exchange by submitting a certificate from chartered accountant stating
compliance with conditions at sub-regulation (1).
Website.
46. (1) The listed entity shall maintain a functional website containing the basic
information about the listed entity.
(2) The listed entity shall disseminate the following information 103[under a separate section
on its website]:
(a) details of its business;
(b) terms and conditions of appointment of independent directors;
(c) composition of various committees of board of directors;
(d) code of conduct of board of directors and senior management personnel;
(e) details of establishment of vigil mechanism/ Whistle Blower policy;
(f) criteria of making payments to non-executive directors , if the same has not been
disclosed in annual report;
(g) policy on dealing with related party transactions;
(h) policy for determining ‘material’ subsidiaries;
(i) details of familiarization programmes imparted to independent directors including
the following details:-
(i) number of programmes attended by independent directors (during the year and
on a cumulative basis till date),
(ii) number of hours spent by independent directors in such programmes (during
the year and on cumulative basis till date), and
(iii) other relevant details
(j) the email address for grievance redressal and other relevant details;
(k) contact information of the designated officials of the listed entity who are
responsible for assisting and handling investor grievances;
(l) financial information including:
(i) notice of meeting of the board of directors where financial results shall be
discussed;
(ii) financial results, on conclusion of the meeting of the board of directors where
the financial results were approved;
(iii) complete copy of the annual report including balance sheet, profit and loss
account, directors report, corporate governance report etc;
(m) shareholding pattern;
(n) details of agreements entered into with the media companies and/or their
associates, etc;
(o) schedule of analyst or institutional investor meet and presentations made by the
listed entity to analysts or institutional investors simultaneously with submission to
stock exchange;
(p) new name and the old name of the listed entity for a continuous period of one year,
from the date of the last name change;
(q) items in sub-regulation (1) of regulation 47 .
104
[(r) With effect from October 1, 2018, all credit ratings obtained by the entity for all
its outstanding instruments, updated immediately as and when there is any revision in
any of the ratings.
Substituted for the words “on its website” by the SEBI (Listing Obligations and Disclosure Requirements)
103
50
(s) separate audited financial statements of each subsidiary of the listed entity in
respect of a relevant financial year, uploaded at least 21 days prior to the date of the
annual general meeting which has been called to inter alia consider accounts of that
financial year.]
(3) (a) The listed entity shall ensure that the contents of the website are correct.
(b) The listed entity shall update any change in the content of its website within two
working days from the date of such change in content.
Advertisements in Newspapers.
47. (1) The listed entity shall publish the following information in the newspaper:
(a) notice of meeting of the board of directors where financial results shall be
discussed
(b) financial results, as specified in regulation 33, along-with the modified opinion(s)
or reservation(s), if any, expressed by the auditor:
Provided that if the listed entity has submitted both standalone and consolidated
financial results, the listed entity shall publish consolidated financial results along-
with (1) Turnover, (2) Profit before tax and (3) Profit after tax, on a stand-alone
basis, as a foot note; and a reference to the places, such as the website of listed
entity and stock exchange(s), where the standalone results of the listed entity are
available.
(c) statements of deviation(s) or variation(s) as specified in sub-regulation (1) of
regulation 32 on quarterly basis, after review by audit committee and its
explanation in directors report in annual report;
(d) notices given to shareholders by advertisement.
(2)The listed entity shall give a reference in the newspaper publication, in sub-regulation (1),
to link of the website of listed entity and stock exchange(s), where further details are
available.
(3)The listed entity shall publish the information specified in sub-regulation (1) in the
newspaper simultaneously with the submission of the same to the stock exchange(s).
Provided that financial results at clause (b) of sub-regulation (1), shall be published within
48 hours of conclusion of the meeting of board of directors at which the financial results
were approved.
(4)The information at sub-regulation (1) shall be published in at least one English language
national daily newspaper circulating in the whole or substantially the whole of India and in
one daily newspaper published in the language of the region, where the registered office of
the listed entity is situated:
Provided that the requirements of this regulation shall not be applicable in case of listed
entities which have listed their specified securities on SME Exchange.
104
w.e.f. the date specified.
51
Accounting Standards.
48. The listed entity shall comply with all the applicable and notified Accounting
Standards from time to time.
52
CHAPTER V
OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS NON-
CONVERTIBLE DEBT SECURITIES OR NON-CONVERTIBLE REDEEMABLE
PREFERENCE SHARES OR BOTH
Applicability.
49. (1) The provisions of this chapter shall apply only to a listed entity which has listed its
‘Non-convertible Debt Securities’ and/or ‘Non-Convertible Redeemable Preference
Shares’ on a recognised stock exchange in accordance with Securities and Exchange
Board of India (Issue and Listing of Debt Securities) Regulations, 2008 or Securities
and Exchange Board of India (Issue and Listing of Non-Convertible Redeemable
Preference Shares) Regulations, 2013 respectively.
(2)The provisions of this chapter shall also be applicable to “perpetual debt instrument” and
"perpetual non-cumulative preference share” listed by banks.
Explanation (1).- For the purpose of this chapter, “Bank" means any bank included in the
Second Schedule to the Reserve Bank of India Act, 1934.
Explanation (2).- For the purpose of this chapter, if the listed entity has listed its non-
convertible redeemable preference shares:
(i) The reference to “interest” may also read as dividend;
(ii) The provisions concerning debenture trustees and security creation (or asset cover
or charge on assets) shall not be applicable for “non-convertible redeemable
preference shares”
Intimation to stock exchange(s).

50. (1) The listed entity shall give prior intimation to the stock exchange(s) at least eleven
working days before the date on and from which the interest on debentures and bonds,
and redemption amount of redeemable shares or of debentures and bonds shall be
payable.
(2) The listed entity shall intimate the stock exchange(s), its intention to raise funds through
new non-convertible debt securities or non-convertible redeemable preference shares it
proposes to list either through a public issue or on private placement basis, prior to
issuance of such securities:
Provided that the above intimation may be given prior to the meeting of board of directors
wherein the proposal to raise funds through new non convertible debt securities or non-
convertible redeemable preference shares shall be considered.
(3) The listed entity shall intimate to the stock exchange(s), at least two working days in
advance, excluding the date of the intimation and date of the meeting, regarding the
meeting of its board of directors, at which the recommendation or declaration of issue of
non convertible debt securities or any other matter affecting the rights or interests of
holders of non convertible debt securities or non convertible redeemable preference shares
is proposed to be considered.
53
Disclosure of information having bearing on performance/operation of listed entity
and/or price sensitive information.
51. (1) The listed entity shall promptly inform the stock exchange(s) of all information
having bearing on the performance/operation of the listed entity, price sensitive
information or any action that shall affect payment of interest or dividend of non-
convertible preference shares or redemption of non convertible debt securities or
redeemable preference shares.
Explanation.- The expression ‘promptly inform’, shall imply that the stock exchange must be
informed as soon as practically possible and without any delay and that the information shall
be given first to the stock exchange(s) before providing the same to any third party.
(2) Without prejudice to the generality of sub-regulation(1), the listed entity who has issued
or is issuing non-convertible debt securities and/or non-convertible redeemable preference
shares shall make disclosures as specified in Part B of Schedule III.
Financial Results.
52. (1)The listed entity shall prepare and submit un-audited or audited financial results on
a half yearly basis in the format as specified by the Board within forty five days from the end
of the half year to the recognised stock exchange(s).
105
[Provided that in case of entities which have listed their equity shares and debt securities, a
copy of the financial results submitted to stock exchanges shall be provided to Debenture
Trustees on the same day the information is submitted to stock exchanges.]
(2) The listed entity shall comply with following requirements with respect to preparation,
approval, authentication and publication of annual and half-yearly financial results:
(a) Un-audited financial results shall be accompanied by limited review report

prepared by the statutory auditors of the listed entity or in case of public sector
undertakings, by any practising Chartered Accountant, in the format as specified by
the Board:
Provided that if the listed entity intimates in advance to the stock exchange(s) that
it shall submit to the stock exchange(s) its annual audited results within sixty days
from the end of the financial year, un-audited financial results for the last half year
accompanied by limited review report by the auditors need not be submitted to
stock exchange(s).
(b)Half-yearly results shall be taken on record by the board of directors and signed by
the managing director / executive director.
(c) The audited results for the year shall be submitted to the recognised stock
exchange(s) in the same format as is applicable for half-yearly financial results.
(d)If the listed entity opts to submit un-audited financial results for the last half year
accompanied by limited review report by the auditors, it shall also submit audited
financial results for the entire financial year, as soon as they are approved by the
board of directors.
105
Inserted by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
(Second Amendment) Regulations, 2019, w.e.f. May 07, 2019
54
(e) Modified opinion(s) in audit reports that have a bearing on the interest payment/
dividend payment pertaining to non-convertible redeemable debentures/ redemption
or principal repayment capacity of the listed entity shall be appropriately and
adequately addressed by the board of directors while publishing the accounts for the
said period.
(3) (a) The annual audited financial results shall be submitted along with the annual audit
report and [Statement on Impact of Audit Qualifications (applicable only] 106 for audit
report with modified opinion[)]107[;]108
[Provided that, in case of audit reports with unmodified opinion, the listed entity shall
furnish a declaration to that effect to the Stock Exchange(s) while publishing the annual
audited financial results.]109
(b)The [Statement on Impact of Audit Qualifications (for audit report with modified
opinion]110 and the accompanying annual audit report submitted in terms of clause (a)
shall be reviewed by the stock exchange(s) [***]111.
(c) [***]112
(d)The applicable [format]113 of [Statement on Impact of Audit Qualifications (for audit

report with modified opinion)]114 shall be [in the manner as]115 specified by the Board
[***]116.
(4) The listed entity, while submitting half yearly / annual financial results, shall disclose the
following line items along with the financial results:
106
Substituted for ‘either Form A for audit report with unmodified opinion, or Form B’ by SEBI (Listing
Obligations and Disclosure Requirements) (Amendment) Regulations, 2016, w.e.f. 01.04.2016.
107
01.04.2016.
108
Substituted for the symbol ‘.’ by SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2016, w.e.f. 01.04.2016.
109
01.04.2016.
110
Substituted for ‘Form B’ by SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2016, w.e.f. 01.04.2016.
111
The words ‘and the Qualified Audit Report Review Committee in the manner specified in Schedule VIII’
omitted by SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2016, w.e.f.
01.04.2016.
112
01.04.2016. Prior to omission, sub regulation (3) read as follows:
‘The listed entity shall on the direction issued by the Board, carry out the necessary steps, for rectification of
modified opinion and/or submission of revised pro-forma financial results, in the manner specified in Schedule
VIII’
113
Substituted for ‘formats’ by SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
Regulations, 2016, w.e.f. 01.04.2016
114
Substituted for ‘Form A and Form B’ by SEBI (Listing Obligations and Disclosure Requirements)
(Amendment) Regulations, 2016, w.e.f. 01.04.2016
115
01.04.2016.
116
The words ‘from time to time’ omitted by SEBI (Listing Obligations and Disclosure Requirements)
55
(a) credit rating and change in credit rating (if any);
(b) asset cover available, in case of non convertible debt securities;
(c) debt-equity ratio;
(d) previous due date for the payment of interest/ dividend for non-convertible
redeemable preference shares/ repayment of principal of non-convertible
preference shares /non convertible debt securities and whether the same has been
paid or not; and,
(e) next due date for the payment of interest/ dividend of non-convertible preference
shares /principal along with the amount of interest/ dividend of non-convertible
preference shares payable and the redemption amount;
(f) debt service coverage ratio;
(g) interest service coverage ratio;
(h) outstanding redeemable preference shares (quantity and value);
(i) capital redemption reserve/debenture redemption reserve;
(j) net worth;
(k) net profit after tax;
(l) earnings per share:
Provided that the requirement of disclosures of debt service coverage ratio, asset cover and
interest service coverage ratio shall not be applicable for banks or non banking financial
companies registered with the Reserve Bank of India.
Provided further that the requirement of this sub- regulation shall not be applicable in case
of unsecured debt instruments issued by regulated financial sector entities eligible for
meeting capital requirements as specified by respective regulators.
117
[(5) The listed entity shall, within seven working days from the date of submission of the
information required under sub- regulation (4), submit to stock exchange(s), a certificate
signed by debenture trustee that it has taken note of the contents.]
(6) The listed entity which has listed its non convertible redeemable preference shares shall
make the following additional disclosures as notes to financials:
(a) profit for the half year and cumulative profit for the year;
(b)free reserve as on the end of half year;
(c) securities premium account balance (if redemption of redeemable preference share
is to be done at a premium, such premium may be appropriated from securities
premium account):
Provided that disclosure on securities premium account balance may be provided
only in the year in which non convertible redeemable preference shares are due for
redemption;
(d) track record of dividend payment on non convertible redeemable preference shares:
Provided that in case the dividend has been deferred at any time, then the actual date
of payment shall be disclosed;
117
Substituted by the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) (Second Amendment) Regulations, 2019, w.e.f. May 07, 2019. Prior to the substitution, sub-
regulation (5) read as follows:
"(5) While submitting the information required under sub- regulation (4), the listed entity shall submit to stock
exchange(s), a certificate signed by debenture trustee that it has taken note of the contents."
56
(e) breach of any covenants under the terms of the non convertible redeemable
preference shares:
Provided that in case a listed entity is planning a fresh issuance of shares whose end
use is servicing of the non convertible redeemable preference shares (whether
dividend or principle redemption), then the same shall be disclosed whenever the
listed entity decided on such issuances.
(7) The listed entity shall submit to the stock exchange on a half yearly basis along with the
half yearly financial results, a statement indicating material deviations, if any, in the use of
proceeds of issue of non convertible debt securities and non-convertible redeemable
preference shares from the objects stated in the offer document.
(8) The listed entity shall, within two calendar days of the conclusion of the meeting of the
board of directors, publish the financial results and statement referred to in sub-regulation
(4), in at least one English national daily newspaper circulating in the whole or substantially
the whole of India.
Annual Report.
53. The annual report of the listed entity shall contain disclosures as specified in
Companies Act, 2013 along with the following:
(a) audited financial statements i.e. balance sheets, profit and loss accounts etc [, and
Statement on Impact of Audit Qualifications as stipulated in regulation 52(3)(a), if
applicable;]118
(b) cash flow statement presented only under the indirect method as prescribed in
Accounting Standard-3/ Indian Accounting Standard 7, mandated under Section
133 of the Companies Act, 2013 read with relevant rules framed thereunder or by
the Institute of Chartered Accountants of India, whichever is applicable;
(c) auditors report;
(d) directors report;
(e) name of the debenture trustees with full contact details ;
(f) related party disclosures as specified in Para A of Schedule V.
Asset Cover.
54. (1) In respect of its listed non-convertible debt securities, the listed entity shall
maintain hundred per cent. asset cover sufficient to discharge the principal amount at
all times for the non-convertible debt securities issued.
(2) The listed entity shall disclose to the stock exchange in quarterly, half-yearly, year-
to-date and annual financial statements, as applicable, the extent and nature of security
created and maintained with respect to its secured listed non-convertible debt
securities.
(3) The requirement specified in sub-regulation (1), shall not be applicable in case of
unsecured debt securities issued by regulated financial sector entities eligible for
meeting capital requirements as specified by respective regulators.
Credit Rating.
Substituted for the symbol ‘;’ by SEBI (Listing Obligations and Disclosure Requirements) (Amendment)
118
Regulations, 2016, w.e.f. 01.04.2016
57
55. Each rating obtained by the listed entity with respect to non-convertible debt securities
shall be reviewed at least once a year by a credit rating agency registered by the Board.
Documents and Intimation to Debenture Trustees.

56. (1) The listed entity shall forward the following to the debenture trustee promptly:
(a) a copy of the annual report at the same time as it is issued along with a copy of
certificate from the listed entity's auditors in respect of utilisation of funds during
the implementation period of the project for which the funds have been raised:
Provided that in the case of debentures or preference shares issued for financing
working capital or general corporate purposes or for capital raising purposes the
copy of the auditor's certificate may be submitted at the end of each financial year
till the funds have been fully utilised or the purpose for which these funds were
intended has been achieved.
(b) a copy of all notices, resolutions and circulars relating to-
(i) new issue of non convertible debt securities at the same time as they are sent
to shareholders/ holders of non convertible debt securities;
(ii) the meetings of holders of non-convertible debt securities at the same time as
they are sent to the holders of non convertible debt securities or advertised in
the media including those relating to proceedings of the meetings;
(c) intimations regarding :
(i) any revision in the rating;
(ii) any default in timely payment of interest or redemption or both in respect of
the non convertible debt securities;
(iii) failure to create charge on the assets;
(d) a half-yearly certificate regarding maintenance of hundred percent. asset cover in
respect of listed non convertible debt securities, by either a practicing company
secretary or a practicing chartered accountant, along with the half yearly financial
results:
Provided that submission of such half yearly certificates is not applicable in cases
where a listed entity is a bank or non banking financial companies registered with
Reserve Bank of India or where bonds are secured by a Government guarantee.
(2) The listed entity shall forward to the debenture trustee any such information sought and
provide access to relevant books of accounts as required by the debenture trustee.
(3) The listed entity may, subject to the consent of the debenture trustee, send the information
stipulated in sub-regulation (1), in electronic form/fax.
Other submissions to stock exchange(s).

57. (1) The listed entity shall submit a certificate to the stock exchange within two days of
the interest or principal or both becoming due that it has made timely payment of
interests or principal obligations or both in respect of the non convertible debt securities.
(2) The listed entity shall provide an undertaking to the stock exchange(s) on annual basis
stating that all documents and intimations required to be submitted to Debenture Trustees in
terms of Trust Deed and Securities and Exchange Board of India (Issue and Listing of Debt
Securities) Regulations, 2008 have been complied with.
(3) The listed entity shall forward to the stock exchange any other information in the manner
and format as specified by the Board from time to time.
58
Documents and information to holders of non - convertible debt securities and non-
convertible preference shares
58. (1) The listed entity shall send the following documents:
(a) Soft copies of full annual reports to all the holders of non convertible preference
share who have registered their email address(es) for the purpose;
(b) Hard copy of statement containing the salient features of all the documents, as
specified in Section 136 of Companies Act, 2013 and rules made thereunder to
those holders of non convertible preference share who have not so registered;
(c) Hard copies of full annual reports to those holders of non convertible debt
securities and non convertible preference share, who request for the same.
(d) Half yearly communication as specified in sub-regulation (4) and (5) of regulation
52, to holders of non convertible debt securities and non convertible preference
shares;
(2)The listed entity shall send the notice of all meetings of holders of non convertible debt
securities and holders of non-convertible redeemable preference shares specifically stating
that the provisions for appointment of proxy as mentioned in Section 105 of the
Companies Act, 2013, shall be applicable for such meeting.
(3)The listed entity shall send proxy forms to holders of non convertible debt securities and
non-convertible redeemable preference shares which shall be worded in such a manner that
holders of these securities may vote either for or against each resolution.
Structure of non convertible debt securities and non convertible redeemable preference
shares.
59. (1) The listed entity shall not make material modification without prior approval of the
stock exchange(s) where the non convertible debt securities or non-convertible
redeemable preference shares, as applicable, are listed, to :
(a) the structure of the debenture in terms of coupon, conversion, redemption, or
otherwise.
(b) the structure of the non-convertible redeemable preference shares in terms of
dividend of non-convertible preference shares payable, conversion, redemption,
or otherwise.
(2) The approval of the stock exchange referred to in sub-regulation (1) shall be made only
after:
(a) approval of the board of directors and the debenture trustee in case of non-
convertible debt securities and
(b) after complying with the provisions of Companies Act, 2013 including approval of
the consent of requisite majority of holders of that class of securities.
Record Date
60. (1) The listed entity shall fix a record date for purposes of payment of interest, dividend
and payment of redemption or repayment amount or for such other purposes as
specified by the stock exchange.
(2) The listed entity shall give notice in advance of at least seven working days (excluding
the date of intimation and the record date) to the recognised stock exchange(s) of the
59
record date or of as many days as the stock exchange(s) may agree to or require specifying
the purpose of the record date.
Terms of non convertible debt securities and non convertible redeemable preference
shares.
61. (1) The listed entity shall ensure timely payment of interest or dividend of non-
convertible redeemable preference shares or redemption payment:
Provided that the listed entity shall not declare or distribute any dividend wherein it has
defaulted in payment of interest on debt securities or redemption thereof or in creation of
security as per the terms of the issue of debt securities:
Provided further that this requirement shall not be applicable in case of unsecured debt
securities issued by regulated financial sector entities eligible for meeting capital requirements
as specified by respective regulators.
(2) The listed entity shall not forfeit unclaimed interest/dividend and such unclaimed
interest/dividend shall be transferred to the ‘Investor Education and Protection Fund’ set up
as per Section 125 of the Companies Act, 2013.
(3) Unless the terms of issue provide otherwise, the listed entity shall not select any of its listed
securities for redemption otherwise than pro rata basis or by lot.
(4) The listed entity shall comply with requirements as specified in regulation 40 for transfer
of securities including procedural requirements specified in Schedule VII.
Website.
62. (1) The listed entity shall maintain a functional website containing the following
information about the listed entity:-
(a)details of its business;
(b) financial information including complete copy of the annual report including
balance sheet, profit and loss account, directors report etc;
(c)contact information of the designated officials of the listed entity who are
responsible for assisting and handling investor grievances;
(d) email address for grievance redressal and other relevant details;
(e)name of the debenture trustees with full contact details;
(f) the information, report, notices, call letters, circulars, proceedings, etc concerning
non-convertible redeemable preference shares or non convertible debt securities;
(g) all information and reports including compliance reports filed by the listed
entity;
(h) information with respect to the following events:
(i) default by issuer to pay interest on or redemption amount;
(ii) failure to create a charge on the assets;
(iii) revision of rating assigned to the non convertible debt securities:
(2) The listed entity may also issue a press release with respect to the events specified in sub-
regulation (1).
(3) The listed entity shall ensure that the contents of the website are correct and updated at
any given point of time.
60
CHAPTER VI
OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS SPECIFIED
SECURITIES AND EITHER NON-CONVERTIBLE DEBT SECURITIES OR NON-
CONVERTBLE REDEEMABLE PREFERENCE SHARES OR BOTH
Applicability of Chapters IV and V.

63. (1) Entity which has listed its ‘specified securities’ and ‘non-convertible debt
securities’ or ‘non-convertible redeemable preference shares’ or both on any
recognised stock exchange, shall be bound by the provisions in Chapter IV of these
regulations.
(2) The listed entity described in sub-regulation (1) shall additionally comply with the
following regulations in Chapter V:
(a) regulation 50(2),(3);
(b) regulation 51;
(c) regulation 52(3), (4), (5) and (6);
(d) regulation 53
(e) regulation 54
(f) regulation 55
(g) regulation 56
(h) regulation 57
(i) regulation 58
(j) regulation 59
(k) regulation 60
(l) regulation 61:
Provided that the listed entity which has submitted any information to the stock exchange in
compliance with the disclosure requirements under Chapter IV of these regulations, need not
re-submit any such information under the provisions of this regulations without prejudice to
any power conferred on the Board or the stock exchange or any other authority under any law
to seek any such information from the listed entity:
Provided further that the listed entity, which has satisfied certain obligations in compliance
with other chapters, shall not separately satisfy the same conditions under this chapter.
Delisting.
64. (1) In the event specified securities of the listed entity are delisted from the stock
exchange, the listed entity shall comply with all the provisions in Chapter V of these
regulations.
(2) In the event that non-convertible debt securities and non-convertible redeemable
preference shares’ of the listed entity do not remain listed on the stock exchange, the listed
entity shall comply with all the provisions in Chapter IV of these regulations.
61
CHAPTER VII
OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS INDIAN
DEPOSITORY RECEIPTS
Applicability.
65. The provisions of this chapter shall apply to listed entity whose securities market
regulators are signatories to the Multilateral Memorandum of Understanding of
International Organization of Securities Commission issuing ‘Indian Depository
Receipts’ as defined under Rule 13 of the Companies (Registration of Foreign
Companies) Rules, 2014.
Definitions.
66. For the purpose of this chapter , unless the context otherwise requires -
(a) “IDR Holder(s)” shall mean holder(s) of Indian Depository Receipts.
(b)“Depository Agreement” shall mean an agreement between the listed entity and the
domestic depository
(c) “Home Country” or “country of origin” shall mean the country or parent country
where the listed entity is incorporated and listed.
(d)“Security holder” shall mean holder of the security or equity shares of the listed
entity in the home country.
General Obligations of listed entity.

67. (1) All correspondences filed with the stock exchange(s) and those sent to the IDR
Holders shall be in English.
(2) The listed entity shall comply, at all times, with the rules/regulations/laws of the country
of origin.
(3) The listed entity shall undertake that the competent Courts, Tribunals and regulatory
authorities in India shall have jurisdiction in the event of any dispute, either with the stock
exchange or any investor, concerning the India Depository Receipts offered or subscribed
or bought in India.
(4) The listed entity shall forward, on a continuous basis, any information requested by the
stock exchange, in the interest of investors from time to time.
(5) In case of any claim, difference or dispute under the provisions of this chapter and other
provisions of these regulations applicable to the listed entity, the same shall be referred to
and decided by arbitration as provided in the bye-laws and regulations of the stock
exchange(s).
Disclosure of material events or information.

68. (1) The listed entity shall promptly inform to the stock exchange(s) of all events which
are material, all information which is price sensitive and/or have bearing on
performance/operation of the listed entity.
(2) Without prejudice to the generality of sub-regulation (1), the listed entity shall make the
disclosures as specified in Part C of Schedule III.
62
Indian Depository Receipt holding pattern & Shareholding details.
69. (1) The listed entity shall file with the stock exchange the Indian Depository Receipt
holding pattern on a quarterly basis within fifteen days of end of the quarter in the
format specified by the Board.
(2) The listed entity shall file the following details with the stock exchange as is required to
be filed in compliance with the disclosure requirements of the listing authority or stock
exchange in its home country or any other jurisdiction where the securities of the listed
entity are listed:
(a) Shareholding Pattern;
(b)Pre and post arrangement share holding pattern and Capital Structure in case of any
corporate restructuring like mergers / amalgamations
Periodical Financial Results.

70. (1) The listed entity shall file periodical financial results with the stock exchange in
such manner and within such time and to the extent that it is required to file as per the
listing requirements of the home country.
(2) The listed entity shall comply with the requirements with respect to preparation and
disclosures in financial results as specified in Part B of Schedule IV.
Annual Report.
71. (1) The listed entity shall submit to stock exchange an annual report at the same time as
it is disclosed to the security holder in its home country or in other jurisdictions where
such securities are listed.
(2) The annual report shall contain the following:

(a) Report of board of directors;
(b)Balance Sheet;
(c) Profit and Loss Account;
(d)Auditors Report;
(e) All periodical and special reports( if applicable);
(f) Any such other report which is required to be sent to security holders annually.
(3) The listed entity shall comply with the requirements with respect to preparation and
disclosures in financial results in annual report as specified in Part B of Schedule IV.
Corporate Governance.
72. (1) The listed entity shall comply with the corporate governance provisions as
applicable in its home country and other jurisdictions in which its equity shares are
listed.
(2) The listed entity shall submit to stock exchange a comparative analysis of the corporate
governance provisions that are applicable in its home country and in the other jurisdictions
in which its equity shares are listed along with the compliance of the same vis-à-vis the
corporate governance requirements applicable under regulation 17 to regulation 27, to
other listed entities.
63
Documents and Information to IDR Holder.
73. The listed entity shall disclose/send the following documents to IDR Holders, at the
same time and to the extent that it discloses to security holders in its home country or
in other jurisdictions where its securities are listed:
(a) Soft copies of the annual report to all the IDR holders who have registered their
email address(es) for the purpose
(b)Hard copy of the annual report to those IDR holders who request for the same
either through domestic depository or Compliance Officer
(c) the pre and post arrangement capital structure and share holding pattern in case of
any corporate restructuring like mergers / amalgamations and other schemes
Equitable Treatment to IDR Holders.

74. (1)If the listed entity's equity shares or other securities representing equity shares are
also listed on the stock exchange(s) in countries other than its home country, it shall
ensure that IDR Holders are treated in a manner equitable with security holders in
home country.
(2) The listed entity shall ensure that for all corporate actions, except those which are not
permitted by Indian laws, it shall treat IDR holders in a manner equitable with security
holders in the home country.
(3) In case of take-over or delisting or buy-back of its equity shares, the listed entity shall,
while following the laws applicable in its home country, give equitable treatment to IDR
holders vis-à-vis security holder in home country.
(4) The listed entity shall ensure protection of interests of IDR holders particularly with
respect to all corporate benefits permissible under Indian laws and the laws of its home
country and shall address all investor grievances adequately.
Advertisements in Newspapers.
75. (1)The listed entity shall publish the following information in the newspaper :
(a) periodical financial results required to be disclosed;
(b) Notices given to its IDR Holders by advertisement;
(2)The information specified in sub-regulation (1) shall be issued in at one English national
daily newspaper circulating in the whole or substantially the whole of India and in one
Hindi national daily newspaper in India.
Terms of Indian Depository Receipts.

76. (1) The listed entity shall pay the dividend as per the timeframe applicable in its home
country or other jurisdictions where its securities are listed, whichever is earlier, so as
to reach the IDR Holders on or before the date fixed for payment of dividend to holders
of its equity share or other securities.
(2)The listed entity shall not forfeit unclaimed dividends before the claim becomes barred by
law in the home country of the listed entity, as may be applicable, and that such forfeiture,
when effected, shall be annulled in appropriate cases.
64
(3) The Indian Depository Receipts shall have two-way fungibility in the manner specified by
the Board from time to time.
Structure of Indian Depository Receipts.

77. (1) The listed entity shall ensure that the underlying shares of IDRs shall rank pari-
passu with the existing shares of the same class and the fact of having different classes
of shares based on different criteria, if any, shall be disclosed by the listed entity in the
annual report.
(2) The listed entity shall not exercise a lien on the fully paid underlying shares, against
which the IDRs are issued, and that in respect of partly paid underlying shares, against
which the IDRs are issued and shall also not exercise any lien except in respect of moneys
called or payable at a fixed time in respect of such underlying shares.
(3) The listed entity, subject to the requirements under the laws and regulations of its home
country, if any amount be paid up in advance of calls on any underlying shares against
which the IDRs are issued, shall stipulate that such amount may carry interest but shall not
in respect thereof confer a right to dividend or to participate in profits.
Record Date.
78. (1) The listed entity, where it is required so to do in its home country or other
jurisdictions where its securities may be listed, shall fix the record date for the purpose
of payment of dividends or distribution of any other corporate benefits to IDR Holders.
(2) The listed entity shall give notice in advance of at least four working days to the
recognised stock exchange(s) of record date specifying the purpose of the record date.
Voting.
79. (1) The listed entity shall, either directly or through an agent, send out proxy forms to
IDR Holders in all cases mentioning that a security holder may vote either for or
against each resolution.
(2) Voting rights of the IDR Holders shall be exercised in accordance with the depository
agreement.
Delisting of Indian Depository Receipt.

80. (1) The listed entity shall, if it decides to delist Indian Depository Receipts, give fair
and reasonable treatment to IDR holders.
(2)The listed entity shall comply with such norms and conditions for delisting Indian
Depository Receipts as specified by the Board or stock exchange in this regard.
(3) The listed entity shall, in case underlying equity shares are delisted, shall delist and cancel
the Indian Depository Receipts.
65
CHAPTER VIII
OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS SECURITISED
DEBT INSTRUMENTS
Applicability.
81. (1) The provisions of this chapter shall apply to Special Purpose Distinct Entity
issuing securitised debt instruments and trustees of Special Purpose Distinct Entity
shall ensure compliance with each of the provisions of these regulations.
(2) The expressions "asset pool", "clean up call option", "credit enhancement", "debt or
receivables", "investor", "liquidity provider", "obligor", "originator", "regulated activity",
"scheme", "securitization", "securitized debt instrument", "servicer", "special purpose distinct
entity", "sponsor" and "trustee" shall have the same meaning as assigned to them under
[Securities and Exchange Board of India (Issue and Listing of Securitised Debt Instruments
and Security Receipts) Regulations, 2008]119;
Intimation and filings with stock exchange(s).

82. (1) The listed entity shall intimate the Stock exchange, of its intention to issue new
securitized debt instruments either through a public issue or on private placement basis
(if it proposes to list such privately placed debt securities on the Stock exchange) prior
to issuing such securities.
(2)The listed entity shall intimate to the stock exchange(s), at least two working days in
advance, excluding the date of the intimation and date of the meeting, regarding the
meeting of its board of trustees, at which the recommendation or declaration of issue of
securitized debt instruments or any other matter affecting the rights or interests of holders
of securitized debt instruments is proposed to be considered.
(3)The listed entity shall submit such statements, reports or information including financial
information pertaining to Schemes to stock exchange within seven days from the end of
the month/ actual payment date, either by itself or through the servicer, on a monthly basis
in the format as specified by the Board from time to time:
Provided that where periodicity of the receivables is not monthly, reporting shall be made
for the relevant periods.
(4)The listed entity shall provide the stock exchange, either by itself or through the servicer,
loan level information, without disclosing particulars of individual borrowers, in manner
specified by stock exchange.
Disclosure of information having bearing on performance/operation of listed entity

and/or price sensitive information.
83. (1) The listed entity shall promptly inform the stock exchange(s) of all information
having bearing on the on performance/operation of the listed entity and price sensitive
information.
119
Substituted by the SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations,
Listing of Securitised Debt Instruments) Regulations, 2008”.
66
(2)Without prejudice to the generality of sub-regulation(1), the listed entity shall make the
disclosures specified in Part D of Schedule III.
Explanation.- The expression ‘promptly inform’, shall imply that the stock exchange must be
informed must as soon as practically possible and without any delay and that the information
shall be given first to the stock exchange(s) before providing the same to any third party.
Credit Rating.
84. (1) Every rating obtained by the listed entity with respect to securitised debt
instruments shall be periodically reviewed, preferably once a year, by a credit rating
agency registered by the Board.
(2) Any revision in rating(s) shall be disseminated by the stock exchange(s).
Information to Investors.
85. (1) The listed entity shall provide either by itself or through the servicer, loan level
information without disclosing particulars of individual borrower to its investors.
(2)The listed entity shall provide information regarding revision in rating as a result of credit
rating done periodically in terms of regulation 84 above to its investors.
(3)The information at sub-regulation (1) and (2) may be sent to investors in electronic
form/fax if so consented by the investors.
(4)The listed entity shall display the email address of the grievance redressal division and
other relevant details prominently on its website and in the various materials / pamphlets/
advertisement campaigns initiated by it for creating investor awareness.
Terms of Securitized Debt Instruments.

86. (1) The listed entity shall ensure that no material modification shall be made to the
structure of the securitized debt instruments in terms of coupon, conversion,
redemption, or otherwise without prior approval of the recognised stock exchange(s)
where the securitized debt instruments are listed and the listed entity shall make an
application to the recognised stock exchange(s) only after the approval by Trustees.
(2) The listed entity shall ensure timely interest/ redemption payment.
(3)The listed entity shall ensure that where credit enhancement has been provided for, it shall
make credit enhancement available for listed securitized debt instruments at all times.
(4)The listed entity shall not forfeit unclaimed interest and principal and such unclaimed
interest and principal shall be, after a period of seven years, transferred to the Investor
Protection and Education Fund established under the Securities and Exchange Board of
India (Investor Protection and Education Fund) Regulations, 2009.
(5)Unless the terms of issue provide otherwise, the listed entity shall not select any of its
listed securitized debt instruments for redemption otherwise than on pro rata basis or by lot
and shall promptly submit to the recognised stock exchange(s) the details thereof.
67
(6)The listed entity shall remain listed till the maturity or redemption of securitised debt
instruments or till the same are delisted as per the procedure laid down by the Board
Provided that the provisions of this sub-regulation shall not restrict the right of the
recognised stock exchange(s) to delist, suspend or remove the securities at any time and
for any reason which the recognised stock exchange(s) considers proper in accordance
with the applicable legal provisions.
Record Date.
87. (1) The listed entity shall fix a record date for payment of interest and payment of
redemption or repayment amount or for such other purposes as specified by the
recognised stock exchange(s).
(2) The listed entity shall give notice in advance of atleast seven working days (excluding
the date of intimation and the record date) to the recognised stock exchange(s) of the
record date or of as many days as the Stock Exchange may agree to or require specifying
the purpose of the record date.
120[CHAPTER
VIII A
OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS SECURITY
RECEIPTS
Applicability.
87A. (1) The provisions of this chapter shall apply to the issuer of security receipts which has
listed its security receipts and the issuer and its sponsor shall ensure compliance with
each of the provisions of these Regulations.
(2) The expressions “asset reconstruction company”, "investor", “issue”, “issuer”, “offer for
sale”, “private placement offer”, “qualified buyer”, "scheme", “security receipts”, "sponsor",
and “valuer” shall have the same meaning as assigned to them under Securities and Exchange
Board of India (Issue and Listing of Securitised Debt Instruments and Security Receipts)
Regulations, 2008.
Intimations and Disclosure of events or information to Stock Exchanges.

87B. (1) The listed entity shall first disclose to stock exchange(s) of all events or information,
as specified in Part E of Schedule III, as soon as reasonably possible but not later than
twenty four hours from occurrence of the event or information:
Provided that in case the disclosure is made after twenty four hours of occurrence of the event
or information, the listed entity shall, along with such disclosures provide explanation for the
delay.
(2) The listed entity with respect to disclosures referred to in this regulation, shall provide
updates related to such disclosures on a regular basis, till such time the event is
resolved/closed, with relevant explanations.
120
2018, w.e.f. 06.09.2018.
68
(3) The listed entity shall provide specific and adequate reply to all queries raised by stock
exchange(s) with respect to any events or information.
Provided that the stock exchange(s) shall disseminate information and clarification as soon as
reasonably practicable.
(4) The listed entity, suo moto, may confirm or deny any reported event or information to
stock exchange(s).
(5) The listed entity shall disclose on its website or on the website of the sponsor all such
events or information which has been disclosed to stock exchange(s) under this regulation,
and such disclosures shall be hosted on the website of the listed entity for a minimum period
of five years and thereafter as per the archival policy of the listed entity, as disclosed on its
website.
Valuation, Rating and NAV disclosure.

87C. (1) An issuer whose security receipts are listed on a stock exchange shall ensure that:
(i) the listed security receipts are valued at the end of each quarter i.e. as on March
31, June 30, September 30 and December 31 of every year;
(ii) valuation is conducted by an independent valuer; and
(iii) the net asset value is calculated on the basis of such independent valuation and the
same is declared by the asset reconstruction company within fifteen days of the
end of the quarter.
(2) The issuer shall also comply with the extant Reserve Bank of India requirement of
obtaining credit rating of security receipts at half yearly interval and declaration of the net
asset value thereafter and/or any other requirement as prescribed by the Reserve Bank of
India from time to time.
Provided that in those two quarters in a year, where both external valuation and credit rating
are required, issuer shall disclose lower of the two calculated Net Asset Value.
Terms of Security Receipts.

87D. (1) Any security receipt issued would be transferable only in favour of qualified buyers
in terms of Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002.
(2) Unless the terms of issue provide otherwise, the listed entity shall not select any of its
listed security receipts for payments otherwise than on pro rata basis or by lot and shall
promptly submit to the stock exchange(s) the details thereof.
Record Date.
87E. (1) The listed entity shall fix a record date for payment to holders of security receipts or
for such other purposes as specified by the stock exchange(s).
69
(2) The listed entity shall give notice in advance of at least seven working days (excluding the
date of intimation and the record date) to the stock exchange(s) of the record date or of as
many days as the stock exchange may agree to or require specifying the purpose of the record
date.]
CHAPTER IX
OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS MUTUAL FUND
UNITS
Applicability.
88. (1)The provisions of this chapter shall apply to the asset management company
managing the mutual fund scheme whose units are listed on the recognised stock
exchange(s).
(2) Notwithstanding anything contained in this chapter, the provisions of the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996 and directions issued
thereunder shall apply on the listed entity and to the schemes whose units are listed on the
recognised stock exchange(s).
Definitions.
89. The expressions "Asset Management Company", "Net Asset Value" , "Scheme" ,
"Unit" and "Unit Holder" shall have the same meaning as assigned to them under
Securities and Exchange Board of India (Mutual Funds) Regulations, 1996;
Submission of Documents.
90. (1) The listed entity shall intimate to the recognised stock exchange(s) the information
relating to daily Net Asset Value, monthly portfolio, half yearly portfolio of those
schemes whose units are listed on the recognised stock exchange(s) in the format as
specified under Securities and Exchange Board of India (Mutual Funds) Regulations,
1996 and directions issued there under.
(2) The listed entity shall intimate to the recognised stock exchange(s) in the manner
specified by the recognised stock exchange(s) of:
(a) movement in unit capital of those schemes whose units are listed on the recognised
stock exchange(s);
(b)rating of the scheme whose units are listed on the recognised stock exchange(s) and
any changes in the rating thereof (wherever applicable);
(c) imposition of penalties and material litigations against the listed entity and Mutual
Fund;
(d)any prohibitory orders restraining the listed entity from transferring units registered
in the name of the unit holders.
Dissemination on the website of stock exchange(s).

91. The listed entity shall submit such information and documents, which are required to
be disseminated on the listed entity’s website in terms of Securities and Exchange
Board of India (Mutual Funds) Regulations, 1996 and directions issued there under, to
the recognised stock exchange for dissemination.
70
CHAPTER X
DUTIES AND OBLIGATIONS OF THE RECOGNISED STOCK EXCHANGE(S)
Dissemination.
92. (1) Upon receipt of relevant intimations, information, filings, reports, statements,
documents or any other submissions in terms of these regulations, from the listed entity
the recognised stock exchange(s) shall immediately disseminate the same on its
website.
(2)The disseminations by the recognised stock exchange(s) as mentioned in sub-regulation

(1) shall be made in organised, user friendly and easily referable manner including by
providing hyperlinks for easy accessibility.
Transferability.
93. The recognised stock exchange(s) shall coordinate with Depositories to ensure
compliance with the applicable laws or directions of the Board or any competent court
with regard to freezing / unfreezing, lock-in/ release of lock-in with respect to
securities issued or managed by the listed entity.
Draft Scheme of Arrangement & Scheme of Arrangement.

94. (1) The designated stock exchange, upon receipt of draft schemes of arrangement and
the documents prescribed by the Board, as per sub-regulation (1) of regulation 37,
shall forward the same to the Board, in the manner prescribed by the Board.
(2) The stock exchange(s) shall submit to the Board its Objection Letter or No-
Objection Letter on the draft scheme of arrangement after inter-alia ascertaining
whether the draft scheme of arrangement is in compliance with securities laws
within thirty days of receipt of draft scheme of arrangement or within seven days
of date of receipt of satisfactory reply on clarifications from the listed entity and/or
opinion from independent chartered accountant, if any, sought by stock
exchange(s), as applicable.
(3)The stock exchange(s), shall issue Observation Letter or No-objection letter to the
listed entity within seven days of receipt of comments from the Board, after
suitably incorporating such comments in the Observation Letter or No-objection
letter:
Provided that the validity of the ‘Observation Letter’ or No-objection letter of stock
exchanges shall be six months from the date of issuance.
(4)The stock exchange(s) shall bring the observations or objections, as the case may
be, to the notice of Court or Tribunal at the time of approval of the scheme of
arrangement.
(5)Upon sanction of the Scheme by the Court or Tribunal, the designated stock
exchange shall forward its recommendations to the Board on the documents
submitted by the listed entity in terms of sub-regulation (5) of regulation 37.
71
[Statement on Impact of Audit Qualifications accompanying Annual Audit Report.
95. The recognised stock exchange(s) shall review the Statement on Impact of Audit
Qualifications and the accompanying annual audit report submitted in terms of clause
(d) of sub-regulation (3) of regulation 33 and clause (a) of sub-regulation (3) of
regulation 52.]121
Grievance Redressal.
96. The recognised stock exchange(s) shall redress/facilitate redressal of complaints of
holders of listed securities from time to time.
Monitoring of Compliance/Non Compliance & Adequacy/ Accuracy of the disclosures

97. (1) The recognised stock exchange(s) shall monitor compliance by the listed entity
with provisions of these regulations.
(2)The recognised stock exchange(s) shall also monitor adequacy/ accuracy of the disclosures
made by listed entity with respect to provisions of these regulations.
(3)The recognised stock exchange(s) shall submit a report to the Board, with respect to the
obligations specified in sub-regulations (1) and (2), in the manner specified by the Board.
(4)The recognised stock exchange(s) shall put in place appropriate framework including
adequate manpower and such infrastructure as may be required to comply with the
provisions of this regulation.
121
Substituted for ‘Form B accompanying Annual Audit Report.
95. The recognised stock exchange(s) shall review the Form B and the accompanying annual audit report,
submitted in terms of clause (d) of sub-regulation (3) of regulation 33 and clause (a) of sub-regulation (3) of
regulation 52, in the manner specified in Schedule VIII.’ by the SEBI (Listing Obligations and Disclosure
Requirements) (Amendment) Regulations, 2015, w.e.f. 01-04-2016
72
CHAPTER XI
PROCEDURE FOR ACTION IN CASE OF DEFAULT
Liability for contravention of the Act, rules or the regulations.

98. (1) The listed entity or any other person thereof who contravenes any of the provisions
of these regulations, shall, in addition to liability for action in terms of the securities
laws, be liable for the following actions by the respective stock exchange(s), in the
manner specified in circulars or guidelines issued by the Board:
(a) imposition of fines;
(b)suspension of trading;
(c) freezing of promoter/promoter group holding of designated securities, as may be
applicable, in coordination with depositories.
(d)any other action as may be specified by the Board from time to time
(2) The manner of revocation of actions specified in clauses (b) and (c) of sub-regulation (1),
shall be as specified in circulars or guidelines issued by the Board.
Failure to pay fine.

99. If listed entity fails to pay any fine imposed on it within such period as specified from
time to time, by the recognised stock exchange(s), after a notice in writing has been
served on it, the stock exchange may initiate action.
122[CHAPTER XI-A
POWER TO RELAX STRICT ENFORCEMENT OF THE REGULATIONS
Exemption from enforcement of the regulations in special cases.
99A. (1) The Board may, exempt any person or class of persons from the operation of all or
any of the provisions of these regulations for a period as may be specified but not exceeding
twelve months, for furthering innovation in technological aspects relating to testing new
products, processes, services, business models, etc. in live environment of regulatory sandbox
in the securities markets.
(2) Any exemption granted by the Board under sub-regulation (1) shall be subject to the
applicant satisfying such conditions as may be specified by the Board including conditions to
be complied with on a continuous basis.
Explanation. — For the purposes of these regulations, "regulatory sandbox" means a live
testing environment where new products, processes, services, business models, etc. may be
deployed on a limited set of eligible customers for a specified period of time, for furthering
innovation in the securities market, subject to such conditions as may be specified by the
Board.]
CHAPTER XII
MISCELLANEOUS
Amendments to other regulations.

100. The regulations specified in the Schedule IX to these regulations shall be amended in
the manner and to the extent stated therein.
122
Inserted by the SEBI (Regulatory Sandbox) (Amendment) Regulation, w.e.f. 17-04-2020.
73
101. (1) In order to remove any difficulties in the application or interpretation of these
regulations, the Board may issue clarifications through guidance notes or circulars after
recording reasons in writing.
(2)In particular, and without prejudice to the generality of the foregoing power, such guidance
notes or circulars may provide for all or any of the following matters, namely:
(a) procedural aspects including intimation to be given, documents to be submitted;
(b)disclosure requirements;
(c) listing conditions.
Power to relax strict enforcement of the regulations.

102. [(1)]123 The Board may in the interest of investors and securities market and for the
development of the securities market, relax the strict enforcement of any requirement of
these regulations, if the Board is satisfied that:
(a) any provision of Act(s), Rule(s), regulation(s) under which the listed entity is
established or is governed by, is required to be given precedence to; or
(b) the requirement may cause undue hardship to investors; or
(c) the disclosure requirement is not relevant for a particular industry or class of listed
entities; or
(d) the requirement is technical in nature; or
(e) the non-compliance is caused due to factors affecting a class of entities but being
beyond the control of the entities.
124
[(2) For seeking relaxation under sub-regulation (1), an application, giving details and
the grounds on which such relaxation has been sought, shall be filed with the Board.
(3) The application referred to under sub-regulation (2) shall be accompanied by a non-
refundable fee of rupees one lakh payable by way of direct credit in the bank account
through NEFT/ RTGS/ IMPS or any other mode allowed by Reserve Bank of India or
by way of a demand draft in favour of the Board payable in Mumbai.]
Repeal and Savings

103. (1) On and from the commencement of these regulations, all circulars stipulating or
modifying the provisions of the listing agreements including those specified in
Schedule X, shall stand rescinded.
(2) Notwithstanding such rescission, anything done or any action taken or purported to have
been done or taken including any enquiry or investigation commenced or show cause
notice issued in respect of the circulars specified in sub-regulation (1) or the Listing
Agreements, entered into between stock exchange(s) and listed entity, in force prior to the
commencement of these regulations, shall be deemed to have been done or taken under the
corresponding provisions of these regulations.
123
w.e.f. 16.11.2018
124
w.e.f. 16.11.2018
74
SCHEDULE I – TERMS OF SECURITIES
[See Regulation 12]
The listed entity shall use the facility of electronic clearing services or real time gross
settlement or national electronic funds transfer as follows:-
(1) the listed entity either directly 125[or through the depositories] or through their Registrar to
an Issue and/or Share Transfer Agent, shall use electronic clearing services (local,
regional or national), direct credit, real time gross settlement, national electronic funds
transfer etc for making payment of dividend/interest on securities issued/redemption or
repayment amount.
(2) the listed entity or Share Transfer Agent shall maintain bank details of their investors as
follows -
(a) for investors holding securities in dematerialized mode, by seeking the same from
the depositories.
(b) for investors holding securities in physical mode, by updating bank details of the
investors at their end.
(3) In cases where either the bank details such as Magnetic Ink Character Recognition,
Indian Financial System Code, etc. that are required for making electronic payment are
not available or the electronic payment instructions have failed or have been rejected by
the bank, listed entity or share transfer agent shall issue ‘payable-at-par’ warrants/
cheques for making payments:
Provided that the listed entity shall mandatorily print the bank account details of the
investors on such payment instruments and in cases where the bank details of investors
are not available, the listed entity shall mandatorily print the address of the investor on
such payment instructions.
125
Inserted by the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations,
2018, w.e.f. 30.5.2018.
75
SCHEDULE II: CORPORATE GOVERNANCE
PART A: MINIMUM INFORMATION TO BE PLACED BEFORE BOARD OF

DIRECTORS
[See Regulation 17(7)]
A. Annual operating plans and budgets and any updates.
B. Capital budgets and any updates.
C. Quarterly results for the listed entity and its operating divisions or business segments.
D. Minutes of meetings of audit committee and other committees of the board of directors.
E. The information on recruitment and remuneration of senior officers just below the level
of board of directors, including appointment or removal of Chief Financial Officer and
the Company Secretary.
F. Show cause, demand, prosecution notices and penalty notices, which are materially
important.
G. Fatal or serious accidents, dangerous occurrences, any material effluent or pollution

problems.
H. Any material default in financial obligations to and by the listed entity, or substantial
non-payment for goods sold by the listed entity.
I. Any issue, which involves possible public or product liability claims of substantial
nature, including any judgement or order which, may have passed strictures on the
conduct of the listed entity or taken an adverse view regarding another enterprise that
may have negative implications on the listed entity.
J. Details of any joint venture or collaboration agreement.
K. Transactions that involve substantial payment towards goodwill, brand equity, or

intellectual property.
L. Significant labour problems and their proposed solutions. Any significant development
in Human Resources/ Industrial Relations front like signing of wage agreement,
implementation of Voluntary Retirement Scheme etc.
M. Sale of investments, subsidiaries, assets which are material in nature and not in normal
course of business.
N. Quarterly details of foreign exchange exposures and the steps taken by management to
limit the risks of adverse exchange rate movement, if material.
O. Non-compliance of any regulatory, statutory or listing requirements and shareholders

service such as non-payment of dividend, delay in share transfer etc.
76
PART B: COMPLIANCE CERTIFICATE
The following compliance certificate shall be furnished by chief executive officer and chief
financial officer:
A. They have reviewed financial statements and the cash flow statement for the year
and that to the best of their knowledge and belief:
(1) these statements do not contain any materially untrue statement or omit any
material fact or contain statements that might be misleading;
(2) these statements together present a true and fair view of the listed entity’s affairs
and are in compliance with existing accounting standards, applicable laws and
regulations.
B. There are, to the best of their knowledge and belief, no transactions entered into by
the listed entity during the year which are fraudulent, illegal or violative of the listed
entity’s code of conduct.
C. They accept responsibility for establishing and maintaining internal controls for
financial reporting and that they have evaluated the effectiveness of internal control
systems of the listed entity pertaining to financial reporting and they have disclosed
to the auditors and the audit committee, deficiencies in the design or operation of
such internal controls, if any, of which they are aware and the steps they have taken
or propose to take to rectify these deficiencies.
D. They have indicated to the auditors and the Audit committee

(1) significant changes in internal control over financial reporting during the year;
(2) significant changes in accounting policies during the year and that the same have
been disclosed in the notes to the financial statements; and
(3) instances of significant fraud of which they have become aware and the
involvement therein, if any, of the management or an employee having a
significant role in the listed entity’s internal control system over financial
reporting.
PART C: ROLE OF THE AUDIT COMMITTEE AND REVIEW OF INFORMATION

BY AUDIT COMMITTEE
A. The role of the audit committee shall include the following:
(1) oversight of the listed entity’s financial reporting process and the disclosure of
its financial information to ensure that the financial statement is correct,
sufficient and credible;
(2) recommendation for appointment, remuneration and terms of appointment of
auditors of the listed entity;
(3) approval of payment to statutory auditors for any other services rendered by the
statutory auditors;
(4) reviewing, with the management, the annual financial statements and auditor's
report thereon before submission to the board for approval, with particular
reference to:
(a) matters required to be included in the director’s responsibility statement to
77
be included in the board’s report in terms of clause (c) of sub-section (3) of
Section 134 of the Companies Act, 2013;
(b) changes, if any, in accounting policies and practices and reasons for the
same;
(c) major accounting entries involving estimates based on the exercise of
judgment by management;
(d) significant adjustments made in the financial statements arising out of audit
findings;
(e) compliance with listing and other legal requirements relating to financial
statements;
(f) disclosure of any related party transactions;
(g) modified opinion(s) in the draft audit report;
(5) reviewing, with the management, the quarterly financial statements before
submission to the board for approval;
(6) reviewing, with the management, the statement of uses / application of funds
raised through an issue (public issue, rights issue, preferential issue, etc.), the
statement of funds utilized for purposes other than those stated in the offer
document / prospectus / notice and the report submitted by the monitoring
agency monitoring the utilisation of proceeds of a public or rights issue, and
making appropriate recommendations to the board to take up steps in this matter;
(7) reviewing and monitoring the auditor’s independence and performance, and
effectiveness of audit process;
(8) approval or any subsequent modification of transactions of the listed entity with
related parties;
(9) scrutiny of inter-corporate loans and investments;
(10) valuation of undertakings or assets of the listed entity, wherever it is necessary;
(11) evaluation of internal financial controls and risk management systems;
(12) reviewing, with the management, performance of statutory and internal auditors,
adequacy of the internal control systems;
(13) reviewing the adequacy of internal audit function, if any, including the structure
of the internal audit department, staffing and seniority of the official heading the
department, reporting structure coverage and frequency of internal audit;
(14) discussion with internal auditors of any significant findings and follow up there
on;
(15) reviewing the findings of any internal investigations by the internal auditors into
matters where there is suspected fraud or irregularity or a failure of internal
control systems of a material nature and reporting the matter to the board;
(16) discussion with statutory auditors before the audit commences, about the nature
and scope of audit as well as post-audit discussion to ascertain any area of
concern;
(17) to look into the reasons for substantial defaults in the payment to the depositors,
debenture holders, shareholders (in case of non-payment of declared dividends)
and creditors;
(18) to review the functioning of the whistle blower mechanism;
(19) approval of appointment of chief financial officer after assessing the
qualifications, experience and background, etc. of the candidate;
(20) Carrying out any other function as is mentioned in the terms of reference of the
audit committee.
78
126
[(21) reviewing the utilization of loans and/ or advances from/investment by the
holding company in the subsidiary exceeding rupees 100 crore or 10% of the asset
size of the subsidiary, whichever is lower including existing loans / advances /
investments existing as on the date of coming into force of this provision.]
B. The audit committee shall mandatorily review the following information:

(1) management discussion and analysis of financial condition and results of
operations;
(2) statement of significant related party transactions (as defined by the audit
committee), submitted by management;
(3) management letters / letters of internal control weaknesses issued by the
statutory auditors;
(4) internal audit reports relating to internal control weaknesses; and
(5) the appointment, removal and terms of remuneration of the chief internal auditor
shall be subject to review by the audit committee.
(6) statement of deviations:
(a) quarterly statement of deviation(s) including report of monitoring agency, if
applicable, submitted to stock exchange(s) in terms of Regulation 32(1).
(b) annual statement of funds utilized for purposes other than those stated in the
offer document/prospectus/notice in terms of Regulation 32(7).
PART D: ROLE OF COMMITTEES (OTHER THAN AUDIT COMMITTEE)

[See Regulation 19(4) and 20(4)]
A. ROLE OF NOMINATION AND REMUNERATION COMMITTEE :Role of
committee shall, inter-alia, include the following:
(1) formulation of the criteria for determining qualifications, positive attributes and
independence of a director and recommend to the board of directors a policy
relating to, the remuneration of the directors, key managerial personnel and other
employees;
(2) formulation of criteria for evaluation of performance of independent directors and
the board of directors;
(3) devising a policy on diversity of board of directors;
(4) identifying persons who are qualified to become directors and who may be
appointed in senior management in accordance with the criteria laid down, and
recommend to the board of directors their appointment and removal.
(5) whether to extend or continue the term of appointment of the independent director,
on the basis of the report of performance evaluation of independent directors.
127
[(6) recommend to the board, all remuneration, in whatever form, payable to senior
management.]
B. Stakeholders Relationship Committee
126
w.e.f. 1.4.2019.
127
Inserted ibid.
79
128
[The role of the committee shall inter-alia include the following:
(1) Resolving the grievances of the security holders of the listed entity including
complaints related to transfer/transmission of shares, non-receipt of annual report, non-
receipt of declared dividends, issue of new/duplicate certificates, general meetings etc.
(2) Review of measures taken for effective exercise of voting rights by
shareholders.
(3) Review of adherence to the service standards adopted by the listed entity in
respect of various services being rendered by the Registrar & Share Transfer Agent.
(4) Review of the various measures and initiatives taken by the listed entity for
reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend
warrants/annual reports/statutory notices by the shareholders of the company.]
PART E: DISCRETIONARY REQUIREMENTS

A. The Board
A non-executive chairperson may be entitled to maintain a chairperson's office at the
listed entity's expense and also allowed reimbursement of expenses incurred in
performance of his duties.
B. Shareholder Rights
A half-yearly declaration of financial performance including summary of the
significant events in last six-months, may be sent to each household of shareholders.
C. Modified opinion(s) in audit report

The listed entity may move towards a regime of financial statements with unmodified
audit opinion.
129[***]
E. Reporting of internal auditor

The internal auditor may report directly to the audit committee.
128
w.e.f. 1.4.2019. Prior to the same, the provision read as follows:
“The Committee shall consider and resolve the grievances of the security holders of the listed entity including
complaints related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends.”
129
Clause D omitted ibid, w.e.f. 1.4.2020. prior to the omission, clause D read as follows:
“D. Separate posts of chairperson and chief executive officer
The listed entity may appoint separate persons to the post of chairperson and managing director or chief
executive officer.”
80
SCHEDULE III
PART A: DISCLOSURES OF EVENTS OR INFORMATION: SPECIFIED

SECURITIES
[See Regulation 30]
The following shall be events/information, upon occurrence of which listed entity

shall make disclosure to stock exchange(s):
A. Events which shall be disclosed without any application of the guidelines for
materiality as specified in sub-regulation (4) of regulation (30):
1. Acquisition(s) (including agreement to acquire), Scheme of Arrangement

(amalgamation/ merger/ demerger/restructuring), or sale or disposal of any unit(s),
division(s) or subsidiary of the listed entity or any other restructuring.
Explanation.- For the purpose of this sub-para, the word 'acquisition' shall mean,-
(i) acquiring control, whether directly or indirectly; or,
(ii)acquiring or agreeing to acquire shares or voting rights in, a company, whether
directly or indirectly, such that -
(a) the listed entity holds shares or voting rights aggregating to five per
cent or more of the shares or voting rights in the said company, or;
(b)there has been a change in holding from the last disclosure made under
sub-clause (a) of clause (ii) of the Explanation to this sub-para and such
change exceeds two per cent of the total shareholding or voting rights
in the said company.
2. Issuance or forfeiture of securities, split or consolidation of shares, buyback of

securities, any restriction on transferability of securities or alteration in terms or
structure of existing securities including forfeiture, reissue of forfeited securities,
alteration of calls, redemption of securities etc.
3. Revision in Rating(s).
4. Outcome of Meetings of the board of directors: The listed entity shall disclose to
the Exchange(s), within 30 minutes of the closure of the meeting, held to consider
the following:
a) dividends and/or cash bonuses recommended or declared or the decision to
pass any dividend and the date on which dividend shall be paid/dispatched;
b) any cancellation of dividend with reasons thereof;
c) the decision on buyback of securities;
d) the decision with respect to fund raising proposed to be undertaken
e) increase in capital by issue of bonus shares through capitalization including
the date on which such bonus shares shall be credited/dispatched;
f) reissue of forfeited shares or securities, or the issue of shares or securities held
in reserve for future issue or the creation in any form or manner of new shares
or securities or any other rights, privileges or benefits to subscribe to;
g) short particulars of any other alterations of capital, including calls;
h) financial results;
i) decision on voluntary delisting by the listed entity from stock exchange(s).
81
5. Agreements (viz. shareholder agreement(s), joint venture agreement(s), family
settlement agreement(s) (to the extent that it impacts management and control of
the listed entity), agreement(s)/treaty(ies)/contract(s) with media companies)
which are binding and not in normal course of business, revision(s) or
amendment(s) and termination(s) thereof.
6. Fraud/defaults by promoter or key managerial personnel or by listed entity or
arrest of key managerial personnel or promoter.
7. Change in directors, key managerial personnel (Managing Director, Chief
Executive Officer, Chief Financial Officer , Company Secretary etc.), Auditor and
Compliance Officer.
130
[(7A) In case of resignation of the auditor of the listed entity, detailed reasons for
resignation of auditor, as given by the said auditor, shall be disclosed by the listed
entities to the stock exchanges as soon as possible but not later than twenty four hours
of receipt of such reasons from the auditor.
(7B) Resignation of auditor including reasons for resignation: In case of resignation of
an independent director of the listed entity, within seven days from the date of
resignation, the following disclosures shall be made to the stock exchanges by the
listed entities:
i. Detailed reasons for the resignation of independent directors as given by the
said director shall be disclosed by the listed entities to the stock exchanges.
ii. The independent director shall, along with the detailed reasons, also provide a
confirmation that there is no other material reasons other than those provided.
iii. The confirmation as provided by the independent director above shall also be
disclosed by the listed entities to the stock exchanges along with the detailed reasons
as specified in sub-clause (i) above.]
8. Appointment or discontinuation of share transfer agent.
9. Corporate debt restructuring.
10. One time settlement with a bank.
11. Reference to BIFR and winding-up petition filed by any party / creditors.
12. Issuance of Notices, call letters, resolutions and circulars sent to shareholders,
debenture holders or creditors or any class of them or advertised in the media by
the listed entity.
13. Proceedings of Annual and extraordinary general meetings of the listed entity.
14. Amendments to memorandum and articles of association of listed entity, in brief.
15. Schedule of Analyst or institutional investor meet and presentations on financial
results made by the listed entity to analysts or institutional investors;
[16. The following events in relation to the corporate insolvency resolution process
(CIRP) of a listed corporate debtor under the Insolvency Code:
a) Filing of application by the corporate applicant for initiation of CIRP,
also specifying the amount of default;
b) Filing of application by financial creditors for initiation of CIRP
against the corporate debtor, also specifying the amount of default;
c) Admission of application by the Tribunal, along with amount of
default or rejection or withdrawal, as applicable ;
d) Public announcement made pursuant to order passed by the Tribunal
under section 13 of Insolvency Code;
130
w.e.f. 1.4.2019.
82
e) List of creditors as required to be displayed by the corporate debtor
under regulation 13(2)(c) of the IBBI (Insolvency Resolution Process
for Corporate Persons) Regulations, 2016;
f) Appointment/ Replacement of the Resolution Professional;
g) Prior or post-facto intimation of the meetings of Committee of
Creditors;
h) Brief particulars of invitation of resolution plans under section
25(2)(h) of Insolvency Code in the Form specified under regulation
36A(5) of the IBBI (Insolvency Resolution Process for Corporate
Persons) Regulations, 2016;
i) Number of resolution plans received by Resolution Professional;
j) Filing of resolution plan with the Tribunal;
m) Approval of resolution plan by the Tribunal or rejection, if applicable;
k) Salient features, not involving commercial secrets, of the resolution
plan approved by the Tribunal, in such form as may be specified;
l) Any other material information not involving commercial secrets.]131
B. Events which shall be disclosed upon application of the guidelines for

materiality referred sub-regulation (4) of regulation (30):
1. Commencement or any postponement in the date of commencement of
commercial production or commercial operations of any unit/division.
2. Change in the general character or nature of business brought about by
arrangements for strategic, technical, manufacturing, or marketing tie-up, adoption
of new lines of business or closure of operations of any unit/division (entirety or
piecemeal).
3. Capacity addition or product launch.
4. Awarding, bagging/ receiving, amendment or termination of awarded/bagged
orders/contracts not in the normal course of business.
5. Agreements (viz. loan agreement(s) (as a borrower) or any other agreement(s)
which are binding and not in normal course of business) and revision(s) or
amendment(s) or termination(s) thereof.
6. Disruption of operations of any one or more units or division of the listed entity
due to natural calamity (earthquake, flood, fire etc.), force majeure or events such
as strikes, lockouts etc.
7. Effect(s) arising out of change in the regulatory framework applicable to the listed
entity
8. Litigation(s) / dispute(s) / regulatory action(s) with impact.
9. Fraud/defaults etc. by directors (other than key managerial personnel) or
employees of listed entity.
10. Options to purchase securities including any ESOP/ESPS Scheme.
11. Giving of guarantees or indemnity or becoming a surety for any third party.
12. Granting, withdrawal , surrender , cancellation or suspension of key licenses or
regulatory approvals.
C. Any other information/event viz. major development that is likely to affect

business, e.g. emergence of new technologies, expiry of patents, any change of
131
w.e.f. 31.05.2018.
83
accounting policy that may have a significant impact on the accounts, etc. and
brief details thereof and any other information which is exclusively known to the
listed entity which may be necessary to enable the holders of securities of the
listed entity to appraise its position and to avoid the establishment of a false
market in such securities.
D. Without prejudice to the generality of para (A), (B) and (C) above, the listed entity
may make disclosures of event/information as specified by the Board from time to
time.
PART B: DISCLOSURE OF INFORMATION HAVING BEARING ON

PERFORMANCE/OPERATION OF LISTED ENTITY AND/OR PRICE SENSITIVE
INFORMATION: NON-CONVERTIBLE DEBT SECURITIES & NON-
CONVERTIBLE REDEEMABLE PREFERENCE SHARES
A. The listed entity shall promptly inform to the stock exchange(s) of all information
which shall have bearing on performance/operation of the listed entity or is price
sensitive or shall affect payment of interest or dividend of non-convertible preference
shares or redemption of non convertible debt securities or redeemable preference
shares including :
(1) expected default in timely payment of interests/preference dividend or

redemption or repayment amount or both in respect of the non-convertible debt
securities and non-convertible redeemable preference shares and also default in
creation of security for debentures as soon as the same becomes apparent;
(2) any attachment or prohibitory orders restraining the listed entity from transferring
non-convertible debt securities or non-convertible redeemable preference shares
from the account of the registered holders along-with the particulars of the
numbers of securities so affected , the names of the registered holders and their
demat account details;
(3) any action which shall result in the redemption, conversion, cancellation,
retirement in whole or in part of any non-convertible debt securities or reduction,
redemption, cancellation, retirement in whole or in part of any non-convertible
redeemable preference shares;
(4) any action that shall affect adversely payment of interest on non-convertible debt
securities or payment of dividend on non-convertible redeemable preference
shares including default by issuer to pay interest on non-convertible debt
securities or redemption amount and failure to create a charge on the assets;
(5) any change in the form or nature of any of its non-convertible debt securities or
non-convertible redeemable preference shares that are listed on the stock
exchange(s) or in the rights or privileges of the holders thereof and make an
application for listing of the securities as changed, if the stock exchange(s) so
require;
84
(6) any changes in the general character or nature of business / activities, disruption
of operation due to natural calamity, and commencement of commercial
production / commercial operations;
(7) any events such as strikes and lock outs. which have a bearing on the interest
payment/ dividend payment / principal repayment capacity;
(8) details of any letter or comments made by debenture trustees regarding

payment/non-payment of interest on due dates, payment/non-payment of
principal on the due dates or any other matter concerning the security, listed
entity and /or the assets along with its comments thereon, if any;
(9) delay/ default in payment of interest or dividend / principal amount /redemption

for a period of more than three months from the due date;
(10) failure to create charge on the assets within the stipulated time period;
(11) any instance(s) of default/delay in timely repayment of interests or principal

obligations or both in respect of the debt securities including, any proposal for re-
scheduling or postponement of the repayment programmes of the dues/debts of
the listed entity with any investor(s)/lender(s).
Explanation.- For the purpose of this sub-para, ‘default’ shall mean Non-payment
of interest or principal amount in full on the pre-agreed date and shall be
recognized at the first instance of delay in servicing of any interest or principal on
debt.
(12) any major change in composition of its board of directors, which may amount to
change in control as defined in Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(13) any revision in the rating;
(14) the following approvals by board of directors in their meeting:-
(a) the decision to pass any interest payment;

(b) short particulars of any increase of capital whether by issue of bonus
securities through capitalization, or by way of right securities to be
offered to the debenture holders, or in any other way;
(15) all the information, report, notices, call letters, circulars, proceedings, etc
concerning non-convertible redeemable preference shares or non convertible debt
securities;
(16) any other change that shall affect the rights and obligations of the holders of non-
convertible debt securities / non-convertible redeemable preference shares, any
other information not in the public domain necessary to enable the holders of the
listed securities to clarify its position and to avoid the creation of a false market
85
in such listed securities or any other information having bearing on the
operation/performance of the listed entity as well as price sensitive information.
PART C: DISCLOSURES OF MATERIAL EVENTS OR INFORMATION: INDIAN

DEPOSITORY RECEIPTS
A. The listed entity shall promptly inform to the stock exchange(s) of all events which are
material and/or all information which are price sensitive or have bearing on
performance/operation of the listed entity at the same time and to the extent it intimates
to the listing authority or any other authority in its home country or other jurisdictions
where its securities may be listed or other stock exchange(s) in its home country or
other jurisdictions where its securities may be listed including:
(1) any action or investigations initiated by any regulatory or statutory authority and
the purpose for which it was initiated.
securities out of the names of the registered holders and particulars of the registered
holders thereof.
(3) the meeting of the board of directors which has been held to consider or decide on
the following :
(a) all dividends and/or cash bonuses recommended or declared or the
decision to pass any dividend or cash bonus;
(b) the total turnover, gross profit/loss, provision for depreciation, tax
provisions and net profits for the year (with comparison with the previous
year) and the amounts appropriated from reserves, capital profits,
accumulated profits of past years or other special source to provide wholly
or partly for any dividend, even if this calls for qualification that such
information is provisional or subject to audit;
(c) the recommendation or declaration of dividend or rights issue or issue of
convertible debentures or of debentures carrying a right to subscribe to
equity shares or the passing over of the dividend
(d) any decision on buy back of equity shares of the listed entity,;
(4) Change in
(a) board of directors of listed entity by death, resignation, removal or
otherwise;
(b) managing director;
(c) auditors appointed to audit the books and accounts;
(d) the compliance officer;
(e) the registrar to an issue and/or share transfer agent, domestic depository or
the overseas custodian bank;
(5) any change in the rights attaching to any class of equity shares into which the
Indian Depository Receipts are exchangeable;
(6) short particulars of any increase of capital whether by issue of bonus shares through
capitalization, or by rights issue of equity shares, or in any other manner;
86
(7) short particulars of the reissues of forfeited shares or securities, or the issue of
shares or securities held in reserve for future issue or the creation in any form or
manner of new shares or securities or any other rights, privileges or benefits to
subscribe thereto;
(8) short particulars of any other alterations of capital, including calls;
(9) in the event of the listed entity granting any options to purchase any Indian
Depository Receipts the following particulars::
(a) the number of Indian Depository Receipts covered by such options, terms
thereof and the time within which they may be exercised;
(b) any subsequent changes or cancellation or exercise of such options;
(10) Notices, resolutions, circulars, call letters or any other circulars etc. issued or
advertised anywhere with respect to:
(a) proceedings at all annual and extraordinary general meetings of the listed
entity, including notices of meetings and proceedings of meeting;
(b) amendments to its constitutional documents as soon as they have been
approved by the listed entity in general meeting;
(c) compliance with requirements in home country or in other jurisdictions
where such securities are listed;
(d) any merger, amalgamation, re-construction, reduction of capital, scheme
or arrangement involving the listed entity including meetings of equity
shareholders, IDR Holders or any class of them and proceedings at all such
meetings;
(11) any other information necessary to enable the IDR Holders to appraise the
listed entity’s position and to avoid the establishment of a false market in
IDRs;
B. The listed entity shall, apart from complying with all specific requirements as above,
intimate the stock exchange(s) immediately of events such as strikes, lock outs, closure
on account of power cuts, etc. and other material events or price sensitive information
or events which shall have a material bearing on the performance / operations of the
listed entity both at the time of occurrence of the event and subsequently after the
cessation of the event at the same time and as to the extent that it discloses to holders
of securities in its home country or in other jurisdictions where such securities are
listed;
C. In addition to above, the listed entity shall disclose to the stock exchange(s), any
information which is disclosed to any other overseas stock exchange(s) or made public
in any other overseas securities market, on which its securities may be listed or quoted,
simultaneously with such disclosure or publication, or as soon thereafter as may be
reasonably practicable;
D. The listed entity shall submit to the stock exchange(s) on request any other information
concerning the listed entity as the stock exchange(s) may reasonably require;
87
PART D: DISCLOSURE OF INFORMATION HAVING BEARING ON
PERFORMANCE/ OPERATION OF LISTED ENTITY AND/OR PRICE SENSITIVE
INFORMATION: SECURITISED DEBT INSTRUMENT
A. The listed entity shall promptly inform the stock exchange(s) of all information
having bearing on the performance/operation of the listed entity and price sensitive
information including:
securitized debt instruments from the account of the registered holders and
particulars of the numbers of securitized debt instruments so affected and the
names of the registered holders and their demat account details;
(2) any action that shall result in the redemption, conversion, cancellation, retirement
in whole or in part of any securitized debt instruments;
(3) any action that shall affect adversely payment of interest on securitized debt
instruments;
(4) any change in the form or nature of any of its securitized debt instruments that are
listed on the stock exchange(s) or in the rights or privileges of the holders thereof
and to make an application for listing of the said securities as changed, if the
stock exchange(s) so requires;
(5) expected default in timely payment of interest or redemption or repayment

amount or both in respect of the securitized debt instruments listed on the
recognised stock exchange(s) as soon as the same becomes apparent;
(6) changes in the General Character or nature of business / activities, disruption of

operation due to natural calamity etc;
(7) revision in rating as a result of credit rating done periodically;
(8) delay/ default in payment of interest/principal amount to the investors for a

period of more than three months from the due date; and
(9) any other change that shall affect the rights and obligations of the holders of
securitized debt instruments, any other information not in the public domain
necessary to enable the holders of the listed securitized debt instruments to
clarify its position and to avoid the creation of a false market in such listed
securities or any other information having bearing on the
operation/performance of the listed entity as well as price sensitive
information.
88
132[PART E: DISCLOSURE OF EVENTS OR INFORMATION TO STOCK
EXCHANGES: SECURITY RECEIPTS
[See Regulation 87B (1)]
A. The following events/information shall be disclosed by the listed entity without any
application of guidelines of materiality as soon as reasonably possible but not later than
twenty four hours from occurrence of event or information:
(1) any delay or expected delay in cash flows from the due date or pre- agreed date
if any;
(2) any change in value of cash-flows as disclosed if any;
(3) any receipt of cash flow or expected cash flow along with quantum so received;
(4) any change in credit enhancement measures;
(5) periodic rating obtained from credit rating agency or any revision in the rating or
any expected revision in rating;
(6) periodic Net Asset Value;
(7) any proposal to change or change of credit rating agency or Valuer;
(8) any change in profile of the assets by way of accretion to or realisation of assets
from the existing pool;
(9) any proposal for acquisition of assets including terms of acquisition;
(10) any expected non-realisation or non-realisation of the financial assets and

remedial measures proposed to be undertaken;
(11) any change in nature of charge on the underlying assets.
(12) any proposal to change or any change in terms of security receipts including
rights or privileges or nature or form etc.;
(13) any proposal or action with respect to exercising call/put option (right to
redeem) or any similar option by the listed entity;
(14) any breach of covenant(s) under the terms of security receipts;
(15) any proposal or action for forfeiture of unclaimed cash flow or forfeiture of any
security receipts;
(16) any change in resolution plan;
132
Inserted by SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2018,
w.e.f. 06.09.2018.
89
(17) any change in percentage holding of non-performing loans across other banks;
(18) any change in the general character or nature of business / activities, disruption
of operation due to natural calamity etc. of the listed entity;
(19) any attachment or prohibitory orders restraining the listed entity from
transferring security receipts;
(20) initiation or status update with respect to reference to National Company Law
Tribunal under the Insolvency and Bankruptcy Code 2016 of any underlying
assets;
(21) intimation in advance of the meeting of its board of directors, at which the
recommendation or declaration of issue of security receipts or any other matter
affecting the rights or interests of holders of security receipts is proposed to be
considered and also outcome of such meetings;
(22) fraud or defaults by sponsor or key managerial personnel or arrest of key

managerial personnel or sponsor;
(23) change in directors, key managerial personnel (Managing Director, Chief

Executive Officer, Chief Financial Officer , Company Secretary etc.), Auditor
and Compliance Officer of the Sponsor;
(24) in addition to the above, the listed entity shall provide all such disclosures to the
Stock Exchange(s) as it is required to make before the Reserve Bank of India as
per the extant requirement and/or any other disclosure(s) as prescribed by
Reserve Bank of India from time to time;
(25) in case where an event occurs or an information is available with the listed
entity, which has not been indicated in these regulations, but which may be
material, the listed entity is required to make adequate disclosures in this
regard.]
SCHEDULE IV
PART A: DISCLOSURES IN FINANCIAL RESULTS

[See Regulation 33(1)(e)]
The listed entity shall disclose the following while preparing the financial results:-
A. Changes in accounting policies, if any, shall be disclosed in accordance with

Accounting Standard 5 or Indian Accounting Standard 8, as applicable, specified in
Section 133 of the Companies Act, 2013 read with relevant rules framed thereunder or
by the Institute of Chartered Accountants of India, whichever is applicable.
90
B. If the auditor has expressed any modified opinion(s) [***] 133 in respect of audited
financial results submitted or published under this para, the listed entity shall disclose
such modified opinion(s) [***]134 and cumulative impact of the same on profit or loss, net
worth, total assets, turnover/total income, earning per share [, total expenditure, total
liabilities] 135 or any other financial item(s) which may be impacted due to modified
opinion(s) [***]136, while publishing or submitting such results.
[BA. If the auditor has expressed any modified opinion(s), the management of the listed
entity has the option to explain its views on the audit qualifications and the same shall be
included in the Statement on Impact of Audit Qualifications (for audit report with
modified opinion).
BB. With respect to audit qualifications where the impact of the qualification is not
quantifiable:
137
[i. The management shall mandatorily make an estimate which the auditor shall
review and report accordingly.
ii. Notwithstanding the above, the management may be permitted to not provide
estimate on matters like going concerns or sub-judice matters; in which case, the
management shall provide the reasons and the auditor shall review the same and
report accordingly.]]138
C. If the auditor has expressed any modified opinion(s) or other reservation(s) in his audit
report or limited review report in respect of the financial results of any previous
financial year or quarter which has an impact on the profit or loss of the reportable
period, the listed entity shall include as a note to the financial results –
(i) how the modified opinion(s) or other reservation(s) has been resolved; or
(ii) if the same has not been resolved, the reason thereof and the steps which
the listed entity intends to take in the matter.
D. If the listed entity has changed its name suggesting any new line of business, it shall
disclose the net sales or income, expenditure and net profit or loss after tax figures
pertaining to the said new line of business separately in the financial results and shall
133
The words ‘or other reservation(s)’ omitted by SEBI (Listing Obligations and Disclosure Requirements)
134
135
01.04.2016
136
137
w.e.f. 1.4.2019. Prior to the substitution, the sub-clauses read as follows:
“i. The management shall make an estimate and the auditor shall review the same and report accordingly; or
ii. If the management is unable to make an estimate, it shall provide the reasons and the auditor shall review the
same and report accordingly.
The above shall be included in the statement on impact of audit qualifications (for audit report with modified
opinion).”
138
01.04.2016
91
continue to make such disclosures for the three years succeeding the date of change in
name:
Provided that the tax expense shall be allocated between the said new line of business
and other business of the listed entity in the ratio of the respective figures of net profit
before tax, subject to any exemption, deduction or concession available under the tax
laws.
E. If the listed entity had not commenced commercial production or commercial

operations during the reportable period, the listed entity shall, instead of submitting
financial results, disclose the following details:
(i) details of amount raised i.e. proceeds of any issue of shares or debentures
made by the listed entity;
(ii) the portions thereof which is utilized and that remaining unutilized;
(iii) the details of investment made pending utilisation ;
(iv) brief description of the project which is pending completion;
(v) status of the project and
(vi) expected date of commencement of commercial production or commercial
operations:
Provided that the details mentioned above shall be approved by the board of directors
based on certification by the chief executive officer and chief financial officer.
F. All items of income and expenditure arising out of transactions of exceptional nature
shall be disclosed.
G. Extraordinary items, if applicable, shall be disclosed in accordance with Accounting

Standard 5 (AS 5 – Net Profit or Loss for the Period, Prior Period Items and Changes
in Accounting Policies) or Companies (Accounting Standards) Rules, 2006, whichever
is applicable.
H. The listed entity, whose revenues are subject to material seasonal variations, shall
disclose the seasonal nature of their activities and the listed entity may supplement
their financial results with information for the twelve month period ending on the last
day of the quarter for the current and preceding years on a rolling basis.
I. The listed entity shall disclose any event or transaction which occurred during or
before the quarter that is material to an understanding of the results for the quarter
including but not limited to completion of expansion and diversification programmes,
strikes and lock-outs, change in management, change in capital structure and the listed
entity shall also disclose similar material events or transactions that take place
subsequent to the end of the quarter.
J. The listed entity shall disclose the following in respect of dividends paid or
recommended for the year, including interim dividends :
(i) amount of dividend distributed or proposed for distribution per share; the
amounts in respect of different classes of shares shall be distinguished and the
nominal values of shares shall also be indicated;
(ii) where dividend is paid or proposed to be paid pro-rata for shares allotted
during the year, the date of allotment and number of shares allotted, pro-rata
92
amount of dividend per share and the aggregate amount of dividend paid or
proposed to be paid on pro-rata basis.
K. The listed entity shall disclose the effect on the financial results of material changes in
the composition of the listed entity, if any, including but not limited to business
combinations, acquisitions or disposal of subsidiaries and long term investments, any
other form of restructuring and discontinuance of operations.
L. The listed entity shall ensure that segment reporting is done in accordance with AS-17
or Indian Accounting Standard 108 as applicable, specified in Section 133 of the
Companies Act, 2013 read with relevant rules framed thereunder or by the Institute of
Chartered Accountants of India, whichever is applicable.
93
SCHEDULE IV: PART B: PREPARTION AND DISCLSOURES IN FINANCIAL
RESULTS OF LISTED ENTITY WHICH HAS LISTED ITS INDIAN DEPOSITORY
RECEIPTS
The listed entity shall comply with the following requirements while preparing the
financial results:-
A. Periodicity of Disclosure of Financial Results

(1) Financial results may be given on annual, half yearly and/or quarterly basis, as
required under the requirements of the home country.
B. Accounting Principle to be used in preparation and disclosure of financial

Results:
(1) The listed entity may prepare and disclose its financial results in accordance with
Indian GAAP or International Financial Reporting Standards IFRS or US GAAP
(2) In case the listed entity prepares and discloses the financial results as per US
GAAP, a reconciliation statement vis-a-vis Indian GAAP and summary of
significant differences between the Indian GAAP and US GAAP has to be
annexed.
(3) If financial results are prepared in accordance with IFRS, then listed entity shall
annex only the summary of significant differences between the Indian GAAP and
IFRS.
(4) If the listed entity is shifting from IFRS to US GAAP or vice versa then the
accounts relating to the previous period shall be properly restated for comparison;
(5) The Accounting / Reporting Standard followed for any interim results shall be
consistent with that of the Annual results.
(6) The financial results so submitted shall be based on the same set of accounting
policies as those followed in the previous year provided that in case, there are
changes in the accounting policies, the results of previous year shall be restated as
per the present accounting policies, to make it comparable with current year
results;
C. Auditing/Limited Review
(1) In case the listed entity prepares and discloses the financial results as per Indian
GAAP, the listed entity shall ensure that the annual, half yearly and/or quarterly
results, as required under the laws , rules or regulations of home country, shall be
audited or subject to limited review by a Chartered Accountant in accordance with
Auditing ad Assurance Standards.
(2) In case the listed entity prepares and discloses the financial results as per US
GAAP or IFRS, the listed entity shall ensure that the annual, half yearly and/or
quarterly results, as required under the laws, rules or regulations of home country
shall be audited or subject to limited review by professional accountant or certified
public accountant in accordance with the International Standards on Auditing. The
94
auditor’s report shall also be prepared in accordance with the International
Standards on Auditing.
D. Disclosures
(1) The listed entity shall disclose the audit qualification(s) or any other audit
reservation(s) along with the financial results in addition to the explanatory
statement as to how audit qualification(s) or any other audit reservation(s) in
respect of the audited accounts of the previous accounting year have been
addressed in the financial results;
(2) Format
(a) The listed entity shall ensure that, if Indian GAAP is followed in preparation
of the financial results the format of the disclosure of financial results shall
be as prescribed by the Board.
(b) In case if Indian GAAP is not followed, the format of such disclosure shall
be as per the disclosure requirements of the listed entity in the home country
where the listed entity is listed.
(3) The listed entity shall make disclosures of its financial information in its
functional currency/reporting currency/national currency and the reporting
currency shall be restricted to Sterling Pound/Euro/Yen/US Dollar.
(4) The listed entity shall provide convenient translation into Indian Rupees of the
latest year’s/periods statements (as the case may be) of consolidated profit and
losses, assets and liabilities and cash flows, at the closing rate of exchange, as at
the date on which the financial information is presented.
(5) The listed entity shall provide convenient translations in English and other notes
such that the IDR Holders are able to understand such financial statements.
95
SCHEDULE V: ANNUAL REPORT
[See Regulation 34(3) and 53(f)]
The annual report shall contain the following additional disclosures:
A. Related Party Disclosure:

1. The listed entity shall make disclosures in compliance with the Accounting
Standard on “Related Party Disclosures”.
2. The disclosure requirements shall be as follows:

Sr. In the Disclosures of amounts at the year end and the maximum amount of
no. accounts of loans/ advances/ Investments outstanding during the year.
1 Holding  Loans and advances in the nature of loans to subsidiaries by
Company name and amount.
 Loans and advances in the nature of loans to associates by name
and amount.
 Loans and advances in the nature of loans to firms/companies in
which directors are interested by name and amount.
2 Subsidiary Same disclosures as applicable to the parent company in the
accounts of subsidiary company.
3 Holding Investments by the loanee in the shares of parent company and
Company subsidiary company, when the company has made a loan or advance
in the nature of loan.
For the purpose of above disclosures directors’ interest shall have the same
meaning as given in Section184 of Companies Act, 2013.
139
[(2A) Disclosures of transactions of the listed entity with any person or entity
belonging to the promoter/promoter group which hold(s) 10% or more
shareholding in the listed entity, in the format prescribed in the relevant
accounting standards for annual results.]
3. The above disclosures shall be applicable to all listed entities except for listed
banks.
B. Management Discussion and Analysis:
1. This section shall include discussion on the following matters within the limits set
by the listed entity’s competitive position:
(a) Industry structure and developments.
(b) Opportunities and Threats.
(c) Segment–wise or product-wise performance.
(d) Outlook
(e) Risks and concerns.
(f) Internal control systems and their adequacy.
(g) Discussion on financial performance with respect to operational performance.
139
w.e.f. 1.4.2019.
96
(h) Material developments in Human Resources / Industrial Relations front,
including number of people employed.
140
[(i) details of significant changes (i.e. change of 25% or more as compared to
the immediately previous financial year) in key financial ratios, along with
detailed explanations therefor, including:
(i) Debtors Turnover
(ii) Inventory Turnover
(iii) Interest Coverage Ratio
(iv) Current Ratio
(v) Debt Equity Ratio
(vi) Operating Profit Margin (%)
(vii) Net Profit Margin (%)
or sector-specific equivalent ratios, as applicable.
(j) details of any change in Return on Net Worth as compared to the immediately
previous financial year along with a detailed explanation thereof.]
2. Disclosure of Accounting Treatment:

Where in the preparation of financial statements, a treatment different from that
prescribed in an Accounting Standard has been followed, the fact shall be disclosed
in the financial statements, together with the management’s explanation as to why
it believes such alternative treatment is more representative of the true and fair
view of the underlying business transaction.
C. Corporate Governance Report: The following disclosures shall be made in the

section on the corporate governance of the annual report.
(1) A brief statement on listed entity’s philosophy on code of governance.
(2) Board of directors:

(a) composition and category of directors (e.g. promoter, executive, non-
executive, independent non-executive, nominee director - institution
represented and whether as lender or as equity investor);
(b) attendance of each director at the meeting of the board of directors and the
last annual general meeting;
(c) number of other board of directors or committees in which a directors is a
member or chairperson141[, and with effect from the Annual Report for the
year ended 31st March 2019, including separately the names of the listed
entities where the person is a director and the category of directorship];
(d) number of meetings of the board of directors held and dates on which held;
(e) disclosure of relationships between directors inter-se;
(f) number of shares and convertible instruments held by non- executive
directors;
(g) web link where details of familiarisation programmes imparted to
independent directors is disclosed.
142
[(h) A chart or a matrix setting out the skills/expertise/competence of the
140
w.e.f. 1.4.2019.
141
Inserted ibid., w.e.f from the date specified in the provision.
142
w.e.f. 1.4.2019.
97
board of directors specifying the following:
(i) With effect from the financial year ending March 31, 2019, the
list of core skills/expertise/competencies identified by the board of
directors as required in the context of its business(es) and sector(s) for
it to function effectively and those actually available with the board;
and
(ii) With effect from the financial year ended March 31, 2020, the
names of directors who have such skills / expertise / competence
(i) confirmation that in the opinion of the board, the independent directors
fulfill the conditions specified in these regulations and are independent of the
management.
(j) detailed reasons for the resignation of an independent director who resigns
before the expiry of his tenure along with a confirmation by such director that
there are no other material reasons other than those provided.]
(3) Audit committee:

(a) brief description of terms of reference;
(b) composition, name of members and chairperson;
(c) meetings and attendance during the year.
(4) Nomination and Remuneration Committee:

(a) brief description of terms of reference;
(b) composition, name of members and chairperson;
(c) meeting and attendance during the year;
(d) performance evaluation criteria for independent directors.
(5) Remuneration of Directors:

(a) all pecuniary relationship or transactions of the non-executive directors vis-
à-vis the listed entity shall be disclosed in the annual report;
(b) criteria of making payments to non-executive directors. alternatively, this
may be disseminated on the listed entity’s website and reference drawn
thereto in the annual report;
(c) disclosures with respect to remuneration: in addition to disclosures required
under the Companies Act, 2013, the following disclosures shall be made:
(i) all elements of remuneration package of individual directors
summarized under major groups, such as salary, benefits, bonuses,
stock options, pension etc;
(ii) details of fixed component and performance linked incentives, along
with the performance criteria;
(iii) service contracts, notice period, severance fees;
(iv) stock option details, if any and whether issued at a discount as well as
the period over which accrued and over which exercisable.
(6) Stakeholders' grievance committee:

(a) name of non-executive director heading the committee;
(b) name and designation of compliance officer;
(c) number of shareholders’ complaints received so far;
(d) number not solved to the satisfaction of shareholders;
(e) number of pending complaints.
98
(7) General body meetings:
(a) location and time, where last three annual general meetings held;
(b) whether any special resolutions passed in the previous three annual general
meetings;
(c) whether any special resolution passed last year through postal ballot –
details of voting pattern;
(d) person who conducted the postal ballot exercise;
(e) whether any special resolution is proposed to be conducted through postal
ballot;
(f) procedure for postal ballot.
(8) Means of communication:

(a) quarterly results;
(b) newspapers wherein results normally published;
(c) any website, where displayed;
(d) whether it also displays official news releases; and
(e) presentations made to institutional investors or to the analysts.
(9) General shareholder information:

(a) annual general meeting - date, time and venue;
(b) financial year;
(c) dividend payment date;
(d) the name and address of each stock exchange(s) at which the listed
entity's securities are listed and a confirmation about payment of annual
listing fee to each of such stock exchange(s);
(e) stock code;
(f) market price data- high, low during each month in last financial year;
(g) performance in comparison to broad-based indices such as BSE sensex,
CRISIL Index etc;
(h) in case the securities are suspended from trading, the directors report shall
explain the reason thereof;
(i) registrar to an issue and share transfer agents;
(j) share transfer system;
(k) distribution of shareholding;
(l) dematerialization of shares and liquidity;
(m) outstanding global depository receipts or american depository receipts or
warrants or any convertible instruments, conversion date and likely
impact on equity;
(n) commodity price risk or foreign exchange risk and hedging activities;
(o) plant locations;
(p) address for correspondence.
143
[(q) list of all credit ratings obtained by the entity along with any revisions
thereto during the relevant financial year, for all debt instruments of such entity
or any fixed deposit programme or any scheme or proposal of the listed entity
involving mobilization of funds, whether in India or abroad.]
(10) Other Disclosures:
143
w.e.f. 1.4.2019.
99
(a) disclosures on materially significant related party transactions that may
have potential conflict with the interests of listed entity at large;
(b) details of non-compliance by the listed entity, penalties, strictures
imposed on the listed entity by stock exchange(s) or the board or any
statutory authority, on any matter related to capital markets, during the
last three years;
(c) details of establishment of vigil mechanism, whistle blower policy, and
affirmation that no personnel has been denied access to the audit committee;
(d) details of compliance with mandatory requirements and adoption of the
non-mandatory requirements;
(e) web link where policy for determining ‘material’ subsidiaries is disclosed;
(f) web link where policy on dealing with related party transactions;
(g) disclosure of commodity price risks and commodity hedging activities.
144
[(h) Details of utilization of funds raised through preferential allotment or
qualified institutions placement as specified under Regulation 32 (7A).
(i) a certificate from a company secretary in practice that none of the directors
on the board of the company have been debarred or disqualified from being
appointed or continuing as directors of companies by the Board/Ministry of
Corporate Affairs or any such statutory authority.
(j) where the board had not accepted any recommendation of any committee of
the board which is mandatorily required, in the relevant financial year, the same
to be disclosed along with reasons thereof:
Provided that the clause shall only apply where recommendation of /
submission by the committee is required for the approval of the Board of
Directors and shall not apply where prior approval of the relevant committee
is required for undertaking any transaction under these Regulations.
(k) total fees for all services paid by the listed entity and its subsidiaries, on a
consolidated basis, to the statutory auditor and all entities in the network
firm/network entity of which the statutory auditor is a part.]
145
[(l) disclosures in relation to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013:
a. number of complaints filed during the financial year
b. number of complaints disposed of during the financial year
c. number of complaints pending as on end of the financial year.]
(11) Non-compliance of any requirement of corporate governance report of sub-

paras (2) to (10) above, with reasons thereof shall be disclosed.
(12) The corporate governance report shall also disclose the extent to which the
discretionary requirements as specified in Part E of Schedule II have been
adopted.
(13) The disclosures of the compliance with corporate governance requirements

specified in regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of
regulation 46 shall be made in the section on corporate governance of the
annual report.
144
w.e.f. 1.4.2019.
145
w.e.f. 16.11.2018.
100
D. Declaration signed by the chief executive officer stating that the members of
board of directors and senior management personnel have affirmed
compliance with the code of conduct of board of directors and senior
management.
E. Compliance certificate from either the auditors or practicing company

secretaries regarding compliance of conditions of corporate governance shall
be annexed with the directors’ report.
F. Disclosures with respect to demat suspense account/ unclaimed suspense account

(1) The listed entity shall disclose the following details in its annual report, as long as
there are shares in the demat suspense account or unclaimed suspense account, as
applicable :
(a) aggregate number of shareholders and the outstanding shares in the
suspense account lying at the beginning of the year;
(b) number of shareholders who approached listed entity for transfer of shares
from suspense account during the year;
(c) number of shareholders to whom shares were transferred from suspense
account during the year;
(d) aggregate number of shareholders and the outstanding shares in the
suspense account lying at the end of the year;
(e) that the voting rights on these shares shall remain frozen till the rightful
owner of such shares claims the shares.
.
SCHEDULE VI: MANNER OF DEALING WITH UNCLAIMED SHARES
A. The listed entity may delegate the following procedural requirements to a share
transfer agent.
B. Reminders to be sent
(1) The listed entity shall send at least three reminders at the address as mentioned
below:
(a) For shares in physical form, reminders shall be sent to the address given in
the application form as well as last available address as per listed entity’s
record.
(b) For shares in demat form, reminders shall be sent to the address captured in
depository’s database or address given in the application form, in case of
application made in physical form.
C. Procedure in case of non receipt of response to reminders

(1) For shares in demat form, the unclaimed shares shall be credited to a demat
suspense account with one of the Depository Participants, opened by the listed
entity for this purpose.
(2) For shares in physical form, the listed entity shall transfer all the shares into one
folio in the name of “Unclaimed Suspense Account” and shall dematerialise the
shares held in the Unclaimed Suspense Account with one of the Depository
Participants.
101
(3) The listed entity shall maintain details of shareholding of each individual allottee
whose shares are credited to such demat suspense account or unclaimed suspense
account, as applicable.
(4) The demat suspense account or unclaimed suspense account, as applicable shall
be held by the listed entity purely on behalf of the allottees who are entitled to the
shares and the shares held in such suspense account shall not be transferred in any
manner whatsoever except for the purpose of allotting the shares to the allottee as
and when he/she approaches the listed entity.
Provided that all such shares, in respect of which unpaid or unclaimed dividend has
been transferred under Section 124 (5) of the Companies Act, 2013, shall also be
transferred by the listed entity in accordance with Section 124 (6) of the Companies
Act, 2013 and rules made thereunder.
D. Procedure in case of claim by allottee

(1) As and when the allottee approaches the listed entity, the listed entity shall, after
proper verification of the identity of the allottee either credit the shares lying in
the Unclaimed Suspense Account or demat suspense account, as applicable, to
the demat account of the allottee to the extent of the allottee’s
entitlement, or deliver the physical certificates after re-materialising the same,
depending on what has been opted for by the allottee:
Provided that the rematerialising of the physical certificates shall be done only in
case where the shares were originally issued in physical form.
E. Dealing with Corporate Benefits (in terms of securities accruing) and Voting
Rights on such Unclaimed Shares
(1) Any corporate benefits in terms of securities accruing on such shares viz. bonus
shares, split etc., shall also be credited to such demat suspense account or
unclaimed suspense account, as applicable for a period of seven years and
thereafter shall be transferred by the listed entity in accordance with provisions
of Section 124(5) read with Section 124 (6) of the Companies Act, 2013 and
rules made thereunder.
(2) The voting rights on such unclaimed shares shall remain frozen till the rightful
owner claims the shares.
102
SCHEDULE VII: TRANSFER OF SECURITIES
A. REQUIREMENT OF PAN
(1) For registration of transfer of securities, the transferee(s) as well as transferor(s)

shall furnish a copy of their PAN card to the listed entity for registration of transfer
of securities.
(2) [***]146
(3) In cases where PAN card is not available i.e. in case of residents of Sikkim, the
requirement of PAN Card may be substituted with Identity proof.
(4) In case of mismatch in PAN card details as well as difference in maiden name and
current name, in case of married women, of the holder(s) of securities, the listed
entity may collect the PAN card as submitted by the transferee(s) or transferor(s)
as the case maybe:
Provided that this shall be subject to the listed entity verifying the veracity of the
claim of such transferee(s) or transferor(s) by collecting sufficient documentary
evidence in support of the identity of the transferee(s) or transferor(s).
B. DIFFERENCES IN SIGNATURE
(1) In case of minor differences in the signature of the transferor(s), the listed entity
shall follow the following procedure for registering transfer of securities:
(a) the listed entity shall promptly send to the first transferor(s), via speed post
an intimation of the aforesaid defect in the documents and inform the
transferor(s) that objection, supported by valid proof, is not lodged by the
transferor(s) with the listed entity within fifteen days of receipt of the listed
entity’s letter, then the securities shall be transferred;
(b) if the intimation to the transferor(s) is delivered and the objection from the
transferor(s) with supporting documents is not received within fifteen days,
the listed entity shall transfer the securities provided the listed entity does
not suspect fraud or forgery in the matter:
.
Provided that the listed entity shall maintain proof of delivery for in their record(s).
(2) In case of major differences in, or non-availability of, the signature of the
transferor(s), the listed entity shall follow the following procedure for registering
transfer of securities:
(a) The listed entity shall promptly send to the transferee(s), via Speed Post, an
Objection Memo along with the documents in original marking the reason as
“material signature difference/ non-availability of signature” and an advice to
146
Omitted by SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations,
2018, w.e.f. 08.06.2018. Prior to omission, sub-clause (2) read as follows-
“For securities market transactions and/or for off-market or private transactions involving transfer of shares
in physical form, the transferee(s) as well as transferor(s) shall furnish copy of PAN card to the listed entity
for registration of such transfer of securities.”
103
ensure submission of requested documents of the transferor(s);
(b) The listed entity shall also send a copy of the Objection memo as per clause
(a) of sub-para (2) to the transferor(s), via Speed Post, simultaneously;
(c) The above Objection Memo in clause (a) and (b) of sub-para (2) shall also
state the requirement of additional documents of transferor(s) as follows for
effecting the transfer:
(i) an Affidavit to update transferor(s) signature in its records;
(ii) an original unsigned cancelled cheque and banker’s attestation of the
transferor(s) signature and address);
(iii) contact details of the transferor(s) and ;
(d) If the intimation to both the transferor(s) and the transferee(s) are delivered,
requested documents of the transferor(s) are submitted to the listed entity and
the address attested by the bank tallies with the address available in the
database of listed entity, the listed entity, shall transfer the securities provided
the listed entity does not suspect fraud or forgery in the matter:
Provided that listed entity shall maintain proof of delivery in their record(s).
C. ADITIONAL DOCUMENTATION REQUIREMENTS IN CASE OF

TRANSMISSION OF SECURITIES
(1) In case of transmission of securities held in dematerialized mode, where the

securities are held in a single name without a nominee, for the purpose of
following simplified documentation, as prescribed by the depositories vide bye-
laws or operating instructions, as applicable, the threshold limit is rupees five
lakhs only per beneficiary owner account.
(2) In case of transmission of securities held in physical mode:

(a) where the securities are held in single name with a nominee:
(i) duly signed transmission request form by the nominee;
(ii) original or copy of death certificate duly attested by a notary public or by a
gazetted officer;
(iii) self attested copy of PAN card of the nominee.
147
[(b) where the securities are held in single name without a nominee, an
affidavit from all legal heir(s) made on appropriate non judicial stamp
147
Substituted by SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations,
2018, w.e.f. 16.11.2018. Prior to this, the point read as:
“(b) where the securities are held in single name without a nominee, a affidavit made on appropriate non judicial
stamp paper , to the effect of identification and claim of legal ownership to the securities shall be required and
additionally
(i) for value of securities, threshold limit of upto rupees two lakh only, per listed entity, as on date
of application, one or more of the following documents may be submitted :
1. No objection certificate from all legal heir(s) who do not object to such transmission
or copy of family settlement deed duly notarized or attested by a gazetted officer and
executed by all the legal heirs of the deceased holder;
2. indemnity made on appropriate non judicial stamp paper, indemnifying the listed
entity ;
104
paper, to the effect of identification and claim of legal ownership to
the securities shall be required;
Provided that in case the legal heir(s)/claimant(s) is named in the succession
certificate or probate of will or will or letter of administration, an affidavit
from such legal heir(s) / claimant(s) alone would be sufficient.
Provided further that:
(i) for value of securities, threshold limit of up to rupees two lakh
only, per listed entity, as on date of application, a succession
certificate or probate of will or will or letter of administration or court
decree, as may be applicable in terms of Indian Succession Act, 1925
may be submitted :
Provided that in the absence of such documents, the following
documents may be submitted:
1. no objection certificate from all legal heir(s) who do not object

to such transmission or copy of family settlement deed duly
notarized and executed by all the legal heirs of the deceased
holder;
2. an indemnity bond made on appropriate non judicial stamp
paper, indemnifying the Share Transfer Agent / listed entity;
(ii) for value of securities, more than rupees two lakh, per listed
entity, as on date of application, a succession certificate or probate of
will or will or letter of administration or court decree, as may be
applicable in terms of Indian Succession Act, 1925 shall be submitted;
(iii) the listed entity however, at its discretion, may enhance value of
securities, threshold limit, of rupees two lakh.]
(ii) for value of securities, threshold limit, more than rupees two lakh, per listed entity, as on date
of application, succession certificate or probate of will or letter of administration or court
decree shall be submitted;
(iii) the listed entity however, at its discretion, may enhance value of securities, threshold limit, of
rupees two lakh.”
105
SCHEDULE VIII [***]148
148
01.04.2016. Prior to omission, Schedule VIII read as follows:
‘MANNER OF REVIEWING FORM B ACCOMPANYING ANNUAL AUDITED RESULTS
[See Regulations 33(6) and 33(7) , 52(3)(b) and 52(3)(c) and 95]
A. REVIEW BY STOCK EXCHANGE(S)

The stock exchange(s) shall adopt the following procedure for reviewing the Form B and accompanying
annual audit reports submitted in terms of clause (d) of sub-regulation (3) of regulation 33 and clause (a) of
sub-regulation (3) of 52:
(1) Stock exchange(s) shall carry out preliminary scrutiny of reports accompanied by Form B
including seeking necessary explanation from the listed entity concerned and consider the same
based on materiality of the modified opinion(s).
(2) The parameters for ascertaining the materiality of modified opinion(s) shall be the impact of these
modified opinions on the profit and loss and financial position of the listed entity.
(3) For the purpose of uniformity, stock exchange(s) shall consult one another for deciding the criteria
for preliminary scrutiny.
(4) Further, stock exchange(s) shall also consult one another for distributing the work in case shares of
the listed entity concerned are listed on more than one stock exchange(s).
(5) Upon examining the audit reports based on the above parameters, stock exchange(s) shall refer
those cases, which, in their opinion, need further examination, to the Board.
(6) Stock exchange(s) shall display the list of listed entities which have filed their audit reports along
with Form B.
B. REVIEW BY THE QUALIFIED AUDIT REPORT REVIEW COMMITTEE

(1) The qualified audit report review committee shall be constituted by the board comprising of
representatives from Institute of Chartered Accountants of India, stock exchange(s), Ministry of
Corporate Affairs etc.
(2) The qualified audit report review committee shall review the cases received from the stock
exchange(s) and guide the Board in processing the annual audit reports with modified opinion(s).
(3) After analyzing the modified opinion(s) in audit reports, qualified audit report review committee
may make the following recommendations:
(a) If qualified audit report review committee is of the view that the impact of modified opinion
is not significant, it may recommend rectification of such modified opinion in the subsequent
financial year;
(b) If qualified audit report review committee is of the view that the impact of modified opinion is
significant and the explanation given by the listed entity concerned in Form B is
unsatisfactory, the case may be referred to the Financial Reporting Review Board of Institute
of Chartered Accountants of India, for their opinion on whether the modified opinion is
justified.
(c) Based on the opinion of the financial reporting review board, qualified audit report review
committee may recommend the following:
(i) If Financial Reporting Review Board opines that modified opinion is justified,
qualified audit report review committee may recommend submission of revised pro-
106
forma financial results, incorporating the effect of the modified opinion, to the stock
exchange(s) in the manner as specified in para (E) below.
(ii) If financial reporting review board is of the view that modified opinion is not
justified, Institute of Chartered Accountants of India may take up the matter
appropriately with the statutory auditor of the listed entity.
(d) If a modified opinion is not quantifiable, qualified audit report review committee may
recommend rectification of such modified opinion in the subsequent financial year.
C. Based on the recommendations of qualified audit report review committee and/or the opinion of
Financial Reporting Review Board, the Board may direct the listed entity concerned to rectify its
modified opinion and/or submit the revised pro-forma financial results in the manner specified in sub-
para (3) of para (B).
D. The Board may, at any stage, in the interest of investors, take any other necessary action as it deems fit.
E. SUBMISSION OF REVISED PRO-FORMA FINANCIAL RESULTS

(1) The listed entity shall undertake the following steps for submission of revised pro-forma financial
results:
(a) The listed entity shall submit revised pro-forma financial results, incorporating the effect of
the modified opinion, to the stock exchange(s) within two months from the date of receipt of
such direction from Board.
(b) The accounting impact of such modified opinion shall be carried out as a prior period item in
the financial statements of the subsequent financial year.
F.The review of all Form Bs and the accompanying annual audit reports shall be carried out twice a year
based on the reports received up to half year ending on June and December of every year and for this
purpose, the following timelines are prescribed:
Activity To be completed by
Filing of annual audit reports and Form A/Form B by the As per the regulations
listed entity
Preliminary scrutiny of the reports received during the half One month from the end of half year ending
year (January - June and July - December each year) by on June and December each year.
stock exchange(s) and referring cases to the Board
Review of the cases by qualified audit report review One month from the date of receipt of report
committee from the stock exchange(s).
Referring cases to Financial Reporting Review Board of Fifteen days from the date of decision of the
Institute of Chartered Accountants of India qualified audit report review committee
Receipt of reply from Financial Reporting Review Board One month from the date of referral by
qualified audit report review committee
Communication of decision on the case to the listed entity Fifteen days from the date of decision of
concerned and the stock exchange(s). qualified audit report review committee /
Financial Reporting Review Board
Submission of revised pro-forma financial results by the Within two months from the date of letter of
listed entity concerned. communication to the concerned entity.
’
107
SCHEDULE IX- AMENDMENTS TO OTHER REGULATIONS
[See regulation 100]
1. Amendment to Securities and Exchange Board of India (Issue of Capital and Disclosure
(i) For regulation 7 the following shall be substituted, namely:-

"Security Deposit.
7. (1) The issuer shall deposit, before the opening of subscription list, and keep
deposited with the stock exchange(s), an amount calculated at the rate of one per cent.
of the amount of securities offered for subscription to the public.
(2)The amount specified in sub-regulation (1) shall be deposited in the manner
specified by Board and/or stock exchange(s).
(3)The amount specified in sub-regulation (1) shall be refundable or forfeitable in the
manner specified by the Board."
(ii) In regulation 98, after clause (f), the following clauses shall be inserted, namely,-
"(g) the issuing company shall ensure that the underlying equity shares against
which IDRs are issued have been or will be listed in its home country before
listing of IDRs in stock exchange(s).
(h) the issuing company shall ensure that the underlying shares of IDRs shall
rank pari-passu with the existing shares of the same class."
(iii) In regulation 101, for sub-regulation (1) the following shall be substituted, namely:-
"(1) The issuing company shall appoint one or more merchant bankers, at least one of
whom shall be a lead merchant banker and shall also appoint other intermediaries, in
consultation with the lead merchant banker and shall enter into an agreement with the
merchant banker on the lines of format of agreement as specified in Schedule II."
(iv) After regulation 101 and before regulation 102, the following regulation shall be inserted,
namely:-
"Agreements with other intermediaries and others.
101A. (1) The issuing company shall appoint a registrar and transfer agent which has
connectivity with all the depositories.
(2)The issuing company shall enter into an agreement with overseas custodian bank and
domestic depository.
(3) The lead merchant banker, after independently assessing the capability of other
intermediaries and others to carry out their obligations, shall advise the issuing
company on their appointment."
108
(v) For regulation 102 the following shall be substituted, namely:-
“Display of bid data and issue of allotment letter.
102. (1) The stock exchange(s) offering online bidding system for the book building
process shall display on their website, the data pertaining to book built IDR issue, in
the format specified in Part B(2) of Schedule XI, from the date of opening of the bids
till at least three days after closure of bids.
(2) The issuing company shall ensure that letter of allotment for the IDRs are issued
simultaneously to all allottees and that in the event of it being impossible to issue
letters of regret at the same time, a notice to that effect be issued in the media so that
it appears on the morning after the letters of allotment have been dispatched.”
(vi) for regulation 106J the following shall be substituted, namely,-
Period of subscription and issue of allotment letter.

106J. (1) A rights issue shall be open for subscription in India for a period as
applicable under the laws of its home country but in no case less than ten days.
(2) The issuing company shall ensure that it sends the allotment letter of rights to IDR
Holders at the time they are sent to shareholders of the issuing company as per the
requirement of its home country or other jurisdictions where its securities are listed.
(vii) in regulation 106M, the words, number and symbol "regulation 7," shall be omitted.
(viii) Chapter XI shall be renumbered as Chapter XII.
(ix) Regulations 107, 108, 109, 110 and 111 shall be renumbered as 111, 112, 113, 114 and
115 respectively and any reference thereto in any regulation framed or any circular or
guideline issued by the Board shall be read accordingly.
(x) After Chapter X and before Chapter XII, the following Chapter shall be inserted, namely:-
"CHAPTER XI
LISTING OF SECURITIES ON STOCK EXCHANGES
In-principle approval of recognized stock exchange(s).

107. (1) The issuer or the issuing company, as the case may be, shall obtain in-
principle approval from recognised stock exchange as follows:
(a) in case of an initial public offer or an issue of Indian Depository Receipts
(hereinafter referred to as ‘IDRs’) , from all the recognised stock
exchange(s) on which the issuer or the issuing company, proposes to get its
specified securities or IDRs, as the case may be, listed; and
(b) in case of other issues, before issuance of further securities, as follows:
(i) where the securities are listed only on recognised stock exchange(s)
having nationwide trading terminals, from all such stock exchange(s);
(ii) where the securities are not listed on any recognised stock exchange
having nationwide trading terminals, from all the stock exchange(s) on
which the securities of the issuer are proposed to be listed;
(iii) where the specified are listed on recognised stock exchange(s) having
nationwide trading terminals as well as on the recognised stock
exchange(s) not having nationwide trading terminals, from all recognised
stock exchange(s) having nationwide trading terminals.
109
Application for Listing.
108. (1) The issuer or the issuing company, as the case may be, shall complete the
pre-listing formalities within the time lines specified by the Board from time to time.
(2) The issuer or the issuing company, as the case may be, shall, make an application
for listing, within twenty days from the date of allotment, to one or more recognized
stock exchange(s) along with the documents specified by stock exchange(s) from time
to time.
(3) In case of delay in making application for listing beyond twenty days from the date
of allotment, the issuer or the issuing company, as the case may be, shall pay penal
interest to allottees for each day of delay at the rate of atleast ten per cent. per annum
from the expiry of thirty days from date of allotment till the listing of such securities
to the allottees.
(4) In the event of non-receipt of listing permission from the stock exchange(s) by the
issuer or the issuing company, as the case may be, or withdrawal of Observation
Letter issued by the Board, wherever applicable, the securities shall not be eligible for
listing and the issuer or the issuing company, as the case may be, shall be liable to
refund the subscription monies, if any, to the respective allottees immediately
alongwith interest at the rate of ten per cent. per annum from the date of allotment.
Listing Agreement.
109. (1) Every issuer or the issuing company desirous of listing its securities on a
recognised stock exchange shall execute a listing agreement with such stock
exchange.
(2) Every issuer or the issuing company which has previously entered into
agreement(s) with a recognised stock exchange to list its securities shall execute a
fresh listing agreement with such stock exchange within six months of the date of
notification of Securities and Exchange Board of India (Listing Obligations and
Obligation of stock exchange(s).

110. The stock exchange(s) shall grant in-principle approval/list the securities or
reject the application for in-principle approval /listing by the issuer or issuing
company, as the case maybe, within thirty days from the later of the following dates:
(a) the date of receipt of application for in-principle approval/listing from issuer
or the issuing company, as the case may be,;
(b) the date of receipt of satisfactory reply from the issuer or the issuing
company, as the case may be, in cases where the stock exchange(s) has sought
any clarification from them."
110
(xi) In Schedule VIII, in part E in clause 5, in item XVI, after sub-item B and before sub-item
C, the following sub-item shall be inserted, namely:-
"(BA) Dealing with Fractional Entitlement: Manner of dealing with fractional
entitlement viz. payment of the equivalent of the value, if any, of the fractional
rights in cash etc."
(xii) In Schedule XIX, in part A, in item 13, after sub-item(e), the following sub-item shall be
inserted, namely:-
"(f) Different classes of shares based on different criteria, if any."
(xiii) In Schedule XIX, in part A, in item 14, before sub-item (a), the following general
instructions shall be inserted, namely:-
General Instructions:
(1) The format of disclosure of financial results may be as per the disclosure
requirements of the issuing company in the home country where the Issuing
Company is listed.
(2) The issuing company shall intimate to the investors in the offer document the
type of disclosures that it will follow i.e. whether as per Indian GAAP, IFRS or
US GAAP and any change in such format shall be informed to the IDR Holders
by way of notices to the stock exchange.
(xiv) In Schedule XIX, in Part B, in item 2, after sub-item (d), the following sub-item shall
be inserted, namely:-
"(e) Different classes of shares based on different criteria, if any."
(xv) In Schedule XX in the reference title the number “110” shall be substituted, with the
number “114”.
2. Amendment to Securities and Exchange Board of India (Issue and Listing of Debt
Securities) Regulations, 2008.
(i) After regulation 12 and before regulation 13, the following regulation shall be inserted,
namely:-
"Allotment of securities and payment of interest.

12A. (1) The Issuer shall ensure that that in case of listing of debt securities issued to
public, allotment of securities offered to public shall be made within thirty days of the
closure of the public issue.
(2) Where the debt securities are not allotted and/or application moneys are not refunded
within the stipulated period in sub-regulation (1), the issuer shall undertake to pay
interest at the rate of fifteen per cent. per annum.
(3) Credit to demat accounts of the allottees shall be made within two working days from
the date of allotment.”
111
(ii) After regulation 19 and before regulation 20, the following regulations shall be inserted,
namely:-
"Listing Agreement.
19A. (1) Every issuer desirous of listing its debt securities on a recognised stock
exchange shall execute an agreement with such stock exchange.
(2) Every issuer which has previously entered into agreements with a recognised stock
exchange to list its debt securities shall execute a fresh listing agreement with such
stock exchange within six months of the date of notification of Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Security Deposit.
19B. (1) The issuer shall deposit, before the opening of subscription list, and keep
deposited with the stock exchange(s) an amount calculated at the rate of one per cent. of
the amount of securities offered for subscription to the public.
(2)The amount stipulated in sub-regulation (1) shall be deposited in the manner
specified by Board and/or stock exchange(s).
(3)The amount stipulated in sub-regulation (1) shall be refundable or forfeitable in the
(iii) For regulation 23, the following shall be substituted, namely:-

“Continuous Listing Conditions.
23. All the issuers making public issues of debt securities or seeking listing of debt
securities issued on private placement basis shall comply with the conditions of listing
specified in the respective listing agreement for debt securities.”
3. Amendment to Securities and Exchange Board of India(Issue and Listing of Non-

Convertible Redeemable Preference Shares) Regulations, 2013.
(i) After regulation 16 and before regulation 17, the following regulations shall be inserted,
namely:-
"Listing Agreement.
16A. (1) Every issuer desirous of listing its non-convertible redeemable preference shares,
or perpetual non-cumulative preference shares or innovative perpetual debt instruments
on a recognised stock exchange, shall execute an agreement with such stock exchange.
(2) Every issuer which has previously entered into agreements with a recognised stock
exchange to list non-convertible redeemable preference shares, or perpetual non-
cumulative preference shares or innovative perpetual debt instruments shall execute a
fresh listing agreement with such stock exchange within six months of the date of
notification of Securities and Exchange Board of India (Listing Obligations and
Security Deposit.
112
(2)The amount stipulated in sub-regulation (1) shall be deposited in the manner specified
by Board and/or stock exchange(s).
manner specified by the Board.”
(ii) In regulation 20, sub-regulations (2) and (3) shall be omitted.
(iii) In Schedule I, in para. III, in sub-para (ii), under the heading “Delay in Dispatch of
Allotment Letters or Refund Orders” after the word and sign "closure." and before the words
"The issuer further agrees", the following shall be inserted, namely:-
"Issuer agrees that credit to demat accounts of the allottees shall be made within two
working days from the date of allotment."
4. Amendment to Securities and Exchange Board of India (Public Offer and Listing of
Securitised Debt Instruments) Regulations, 2008.
(i) In regulation 31, after sub-regulation (8), the following sub-regulation shall be inserted,
namely:-
"(9) Credit to demat accounts of the allottees shall be made by the issuer within two
working days from the date of allotment.”
(ii) After regulation 35 and before regulation 36, the following regulation shall be inserted,
namely:-
"Listing Agreement.
35A. (1) Every special purpose distinct entity desirous of listing securitised debt
instruments on a recognised stock exchange, shall execute an agreement with such stock
exchange.
(2) Every special purpose distinct entity which has previously entered into agreements
with a recognised stock exchange to list securitised debt instruments shall execute a fresh
listing agreement with such stock exchange within six months of the date of notification
of Securities and Exchange Board of India (Listing Obligations and Disclosure
Security Deposit.
(2)The amount stipulated in sub-regulation (1) shall be deposited in the manner specified
by Board and/or stock exchange(s)(s).
(iii) In regulation 36, sub-regulation (3) shall be substituted with the following, namely:-
"(3) In case of a private placement of securitised debt instruments, the special purpose
distinct entity shall file listing particulars with the recognised stock exchange, along with
the application made under sub-regulation (1) of regulation 35, containing such
information as may be necessary for any investor in the secondary market to make an
113
informed investment decision in respect of its securitised debt instruments and the special
purpose distinct entity shall promptly disseminate such information, as prescribed, in such
manner as the recognised stock exchange(s) may determine from time to time ".
(iv) For regulation 37, the following shall be substituted, namely:-

“Continuous listing conditions.
37. The special purpose distinct entity or trustee thereof shall submit such information,
including financial information relating to the schemes, to the stock exchanges and
investors and comply with such other continuing obligations as may be stipulated in the
listing agreement.”
5. Amendment to Securities and Exchange Board of India (Mutual Funds) Regulations,

1996.
After regulation 31, the following regulation shall be inserted, namely:-
“In-principle approval from recognised stock exchange(s).
31A. The listed entity, which intends to list units of its scheme on the recognised stock
exchange(s), shall obtain ‘in-principle’ approval from recognised stock exchange(s) in the
manner as specified by the recognised stock exchange(s) from time to time.
Listing Agreement.
31B. (1) Every mutual fund desirous of listing units of its schemes on a recognised stock
exchange shall execute an agreement with such stock exchange.
(2) Every mutual fund which has previously entered into agreements with a recognised
stock exchange to list units of its schemes shall execute a fresh listing agreement with
such stock exchange within six months of the date of notification of Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015."
114
SCHEDULE X- LIST OF SEBI CIRCULARS WHICH STAND RESCINDED
[See Regulation 103]
S.No Number Dated Subject

1. SE/2376 April 3, 1992 Amendment to Clause 41 of Listing Agreement
2. SE/2936 April 6, 1992 1% Listing Deposit
3. SMD/SED/N/JJ/4984/94 September 23, 1994 Submission of B/S & details of utilisation of funds,
etc.- Cl32 and 43 of LA
4. SMD/SED/CIR/94/6669 October 31, 1994 Forfeiture of 1% Listing Deposit
5. SMD-I(N)/JJ/2331/95 June 26, 1995 Submission of Cash Flow Statement.
6. SMD-I(N)/JJ/2621/95 July 11, 1995 Effective Year of Submission of Cash Flow

Statement
7. SMD/RCG/JJ/1819/96 May 15, 1996 Allotment within 30 days- amendment to LA
8. 03/SMD/96 May 17, 1996 Amendment to Clause 32 of the Listing Agreement.

9. RRTI CIRCULAR NO.2 (97-98) June 4, 1997 Payment of dividend/Interest rounded off to the
nearest rupee
10. SMD/POLICY/CIR-22/97 September 22, 1997 Amendment to the Listing Agreement Clause 40A
and 40B amendment
11. SMD/POLICY/CIR- 06/98 February 12, 1998 Amendment in the Listing Agreement Transfer of
shares - R Chandrasekaran committee
12. SMD/Policy/CIR-12/98 April 07, 1998 Amendment to Listing Agreement Clause 36 and 41
- Bhave Committee
13. SMD/POLICY/CIR-13/98 April 16, 1998 Amendment to Listing Agreement price sensitive
information
14. SMD/POLICY/CIR-26/97 September 17, 1998 Quarterly results - Mutual Fund providing quarterly
results will not be applicable to a Mutual Fund
15. SMD/POLICY CIR-04/99 March 8, 1999 Listing Agreement – Amendment Clause 32 and
Clause 41 - status on the Y2K preparedness level
16. SMDRP/CIR-07/99 April 9, 1999 Trading and settlement of trades in dematerialised
securities notice period about book-closure / record
date - 42 to 30 days
17. SMDRP/POLICY/CIR- 8 /99 April 26, 1999 Listing Agreement – Amendment Clause 32 and
Clause 41 related to disclosure of turnover and
income from new business subsequent to change in
name - software/information technology business.
18. SMD/POLICY/CIR-12/99 May 18, 1999 Listing Agreement – Amendment Compliance
Officer shall be the Company Secretary - Malegam
Commitee
19. SMDRP/POLICY/CIR-14/98 May 19, 1999 Listing Agreement – Amendment Submission of
complete Balance Sheet - Clause 32
20. SMD/POLICY/CIR-18/99 July 01, 1999 Listing Agreement – Amendment company shall
publish/submit the audited results within two months
from the end of the last quarter of the financial year
21. SMD/POLICY/CIR-24/99 July 14, 1999 Listing Agreement – Amendment provide correct
and adequate information to Credit Rating Agencies
22. SMD-II/POLICY/CIR - 08 /2000 February 04, 2000 Amendments to the Listing Agreement
23. SMDRP/POLICY/CIR-10/2000 February 21, 2000
24. SMDRP/POLICY/CIR-13/2000 March 09, 2000
25. SMD-II/Policy/Cir- 14/2000 April 06, 2000 Amendments to the Listing Agreement
26. SMDRP/POLICY/CIR-15/2000 April 10, 2000 Reduction in the no delivery period at exchanges
27. SMDRP/POLICY/Cir-21/2000 May 10, 2000 Clause 43 of the Listing Agreement - Statement on
utilisation of funds
28. PMIMD/8755/2000 May 31, 2000 Reference of cases for relaxation of Rule 19(2)(b) of
Securities Contract (Regulation) Act, 1957
29. SMD/POLICY/CIR-26/2000 July 04, 2000 Amendment to the Listing Agreement
30. SMDRP/Policy/Cir-30 /00 July 25, 2000 Amendment to the Listing Agreement
115
31. SMDRP/POLICY/CIR- 35/2000 August 04, 2000
32. SMDRP/POLICY/ CIR-42/2000 September 12, 2000 Listing Agreement – Amendments to Clause 49
33. SMDRP/POLICY/CIR-55/00 December 06, 2000
34. SMDRP/POLICY/ CIR- 03/01 January 22, 2001 Enforcement of Corporate Governance
35. SMDRP/POLICY/ CIR-7/01 February 01, 2001 Distribution of Share Holding

36. SMDRP/Policy/Cir-15 /2001 March 08, 2001 Listing of further issue of capital
37. SMDRP/POLICY/ CIR- 28/01 May 02, 2001 Non-promoter holding on a continuous basis and
minimum number of shareholders
38. SMDRP/Policy/Cir- 29 /01 May 22, 2001 Practice of granting conditional listing permission
39. SMDRP/Policy/Cir-44 /01 August 31 , 2001 Amendment to the Listing Agreement
40. SMDRP/POLICY/CIR-46/2001 September 27, 2001 Delay in transfer of shares by companies
41. SMDRP/Policy/Cir- 47 /01 October 04, 2001 Amendment the Listing Agreement
42. DCC/FITTCIR-3//2001 October 15, 2001 facility of ECS for distributing dividends or other
cash benefits
43. SMDRP/Policy/Cir- 48 /2001 October 19, 2001 Segment Reporting in Quarterly Financial Results
under Clause 41 of the Listing Agreement
44. SMDRP/POLICY/ CIR- 53 /01 Dec 31, 2001 Amendments to Clause 49 of the Listing Agreement
45. SMD/POLICY/ CIR- 1 /02 January 02, 2002 Sub: Amendments to the Listing Agreement
46. SMD/Policy/Cir-10/2002 May 07, 2002 Amendment to the Listing Agreement
47. SMD/Policy/Cir-11 /02 May 10, 2002 Amendment to the Listing Agreement
48. SMD/POLICY/Cir-13/02 June 20, 2002 Electronic Data Information Filing And Retrieval
(EDIFAR)
49. SMD/Policy/Cir-16 /2002 June 26, 2002
50. SMD/POLICY/Cir-17/02 July 3, 2002 Electronic Data Information Filing and Retrieval
system (EDIFAR).
51. SMD/Policy/Cir-23 /02 September 17, 2002 Electronic Data Information Filing And Retrieval
(EDIFAR)
52. SMD/Policy/Cir- 27 /02 December 20, 2002 Electronic Data Information Filing And Retrieval
(EDIFAR)
53. SMD/Policy/Cir-2 /2003 January 10, 2003 Amendment to Listing Agreement – Clause 32 and
Clause 41.
54. SMD/Policy/Listing/Cir-5/2003 February 12, 2003 Non-compliance of provisions of listing agreement.
55. SEBI/SMD/Policy/List/Cir -17/2003 May 08, 2003 Amendment to the listing agreement regarding
disclosure pertaining to schemes of
arrangement/merger/amalgamation /reconstruction
filed before the Court
56. SEBI/SMD/SE/Cir-23/2003/18/06 June 02, 2003 Electronic Data Information Filing And Retrieval
(EDIFAR)
57. SEBI/SMD/SE/25/2003/ 19 /06 June 19, 2003 Listing Fees
58. SEBI/MRD/SE/31/2003/26/08 August 26, 2003 Corporate Governance in listed Companies – Clause
49 of the Listing Agreement
59. MRD/Policy/Cir – 35 /2003/29/09 September 29, 2003 Listing of further issue of capital
60. SEBI/MRD/SE/AT/36/2003/30/09 September 30, 2003 Secondary Market for Corporate Debt Securities.
61. SEBI/CFD/DIL/SE/43/2003 November 20, 2003 Reduction in Notice Period for fixing the Book
closure/Record date
62. SEBI/MRD/SE/AT/46/2003 December 22, 2003 Secondary Market for Corporate Debt Securities -
Clarifications
63. SEBI/MRD/Policy/AT/Cir-20/2004 April 30, 2004 Frequent change of names by listed companies
64. SEBI/CFD/DIL/CG/1/2004/12/10 October 29, 2004 Corporate Governance in listed Companies – Clause
65. SEBI/CFD/DIL/CIR- 39 /2004/11/01 November 01, 2004 Model Listing Agreement for listing of Debt
Securities
66. SEBI/DNPD/CIR-28/2004/12/07 December 08, 2004 Amendments to Clause 16 of the Equity Listing
Agreement – Requirement of Notice Period
67. SEBI/CFD/DIL/CG/1/2005/29/3 March 29, 2005 Corporate Governance – Clause 49 of the Listing
Agreement
68. SEBI/CFD/DIL/CG/1/2006/13/1 January 13, 2006 Corporate Governance in listed Companies – Clause
69. SEBI/CFD/DIL/IDR/1/2006/3/4 April 03, 2006 Listing Agreement for Indian Depository Receipts
(IDRs)
70. SEBI/CFD/DIL/LA/2006/13/4 April 13, 2006 Amendments to Clause 40A and Clause 35 of Equity
Listing Agreement
116
71. SEBI/CFD/DIL/LA/1/2007/20/03 March 20, 2007 Amendments to the Listing Agreement for
Debentures
72. SEBI/CFD/DIL/LA/2/2007/ 26/4 April 26, 2007 Amendments to Clause 32 of Equity Listing
Agreement
73. SEBI/CFD/DIL/LA/3/2007/10/07 July 10, 2007 Amendments to Clause 41 of Equity Listing
Agreement
74. MIRSD/DPS III//Cir- 11/07 August 06, 2007 Dissemination of Information on Debentures
75. SEBI/CFD/DIL/LA/4/2007/27/12 December 27, 2007 Amendments to Equity Listing Agreement
76. SEBI/CFD/DIL/CG/1/2008/08/04 April 08, 2008 Corporate Governance in listed Companies – Clause
77. SEBI/CFD/DIL/LA/ 5/2008/4/09 September 04, 2008 Amendment in Equity Listing Agreement
78. SEBI/CFD/DIL/CG/2/2008/23/10 October 23, 2008 Corporate Governance in listed Companies – Clause
79. SEBI/CFD/DIL/LA/2009/3/2 February 03, 2009 Amendments to Equity Listing Agreement
80. SEBI/CFD/DIL/LA/1/2009/24/04 April 24, 2009 Amendments to the Equity Listing Agreement
81. SEBI/IMD/BOND/1/2009/11/05 May 11, 2009 Simplified Listing Agreement for Debt Securities
82. MRD/DoP/ Cir-05/2009 May 20, 2009 PAN requirement for transfer of shares in physical
form
83. SEBI/CFD/DIL/IDR/1/2009/16/06 June 16, 2009 Model Listing Agreement for listing of Indian
Depository Receipts (IDRs)
84. MRD/DoP/SE/Cir-07/2009 July 21, 2009 Abolition of no-delivery period for all types of
corporate actions.
85. SEBI/CFD/DIL/LA/2/2009/21/7 July 21, 2009 Amendments to the Equity Listing Agreement-
Clause 28A
86. SEBI/CFD/DIL/LA/3/2009/03/09 September 03, 2009 Amendments to Equity Listing Agreement
87. SEBI/IMD/DOF-1/BOND/Cir-5/2009 November 26, 2009 Simplified Debt Listing Agreement for Debt
Securities - Amendments
88. SEBI/IMD/DOF-1/BOND/Cir-1/2010 January 07, 2010 Simplified Debt Listing Agreement for Debt
Securities - Amendments
89. SEBI/MRD/DoP/SE/RTA/Cir-03/2010 January 07, 2010 PAN requirement for transmission of shares in
physical form
90. CIR/CFD/DIL/1/2010 April 05, 2010 Listing Conditions-Amendments to the Equity
Listing Agreement
91. CIR/CFD/DCR/3/2010 April 16, 2010 Discontinuation of Electronic Data
Information Filing and Retrieval (EDIFAR) System.
92. Cir/ CFD /DCR/5 /2010 May 07, 2010 Making Annual Reports of Listed Companies easily
accessible Making Annual Reports of Listed
Companies easily accessible
93. CIR/CFD/DIL/6/2010 May 17, 2010 Conditions of listing for issuers seeking listing on
SME Exchange - Model SME Equity Listing
Agreement
94. SEBI/Cir/ISD/ 2 /2010 October 26, 2010 Clarification on Trading Rules and shareholding in
dematerialized mode
95. CIR/CFD/DIL/10/2010 December 16, 2010 Amendment to Equity Listing Agreement
96. Cir. /IMD/DF/5/2011 March 16, 2011 Listing Agreement for Securitized Debt Instruments
97. CIR/CFD/DIL/3/2011 June 03, 2011 Redemption of Indian Depository Receipts (IDRs)
into Underlying Equity Shares
98. CIR/MRD/DP/ 07 /2011 June 16, 2011 Change of Name by Listed Companies
99. Cir/ISD/ 3/2011 June 17, 2011 Shareholding of promoter / promoter group to be in
dematerialized mode
100. SEBI/Cir/ISD/ 05 /2011 September 30, 2011 Clarification on 100% promoter holding in demat
form
101. CIR/CFD/DIL/7/2011 October 05, 2011 Amendments to the Equity, IDR and SME Equity
Listing Agreements
102. CIR/CFD/DIL/1/2012 February 08, 2012 Amendment to Clause 40A and 43 of Equity Listing
Agreement
103. SEBI/Cir/ISD/ 1 /2012 March 30, 2012 Exemptions from 100% promoter(s) holding in
demat form
104. CIR/CFD/DIL/4/2012 April 16, 2012 Amendments to the Equity Listing Agreement -
Formats for Disclosure of Financial
Results
105. CIR/MIRSD/8 /2012 July 05 , 2012 Reduction of Time-line for Transfer of Equity
Shares and Prescription of Time-line for Transfer of
117
Debt Securities
106. CIR/CFD/DIL/6/2012 July 13, 2012 Amendments to the Equity Listing Agreement -
Platform for E-Voting by Shareholders of Listed
Entities
107. CIR/CFD/DIL/7/2012 August 13, 2012 Manner of Dealing with Audit Reports filed by
Listed Companies
108. CIR/OIAE/1/2012 August 13, 2012 Redressal of investor grievances against listed
companies in SEBI Complaints Redress System
(SCORES).
109. CIR/CFD/DIL/8/2012 August 13, 2012 Business Responsibility Reports
110. CIR/CFD/DIL/10/2012 August 28, 2012 Redemption of Indian Depository Receipts (IDRs)
into Underlying Equity Shares
111. CIR/CFD/DIL/11/2012 August 29, 2012 Manner of achieving minimum public shareholding
requirements in terms of SCRR, 1957
112. CIR/CFD/DIL/2/2013 January 03, 2013 Clarification on Clause 36 of the Equity Listing
Agreement
113. CIR/CFD/DIL/3/2013 January 17, 2013 Amendment to ESOP
114. CIR/CFD/DIL/5/2013 February 04, 2013 Scheme of Arrangement under the Companies Act,
1956 – Revised requirements for the Stock
Exchanges and Listed Companies
115. CIR/CFD/DIL/6/2013 March 01, 2013 Guidelines for Enabling Partial Two-Way
Fungibility of Indian Depository Receipts (IDRs)
116. CIR/MRD/DP/10/2013 March 21, 2013 Sub: Usage of electronic payment modes for
making cash payments to the investors
117. CIR/CFD/DIL/7/2013 May 13, 2013 ESOP - Clarification
118. CIR/CFD/DIL/8/2013 May 21, 2013 Scheme of Arrangement under the Companies Act,
1956 – Revised requirements for the Stock
Exchanges and Listed Companies - Clarification
119. CIR/CFD/DIL/9/2013 June 05, 2013 Manner of Dealing with Audit Reports filed by
Listed Companies"- Clarification
120. CIR/MRD/ DSA / 31 /2013 September 30, 2013 Standard Operating Procedure
121. CIR/CFD/POLICYCELL/13/2013 November 18, 2013 Compliance with the provisions of Equity Listing
Agreement by listed companies – Monitoring by
Stock Exchanges
122. CIR/CFD/POLICYCELL/14/2013 November 29, 2013 ESOP – Clarification- Extension of time line for
alignment
123. CIR/CFD/DIL/1/2014 March 25, 2014 Format for Auditors’ Certificate required under
Clause 24(i) of the Equity Listing Agreement
124. CIR/CFD/POLICY CELL/2/2014 April 17, 2014 Corporate Governance in listed entities -
Amendments to Clauses 35B and 49 of the Equity
Listing Agreement
125. CIR/CFD/POLICYCELL/3/2014 June 27, 2014 ESOP – Clarification- Extension of time line for
alignment
126. CIR/CFD/DIL/4/2014 August 01, 2014 Monitoring of Compliance by Stock Exchanges
127. CIR/CFD/POLICY CELL/7/2014 September 15, 2014 Corporate Governance in listed entities -
Amendments to Clause 49 of the Equity Listing
Agreement
128. CIR/CFD/CMD/1/2015 April 08, 2015 Fine structure for non-compliance with the
requirement of Clause 49(II)(A)(1) of Listing
Agreement
118
149[Schedule XI – Fee in respect of draft scheme of arrangement
[see regulations 37 and 94]
1. The listed entity shall, along with the draft scheme of arrangement, remit fee at the
rate of 0.1% of the paid-up share capital of the listed/transferee/resulting company,
whichever is higher, post sanction of the scheme, subject to a cap of `5,00,000/-.
2. The fee specified in clause 1 shall be paid by way of direct credit to the bank account
of the Board through NEFT/RTGS/IMPS or any other mode allowed by RBI or by
means of a demand draft in favour of “Securities and Exchange Board of India”
payable at Mumbai.]
U.K. SINHA
CHAIRMAN
****************
149
Inserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, w.e.f.
6.3.2017.
119
THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999
_________
ARRANGEMENT OF SECTIONS
__________
CHAPTER I
PRELIMINARY
SECTIONS
1. Short title, extent, application and commencement.
2. Definitions.
CHAPTER II
REGULATION AND MANAGEMENT OF FOREIGN EXCHANGE
3. Dealing in foreign exchange, etc.
4. Holding of foreign exchange, etc.
5. Current account transactions.
6. Capital account transactions.
7. Export of goods and services.
8. Realisation and repatriation of foreign exchange.
9. Exemption from realisation and repatriation in certain cases.
CHAPTER III
AUTHORISED PERSON
10. Authorised person.
11. Reserve Bank’s powers to issue directions to authorised person.
12. Power of Reserve Bank to inspect authorised person.
CHAPTER IV
CONTRAVENTION AND PENALTIES
13. Penalties.
14. Enforcement of the orders of Adjudicating Authority.
14A. Power of recover arrears of penalty.
15. Power to compound contravention.
CHAPTER V
ADJUDICATION AND APPEAL
16. Appointment of Adjudicating Authority.
17. Appeal to Special Director (Appeals).
18. Appellate Tribunal.
19. Appeal to Appellate Tribunal.
20. [Omitted.]
21. Qualifications, for appointment of Special Director (Appeals).
22. [Omitted.]
23. Terms and Conditions of service Special Director (Appeals).
24. [Omitted.]
1
SECTIONS
25. [Omitted.]
26. [Omitted.]
27. Staff of Special Director (Appeals).
28. Procedure and powers of Appellate Tribunal and Special Director (Appeals).
29. [Omitted.]
30. [Omitted.]
31. [Omitted.]
32. Right of appellant to take assistance of legal practitioner or chartered accountant and of
Government, to appoint presenting officers.
33. Officers and Employees etc., to be public servant.
34. Civil court not to have jurisdiction.
35. Appeal to High Court.
CHAPTER VI
DIRECTORATE OF ENFORCEMENT
36. Directorate of Enforcement.
37. Power of search, seizure, etc.
37A. Special provisions relating to assets held outside India in contravention of section 4.
38. Empowering other officers.
CHAPTER VII
MISCELLANEOUS
39. Presumption as to documents in certain cases.
40. Suspension of operation of this Act.
41. Power of Central Government to give directions.
42. Contravention by companies.
43. Death or insolvency in certain cases.
44. Bar of legal proceedings.
45. Removal of difficulties.
46. Power to make rules.
47. Power to make regulations.
48. Rules and regulations to be laid before Parliament.
49. Repeal and saving.
2
THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999
ACT NO. 42 OF 1999
[29th December, 1999.]
An Act to consolidate and amend the law relating to foreign exchange with the objective of
facilitating external trade and payments and for promoting the orderly development and
maintenance of foreign exchange market in India.
BE it enacted by Parliament in the Fiftieth Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. Short title, extent, application and commencement.—(1) This Act may be called the Foreign
Exchange Management Act, 1999.
(3) It shall also apply to all branches, offices and agencies outside India owned or controlled by a
person resident in India and also to any contravention thereunder committed outside India by any person
to whom this Act applies.
(4) It shall come into force on such date1 as the Central Government may, by notification in the
Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and any reference in
any such provision to the commencement of this Act shall be construed as a reference to the coming into
force of that provision.
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “Adjudicating Authority” means an officer authorised under sub-section (1) of section 16;
2
[(b) “Appellate Tribunal” means the Appellate Tribunal referred to in section 18;]
(c) “authorised person” means an authorised dealer, money changer, off-shore banking unit or
any other person for the time being authorised under sub-section (1) of section 10 to deal in foreign
exchange or foreign securities;
[(cc) “Authorised Officer” means an officer of the Directorate of Enforcement authorised by the
3
Central Government under section 37A;]

(d) “Bench” means a Bench of the Appellate Tribunal;
(e) “capital account transaction” means a transaction which alters the assets or liabilities, including
contingent liabilities, outside India of persons resident in India or assets or liabilities in India of
persons resident outside India, and includes transactions referred to in sub-section (3) of section 6;
(f) “Chairperson” means the Chairperson of the Appellate Tribunal;
(g) “chartered accountant” shall have the meaning assigned to it in clause (b) of sub-section (1) of
section 2 of the Chartered Accountants Act, 1949 (38 of 1949);
3
[(gg) “Competent Authority” means the Authority appointed by the Central Government under
sub-section (2) of section 37A;]
(h) “currency” includes all currency notes, postal notes, postal orders, money orders, cheques,
drafts, travellers cheques, letters of credit, bills of exchange and promissory notes, credit cards or such
other similar instruments, as may be notified by the Reserve Bank;
1. 1st June, 2000, vide notification No. G.S.R. 371(E), dated 1st May, 2000, see Gazette of India, Extraordinary, Part II,
sec. 3(i).
2. Subs. by Act 7 of 2017, s. 165, for clause (b) (w.e.f. 26-5-2017).
3. Ins. by Act 20 of 2015, s. 138 (w.e.f. 9-9-2015).
3
(i) “currency notes” means and includes cash in the form of coins and bank notes;
(j) “current account transaction” means a transaction other than a capital account transaction and
without prejudice to the generality of the foregoing such transaction includes,—
(i) payments due in connection with foreign trade, other current business, services, and
short-term banking and credit facilities in the ordinary course of business,
(ii) payments due as interest on loans and as net income from investments,
(iii) remittances for living expenses of parents, spouse and children residing abroad, and
(iv) expenses in connection with foreign travel, education and medical care of parents, spouse
and children;
(k) “Director of Enforcement” means the Director of Enforcement appointed under sub-section (1)
of section 36;
(l) “export”, with its grammatical variations and cognate expressions, means—
(i) the taking out of India to a place outside India any goods,
(ii) provision of services from India to any person outside India;
(m) “foreign currency” means any currency other than Indian currency;
(n) “foreign exchange” means foreign currency and includes,—
(i) deposits, credits and balances payable in any foreign currency,
(ii) drafts, travellers cheques, letters of credit or bills of exchange, expressed or drawn in Indian
currency but payable in any foreign currency,
(iii) drafts, travellers cheques, letters of credit or bills of exchange drawn by banks, institutions
or persons outside India, but payable in Indian currency;
(o) “foreign security” means any security, in the form of shares, stocks, bonds, debentures or any
other instrument denominated or expressed in foreign currency and includes securities expressed in
foreign currency, but where redemption or any form of return such as interest or dividends is payable in
Indian currency;
(p) “import”, with its grammatical variations and cognate expressions, means bringing into India
any goods or services;
(q) “Indian currency” means currency which is expressed or drawn in Indian rupees but does not
include special bank notes and special one rupee notes issued under section 28A of the Reserve Bank of
India Act, 1934 (2 of 1934);
(r) “legal practitioner” shall have the meaning assigned to it in clause (i) of sub-section (1) of
section 2 of the Advocates Act, 1961 (25 of 1961);
(s) “Member” means a Member of the Appellate Tribunal and includes the Chairperson thereof;
(t) “notify” means to notify in the Official Gazette and the expression “notification” shall be
construed accordingly;
(u) “person” includes—
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated or not,
(vi) every artificial juridical person, not falling within any of the preceding sub-clauses, and
(vii) any agency, office or branch owned or controlled by such person;
4
(v) “person resident in India” means—
(i) a person residing in India for more than one hundred and eighty-two days during the
course of the preceding financial year but does not include—
(A) a person who has gone out of India or who stays outside India, in either case—
(a) for or on taking up employment outside India, or
(b) for carrying on outside India a business or vocation outside India, or
(c) for any other purpose, in such circumstances as would indicate his intention to
stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than—
(a) for or on taking up employment in India, or
(b) for carrying on in India a business or vocation in India, or
(c) for any other purpose, in such circumstances as would indicate his intention to
stay in India for an uncertain period;
(ii) any person or body corporate registered or incorporated in India,
(iii) an office, branch or agency in India owned or controlled by a person resident outside
India,
(iv) an office, branch or agency outside India owned or controlled by a person resident in
India;
(w) “person resident outside India” means a person who is not resident in India;
(x) “prescribed” means prescribed by rules made under this Act;
(y) “repatriate to India” means bringing into India the realised foreign exchange and—
(i) the selling of such foreign exchange to an authorised person in India in exchange for
rupees, or
(ii) the holding of realised amount in an account with an authorised person in India to the
extent notified by the Reserve Bank,
and includes use of the realised amount for discharge of a debt or liability denominated in foreign
exchange and the expression “repatriation” shall be construed accordingly;
(z) “Reserve Bank” means the Reserve Bank of India constituted under sub-section (1) of section 3
of the Reserve Bank of India Act, 1934 (2 of 1934);
(za) “security” means shares, stocks, bonds and debentures, Government securities as defined in the
Public Debt Act, 1944 (18 of 1944), savings certificates to which the Government Savings Certificates
Act, 1959 (46 of 1959) applies, deposit receipts in respect of deposits of securities and units of the Unit
Trust of India established under sub-section (1) of section 3 of the Unit Trust of India Act, 1963
(52 of 1963) or of any mutual fund and includes certificates of title to securities, but does not include
bills of exchange or promissory notes other than Government promissory notes or any other instruments
which may be notified by the Reserve Bank as security for the purposes of this Act;
(zb) “service” means service of any description which is made available to potential users and
includes the provision of facilities in connection with banking, financing, insurance, medical assistance,
legal assistance, chit fund, real estate, transport, processing, supply of electrical or other energy,
boarding or lodging or both, entertainment, amusement or the purveying of news or other information,
but does not include the rendering of any service free of charge or under a contract of personal service ;
(zc) “Special Director (Appeals)” means an officer appointed under 1[section 17];
(zd) “specify” means to specify by regulations made under this Act and the expression “specified”
shall be construed accordingly;
1. Subs. by Act 7 of 2017, s.165, for “section 18” (w.e.f. 26-5-2017).
5
(ze) “transfer” includes sale, purchase, exchange, mortgage, pledge, gift, loan or any other form of
transfer of right, title, possession or lien.
CHAPTER II
REGULATION AND MANAGEMENT OF FOREIGN EXCHANGE
3. Dealing in foreign exchange, etc.—Save as otherwise provided in this Act, rules or regulations
made thereunder, or with the general or special permission of the Reserve Bank, no person shall—
(a) deal in or transfer any foreign exchange or foreign security to any person not being an
authorised person;
(b) make any payment to or for the credit of any person resident outside India in any manner;
(c) receive otherwise through an authorised person, any payment by order or on behalf of any
person resident outside India in any manner.
Explanation.—For the purpose of this clause, where any person in, or resident in, India receives
any payment by order or on behalf of any person resident outside India through any other person
(including an authorised person) without a corresponding inward remittance from any place outside
India, then, such person shall be deemed to have received such payment otherwise than through an
authorised person;
(d) enter into any financial transaction in India as consideration for or in association with
acquisition or creation or transfer of a right to acquire, any asset outside India by any person.
Explanation.—For the purpose of this clause, “financial transaction” means making any payment
to, or for the credit of any person, or receiving any payment for, by order or on behalf of any person,
or drawing, issuing or negotiating any bill of exchange or promissory note, or transferring any
security or acknowledging any debt.
4. Holding of foreign exchange, etc.—Save as otherwise provided in this Act, no person resident in
India shall acquire, hold, own, possess or transfer any foreign exchange, foreign security or any
immovable property situated outside India.
5. Current account transactions.—Any person may sell or draw foreign exchange to or from an
authorised person if such sale or drawal is a current account transaction:
Provided that the Central Government may, in public interest and in consultation with the Reserve
Bank, impose such reasonable restrictions for current account transactions as may be prescribed.
6. Capital account transactions.—(1) Subject to the provisions of sub-section (2), any person may
sell or draw foreign exchange to or from an authorised person for a capital account transaction.
(2) The Reserve Bank may, in consultation with the Central Government, specify—
1
[(a) any class or classes of capital account transactions which are permissible;]
(b) the limit up to which foreign exchange shall be admissible for such transactions:
2
[(c) any conditions which may be placed on such transactions;]
3
[Provided that the Reserve Bank shall not impose any restriction on the drawal of foreign
exchange for payments due on account of amortization of loans or not depreciation of direct
investments in the ordinary course of business.]
1. Clause (a) shall stand substituted (date to be notified) by Act 20 of 2015, s. 139, to read as under:
“(a) any class or classes of capital account transactions, involving debt instruments, which are permissible;".
2. Clause (c) shall stand inserted (date to be notified) by s. 139, ibid.
3. The proviso shall stand substituted (date to be notified) by s. 139, ibid., to read as under:
“Provided that the Reserve Bank or the Central Government shall not impose any restrictions on the drawal of foreign
exchange for payment due on account of amortisation of loans or for depreciation of direct investments in the ordinary
course of business.”.
6
1
[(2A) The Central Government may, in consultation with the Reserve Bank, prescribe—
(a) any class or classes of capital account transactions, not involving debt instruments, which are
permissible;
(b) the limit up to which foreign exchange shall be admissible for such transactions; and
(c) any conditions which may be placed on such transactions.]
2
[(3) Without prejudice to the generality of the provisions of sub-section (2), the Reserve Bank may,
by regulations prohibit, restrict or regulate the following:—
(a) transfer or issue of any foreign security by a person resident in India;
(b) transfer or issue of any security by a person resident outside India;
(c) transfer or issue of any security or foreign security by any branch, office or agency in India of
a person resident outside India;
(d) any borrowing or lending in foreign exchange in whatever form or by whatever name called;
(e) any borrowing or lending in rupees in whatever form or by whatever name called between a
person resident in India and a person resident outside India;
(f) deposits between persons resident in India and persons resident outside India;
(g) export, import or holding of currency or currency notes;
(h) transfer of immovable property outside India, other than a lease not exceeding five years, by a
person resident in India;
(i) acquisition or transfer of immovable property in India, other than a lease not exceeding five
years, by a person resident outside India;
(j) giving of a guarantee or surety in respect of any debt, obligation or other liability incurred—
(i) by a person resident in India and owed to a person resident outside India; or
(ii) by a person resident outside India.]
(4) A person resident in India may hold, own, transfer or invest in foreign currency, foreign security
or any immovable property situated outside India if such currency, security or property was acquired, held
or owned by such person when he was resident outside India or inherited from a person who was resident
outside India.
(5) A person resident outside India may hold, own, transfer or invest in Indian currency, security or
any immovable property situated in India if such currency, security or property was acquired, held or
owned by such person when he was resident in India or inherited from a person who was resident in
India.
(6) Without prejudice to the provisions of this section, the Reserve Bank may, by regulation, prohibit,
restrict, or regulate establishment in India of a branch, office or other place of business by a person
resident outside India, for carrying on any activity relating to such branch, office or other place of
business.
3
[(7) For the purposes of this section, the term “debt instruments” shall mean, such instruments as
may be determined by the Central Government in consultation with the Reserve Bank.]
7. Export of goods and services.—(1) Every exporter of goods shall—
(a) furnish to the Reserve Bank or to such other authority a declaration in such form and in such
manner as may be specified, containing true and correct material particulars, including the amount
representing the full export value or, if the full export value of the goods is not ascertainable at the
1. Sub-section (2A) shall stand inserted (date to be notified) by Act 20 of 2015, s. 139.
2. Sub-section (3) shall stand omitted (date to be notified) by s. 139, ibid.
3. Sub-section (7) shall stand inserted (date to be notified) by s. 139, ibid.
7
time of export, the value which the exporter, having regard to the prevailing market conditions,
expects to receive on the sale of the goods in a market outside India;
(b) furnish to the Reserve Bank such other information as may be required by the Reserve Bank
for the purpose of ensuring the realisation of the export proceeds by such exporter.
(2) The Reserve Bank may, for the purpose of ensuring that the full export value of the goods or such
reduced value of the goods as the Reserve Bank determines, having regard to the prevailing market
conditions, is received without any delay, direct any exporter to comply with such requirements as it
deems fit.
(3) Every exporter of services shall furnish to the Reserve Bank or to such other authorities a
declaration in such form and in such manner as may be specified, containing the true and correct material
particulars in relation to payment for such services.
8. Realisation and repatriation of foreign exchange.—Save as otherwise provided in this Act,
where any amount of foreign exchange is due or has accrued to any person resident in India, such person
shall take all reasonable steps to realise and repatriate to India such foreign exchange within such period
and in such manner as may be specified by the Reserve Bank.
9. Exemption from realisation and repatriation in certain cases.—The provisions of sections 4
and 8 shall not apply to the following, namely:—
(a) possession of foreign currency or foreign coins by any person up to such limit as the Reserve
Bank may specify;
(b) foreign currency account held or operated by such person or class of persons and the limit up
to which the Reserve Bank may specify;
(c) foreign exchange acquired or received before the 8th day of July, 1947 or any income arising
or accruing thereon which is held outside India by any person in pursuance of a general or special
permission granted by the Reserve Bank;
(d) foreign exchange held by a person resident in India up to such limit as the Reserve Bank may
specify, if such foreign exchange was acquired by way of gift or inheritance from a person referred to
in clause (c), including any income arising therefrom;
(e) foreign exchange acquired from employment, business, trade, vocation, services, honorarium,
gifts, inheritance or any other legitimate means up to such limit as the Reserve Bank may specify; and
(f) such other receipts in foreign exchange as the Reserve Bank may specify.
CHAPTER III
AUTHORISED PERSON
10. Authorised person.—(1) The Reserve Bank may, on an application made to it in this behalf,
authorise any person to be known as authorised person to deal in foreign exchange or in foreign
securities, as an authorised dealer, money changer or off-shore banking unit or in any other manner as it
deems fit.
(2) An authorisation under this section shall be in writing and shall be subject to the conditions laid
down therein.
(3) An authorisation granted under sub-section (1) may be revoked by the Reserve Bank at any time if
the Reserve Bank is satisfied that—
(a) it is in public interest so to do; or
(b) the authorised person has failed to comply with the condition subject to which the
authorisation was granted or has contravened any of the provisions of the Act or any rule, regulation,
notification, direction or order made thereunder:
Provided that no such authorisation shall be revoked on any ground referred to in clause (b) unless the
authorised person has been given a reasonable opportunity of making a representation in the matter.
8
(4) An authorised person shall, in all his dealings in foreign exchange or foreign security, comply
with such general or special directions or orders as the Reserve Bank may, from time to time, think fit to
give, and, except with the previous permission of the Reserve Bank, an authorised person shall not engage
in any transaction involving any foreign exchange or foreign security which is not in conformity with the
terms of his authorisation under this section.
(5) An authorised person shall, before undertaking any transaction in foreign exchange on behalf of
any person, require that person to make such declaration and to give such information as will reasonably
satisfy him that the transaction will not involve, and is not designed for the purpose of any contravention
or evasion of the provisions of this Act or of any rule, regulation, notification, direction or order made
thereunder, and where the said person refuses to comply with any such requirement or makes only
unsatisfactory compliance therewith, the authorised person shall refuse in writing to undertake the
transaction and shall, if he has reason to believe that any such contravention or evasion as aforesaid is
contemplated by the person, report the matter to the Reserve Bank.
(6) Any person, other than an authorised person, who has acquired or purchased foreign exchange for
any purpose mentioned in the declaration made by him to authorised person under sub-section (5) does
not use it for such purpose or does not surrender it to authorised person within the specified period or uses
the foreign exchange so acquired or purchased for any other purpose for which purchase or acquisition of
foreign exchange is not permissible under the provisions of the Act or the rules or regulations or direction
or order made thereunder shall be deemed to have committed contravention of the provisions of the Act
for the purpose of this section.
11. Reserve Bank’s powers to issue directions to authorised person.—(1) The Reserve Bank may,
for the purpose of securing compliance with the provisions of this Act and of any rules, regulations,
notifications or directions made thereunder, give to the authorised persons any direction in regard to
making of payment or the doing or desist from doing any act relating to foreign exchange or foreign
security.
(2) The Reserve Bank may, for the purpose of ensuring the compliance with the provisions of this Act
or of any rule, regulation, notification, direction or order made thereunder, direct any authorised person to
furnish such information, in such manner, as it deems fit.
(3) Where any authorised person contravenes any direction given by the Reserve Bank under this Act
or fails to file any return as directed by the Reserve Bank, the Reserve Bank may, after giving reasonable
opportunity of being heard, impose on the authorised person a penalty which may extend to ten thousand
rupees and in the case of continuing contravention with an additional penalty which may extend to two
thousand rupees for every day during which such contravention continues.
12. Power of Reserve Bank to inspect authorised person.—(1) The Reserve Bank may, at any
time, cause an inspection to be made, by any officer of the Reserve Bank specially authorised in writing
by the Reserve Bank in this behalf, of the business of any authorised person as may appear to it to be
necessary or expedient for the purpose of—
(a) verifying the correctness of any statement, information or particulars furnished to the Reserve
Bank;
(b) obtaining any information or particulars which such authorised person has failed to furnish on
being called upon to do so;
(c) securing compliance with the provisions of this Act or of any rules, regulations, directions or
orders made thereunder.
(2) It shall be the duty of every authorised person, and where such person is a company or a firm,
every director, partner or other officer of such company or firm, as the case may be, to produce to any
officer making an inspection under sub-section (1), such books, accounts and other documents in his
custody or power and to furnish any statement or information relating to the affairs of such person,
company or firm as the said officer may require within such time and in such manner as the said officer
may direct.
9
CHAPTER IV
CONTRAVENTION AND PENALTIES
13. Penalties.—(1) If any person contravenes any provision of this Act, or contravenes any rule,
regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes
any condition subject to which an authorisation is issued by the Reserve Bank, he shall, upon
adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such
amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such
contravention is a continuing one, further penalty which may extend to five thousand rupees for every day
after the first day during which the contravention continues.
1
[(1A) If any person is found to have acquired any foreign exchange, foreign security or immovable
property, situated outside India, of the aggregate value exceeding the threshold prescribed under the
proviso to sub-section (1) of section 37A, he shall be liable to a penalty up to three times the sum
involved in such contravention and confiscation of the value equivalent, situated in India, the Foreign
exchange, foreign security or immovable property.
(1B) If the Adjudicating Authority, in a proceeding under sub-section (1A) deems fits, he may, after
recording the reasons in writing, recommend for the initiation of prosecution and if the Director of
Enforcement is satisfied, he may, after recording the reasons in writing, may direct prosecution by filing a
Criminal Complaint against the guilty person by an officer not below the rank of Assistant Director.
(1C) If any person is found to have acquired any foreign exchange, foreign security or immovable
property, situated outside India, of the aggregate value exceeding the threshold prescribed under the
proviso to sub-section (1) of section 37A, he shall be, in addition to the penalty imposed under
sub-section (1A), punishable with imprisonment for a term which may extend to five years and with fine.
(1D) No court shall take cognizance of an offence under sub-section (1C) of section 13 except as on
complaint in writing by an officer not below the rank of Assistant Director referred to in
sub-section (1B).]
(2) Any Adjudicating Authority adjudging any contravention under sub-section (1), may, if he thinks
fit in addition to any penalty which he may impose for such contravention direct that any currency,
security or any other money or property in respect of which the contravention has taken place shall be
confiscated to the Central Government and further direct that the foreign exchange holdings, if any, of the
persons committing the contraventions or any part thereof, shall be brought back into India or shall be
retained outside India in accordance with the directions made in this behalf.
Explanation.—For the purposes of this sub-section, “property” in respect of which contravention has
taken place, shall include—
(a) deposits in a bank, where the said property is converted into such deposits;
(b) Indian currency, where the said property is converted into that currency; and
(c) any other property which has resulted out of the conversion of that property.
14. Enforcement of the orders of Adjudicating Authority.—(1) Subject to the provisions of
sub-section (2) of section 19, if any person fails to make full payment of the penalty imposed on him
under section 13 within a period of ninety days from the date on which the notice for payment of such
penalty is served on him, he shall be liable to civil imprisonment under this section.
(2) No order for the arrest and detention in civil prison of a defaulter shall be made unless the
Adjudicating Authority has issued and served a notice upon the defaulter calling upon him to appear
before him on the date specified in the notice and to show cause why he should not be committed to the
civil prison, and unless the Adjudicating Authority, for reasons in writing, is satisfied—
(a) that the defaulter, with the object or effect of obstructing the recovery of penalty, has after the
issue of notice by the Adjudicating Authority, dishonestly transferred, concealed, or removed any part
of his property, or
1. Ins. by Act 20 of 2015, s. 140 (w.e.f. 9-9-2015).
10
(b) that the defaulter has, or has had since the issuing of notice by the Adjudicating Authority, the
means to pay the arrears or some substantial part thereof and refuses or neglects or has refused or
neglected to pay the same.
(3) Notwithstanding anything contained in sub-section (1), a warrant for the arrest of the defaulter
may be issued by the Adjudicating Authority if the Adjudicating Authority is satisfied, by affidavit or
otherwise, that with the object or effect of delaying the execution of the certificate the defaulter is likely
to abscond or leave the local limits of the jurisdiction of the Adjudicating Authority.
(4) Where appearance is not made pursuant to a notice issued and served under sub-section (1), the
Adjudicating Authority may issue a warrant for the arrest of the defaulter.
(5) A warrant of arrest issued by the Adjudicating Authority under sub-section (3) or sub-section (4)
may also be executed by any other Adjudicating Authority within whose jurisdiction the defaulter may for
the time being be found.
(6) Every person arrested in pursuance of a warrant of arrest under this section shall be brought
before the Adjudicating Authority issuing the warrant as soon as practicable and in any event within
twenty-four hours of his arrest (exclusive of the time required for the journey):
Provided that, if the defaulter pays the amount entered in the warrant of arrest as due and the costs of
the arrest to the officer arresting him, such officer shall at once release him.
Explanation.—For the purposes of this sub-section, where the defaulter is a Hindu undivided family,
the karta thereof shall be deemed to be the defaulter.
(7) When a defaulter appears before the Adjudicating Authority pursuant to a notice to show cause or
is brought before the Adjudicating Authority under this section, the Adjudicating Authority shall give the
defaulter an opportunity showing cause why he should not be committed to the civil prison.
(8) Pending the conclusion of the inquiry, the Adjudicating Authority may, in his discretion, order the
defaulter to be detained in the custody of such officer as the Adjudicating Authority may think fit or
release him on his furnishing the security to the satisfaction of the Adjudicating Authority for his
appearance as and when required.
(9) Upon the conclusion of the inquiry, the Adjudicating Authority may make an order for the
detention of the defaulter in the civil prison and shall in that event cause him to be arrested if he is not
already under arrest:
Provided that in order to give a defaulter an opportunity of satisfying the arrears, the Adjudicating
Authority may, before making the order of detention, leave the defaulter in the custody of the officer
arresting him or of any other officer for a specified period not exceeding fifteen days, or release him on
his furnishing security to the satisfaction of the Adjudicating Authority for his appearance at the
expiration of the specified period if the arrears are not satisfied.
(10) When the Adjudicating Authority does not make an order of detention under sub-section (9), he
shall, if the defaulter is under arrest, direct his release.
(11) Every person detained in the civil prison in execution of the certificate may be so detained,—
(a) where the certificate is for a demand of an amount exceeding rupees one crore, up to three
years, and
(b) in any other case, up to six months:
Provided that he shall be released from such detention on the amount mentioned in the warrant for his
detention being paid to the officer-in-charge of the civil prison.
(12) A defaulter released from detention under this section shall not, merely by reason of his release,
be discharged from his liability for the arrears, but he shall not be liable to be arrested under the
certificate in execution of which he was detained in the civil prison.
(13) A detention order may be executed at any place in India in the manner provided for the execution
of warrant of arrest under the Code of Criminal Procedure, 1973 (2 of 1974).
11
1
[14A. Power of recover arrears of penalty.—(1) Save as otherwise provided in this Act, the
Adjudicating Authority may, by order in writing, authorise an officer of Enforcement not below the rank
of Assistant Director to recover any arrears of penalty from any person who fails to make full payment of
penalty imposed on him under section 13 within the period of ninety days from the date on which the
notice for payment of such penalty is served on him.
(2) The officer referred to in sub-section (1) shall exercise all the like powers which are conferred on
the income-tax authority in relation to recovery of tax under the Income-tax Act, 1961 (43 of 1961) and
the procedure laid down under the Second Schedule to the said Act shall mutatis mutandis apply in
relation to recovery of arrears of penalty under this Act.]
15. Power to compound contravention.—(1) Any contravention under section 13 may, on an
application made by the person committing such contravention, be compounded within one hundred and
eighty days from the date of receipt of application by the Director of Enforcement or such other officers
of the Directorate of Enforcement and officers of the Reserve Bank as may be authorised in this behalf by
the Central Government in such manner as may be prescribed.
(2) Where a contravention has been compounded under sub-section (1), no proceeding or further
proceeding, as the case may be, shall be initiated or continued, as the case may be, against the person
committing such contravention under that section, in respect of the contravention so compounded.
CHAPTER V
ADJUDICATION AND APPEAL
16. Appointment of Adjudicating Authority.—(1) For the purpose of adjudication under
section 13, the Central Government may, by an order published in the Official Gazette, appoint as many
officers of the Central Government as it may think fit, as the Adjudicating Authorities for holding an
inquiry in the manner prescribed after giving the person alleged to have committed contravention under
section 13, against whom a complaint has been made under sub-section (3) (hereinafter in this section
referred to as the said person) a reasonable opportunity of being heard for the purpose of imposing any
penalty:
Provided that where the Adjudicating Authority is of opinion that the said person is likely to abscond
or is likely to evade in any manner, the payment of penalty, if levied, it may direct the said person to
furnish a bond or guarantee for such amount and subject to such conditions as it may deem fit.
(2) The Central Government shall, while appointing the Adjudicating Authorities under
sub-section (1), also specify in the order published in the Official Gazette, their respective jurisdictions.
(3) No Adjudicating Authority shall hold an enquiry under sub-section (1) except upon a complaint in
writing made by any officer authorised by a general or special order by the Central Government.
(4) The said person may appear either in person or take the assistance of a legal practitioner or a
chartered accountant of his choice for presenting his case before the Adjudicating Authority.
(5) Every Adjudicating Authority shall have the same powers of a civil court which are conferred on
the Appellate Tribunal under sub-section (2) of section 28 and—
(a) all proceedings before it shall be deemed to be judicial proceedings within the meaning of
sections 193 and 228 of the Indian Penal Code (45 of 1860);
(b) shall be deemed to be a civil court for the purposes of sections 345 and 346 of the Code of
Criminal Procedure, 1973 (2 of 1974).
(6) Every Adjudicating Authority shall deal with the complaint under sub-section (2) as expeditiously
as possible and endeavour shall be made to dispose of the complaint finally within one year from the date
of receipt of the complaint:
Provided that where the complaint cannot be disposed of within the said period, the Adjudicating
Authority shall record periodically the reasons in writing for not disposing of the complaint within the
said period.
17. Appeal to Special Director (Appeals).—(1) The Central Government shall, by notification,
appoint one or more Special Directors (Appeals) to hear appeals against the orders of the Adjudicating
1. Section 14A shall stand inserted (date to be notified) by Act 28 of 2016, s. 229.
12
Authorities under this section and shall also specify in the said notification the matter and places in
relation to which the Special Director (Appeals) may exercise jurisdiction.
(2) Any person aggrieved by an order made by the Adjudicating Authority, being an Assistant
Director of Enforcement or a Deputy Director of Enforcement, may prefer an appeal to the Special
Director (Appeals).
(3) Every appeal under sub-section (1) shall be filed within forty-five days from the date on which the
copy of the order made by the Adjudicating Authority is received by the aggrieved person and it shall be
in such form, verified in such manner and be accompanied by such fee as may be prescribed:
Provided that the Special Director (Appeals) may entertain an appeal after the expiry of the said
period of forty-five days, if he 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 Special Director (Appeals) may after giving the
parties to the appeal an opportunity of being heard, pass such order thereon as he thinks fit, confirming,
modifying or setting aside the order appealed against.
(5) The Special Director (Appeals) shall send a copy of every order made by him to the parties to
appeal and to the concerned Adjudicating Authority.
(6) The Special Director (Appeals) shall have the same powers of a civil court which are conferred on
the Appellate Tribunal under sub-section (2) of section 28 and—
(a) all proceedings before him shall be deemed to be judicial proceedings within the meaning of
sections 193 and 228 of the Indian Penal Code (45 of 1860);
(b) shall be deemed to be a civil court for the purposes of sections 345 and 346 of the Code of
Criminal Procedure, 1973 (2 of 1974).
1
[18. Appellate Tribunal.—The Appellate Tribunal constituted under sub-section (1) of section 12 of
the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (13 of 1976), shall,
on and from the commencement of Part XIV of Chapter VI of the Finance Act, 2017 (7 of 2017), be the
Appellate Tribunal for the purposes of this Act and the said Appellate Tribunal shall exercise the
jurisdiction, powers and authority conferred on it by or under this Act.]
19. Appeal to Appellate Tribunal—(1) Save as provided in sub-section (2), the Central Government
or any person aggrieved by an order made by an Adjudicating Authority, other than those referred to in
sub-section (1) of section 17, or the Special Director (Appeals), may prefer an appeal to the Appellate
Tribunal:
Provided that any person appealing against the order of the Adjudicating Authority or the Special
Director (Appeals) levying any penalty, shall while filing the appeal, deposit the amount of such penalty
with such authority as may be notified by the Central Government:
Provided further that where in any particular case, the Appellate Tribunal is of the opinion that the
deposit of such penalty would cause undue hardship to such person, the Appellate Tribunal may dispense
with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the realisation
of penalty.
(2) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date
on which a copy of the order made by the Adjudicating Authority or the Special Director (Appeals) is
received by the aggrieved person or by the Central Government and it shall be in such form, verified in
such manner and be accompanied by such fee as may be prescribed:
Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of
forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.
(3) On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the parties
to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming,
modifying or setting aside the order appealed against.
(4) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and
to the concerned Adjudicating Authority or the Special Director (Appeals), as the case may be.
13
(5) The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as
expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within one
hundred and eighty days from the date of receipt of the appeal:
Provided that where any appeal could not be disposed of within the said period of one hundred and
eighty days, the Appellate Tribunal shall record its reasons in writing for not disposing off the appeal
within the said period.
(6) The Appellate Tribunal may, for the purpose of examining the legality, propriety or correctness of
any order made by the Adjudicating Authority under section 16 in relation to any proceeding, on its own
motion or otherwise, call for the records of such proceedings and make such order in the case as it thinks
fit.
20. [Composition of Appellate Tribunal.] Omitted by the finance Act, 2017 (7 of 2017), s. 165
(w.e.f. 26-5-2017).
1
[21. Qualifications, for appointment of Special Director (Appeals).—A person shall not be
qualified for appointment as a Special Director (Appeals) unless he—
(a) has been a member of the Indian Legal Service and has held a post in Grade I of that Service; or
(b) has been a member of the Indian Revenue Service and has held a post equivalent to a Joint
Secretary to the Government of India.]
22. [Term of office.] Omitted by the Finance Act, 2017 (7 of 2017), s. 165 (w.e.f. 26-5-2017).
2
[23. Terms and Condition of service of Special Director of (Appeals).—The salary and
allowances payable to and the other terms and conditions of service of the Special Director (Appeals)
shall be such as may be prescribed.]
24. [Vacancies.] Omitted by the Finance Act, 2017 (7 of 2017), s. 165 (w.e.f. 26-5-2017).
25. [Resignation and removal.] Omitted by s. 165, ibid. (w.e.f. 26-5-2017).
26. [Member to act as Chairperson in certain circumstances.] Omitted by s. 165, ibid.
(w.e.f. 26-5-2017).
3
[27. Staff of Special Director (Appeal).—(1) The Central Government shall provide the office of
the Special Director (Appeals) with such officers and employees as it may deem fit.
(2) The officers and employees of the office of the Special Director (Appeals) shall discharge their
functions under the general superintendence of the Special Director (Appeals).
(3) The salaries and allowances and other terms and conditions of service of the officers and
employees of the office of the Special Director (Appeals) shall be such as may be prescribed.]
28. Procedure and powers of Appellate Tribunal and Special Director (Appeals).—(1) The
Appellate Tribunal and the Special Director (Appeals) shall not be bound by the procedure laid down by
the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and,
subject to the other provisions of this Act, the Appellate Tribunal and the Special Director (Appeals) shall
have powers to regulate its own procedure.
(2) The Appellate Tribunal and the Special Director (Appeals) shall have, for the purposes of
discharging its functions under this Act, the same powers as are vested in a civil court under the Code of
Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely:—

2. Subs. by s. 165, ibid., for section 23 (w.e.f. 26-5-2017).
3. Subs. by s. 165, ibid., for section 27 (w.e.f. 26-5-2017).
14
(d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act,
1872 (1 of 1872), requisitioning any public record or document or copy of such record or document
from any office;
(e) issuing commissions for the examination of witnesses or documents;
(f) reviewing its decisions;
(g) dismissing a representation of default or deciding it ex parte;
(h) setting aside any order of dismissal of any representation for default or any order passed by it
ex parte; and
(i) any other matter which may be prescribed by the Central Government.
(3) An order made by the Appellate Tribunal or the Special Director (Appeals) under this Act shall be
executable by the Appellate Tribunal or the Special Director (Appeals) as a decree of civil court and, for
this purpose, the Appellate Tribunal and the Special Director (Appeals) shall have all the powers of a civil
court.
(4) Notwithstanding anything contained in sub-section (3), the Appellate Tribunal or the Special
Director (Appeals) may transmit any order made by it to a civil court having local jurisdiction and such
civil court shall execute the order as if it were a decree made by that court.
(5) All proceedings before the Appellate Tribunal and the Special Director (Appeals) shall be deemed
to be judicial proceedings within the meaning of sections 193 and 228 of the Indian
Penal Code (45 of 1860) and the Appellate Tribunal shall be deemed to be a civil court for the purposes
of sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of 1974).
29. [Distribution of business amongst Benches.] Omitted by the Finance Act, 2017 (7 of 2017),
s. 165 (w.e.f. 26-5-2017).
30. [Power of Chairperson to transfer cases.] Omitted by s. 165, ibid. (w.e.f. 26-5-2017).
31. [Decision to be by majority.] Omitted by s. 165, ibid. (w.e.f. 26-5-2017).
32. Right of appellant to take assistance of legal practitioner or chartered accountant and of
Government, to appoint presenting officers.—(1) A person preferring an appeal to the 1[Special
Director (Appeals)] under this Act may either appear in person or take the assistance of a legal
practitioner or a chartered accountant of his choice to present his case before the 2[Special Director
(Appeals)].
(2) The Central Government may authorise one or more legal practitioners or chartered accountants
or any of its officers to act as presenting officers and every person so authorised may present the case
with respect to any appeal before the 2[Special Director (Appeals)].
[33. Officers and employees etc., to be public servant. — The Adjudicating Authority, Competent
3
Authority and the Special Director (Appeals) and other officers and employees of the Special Director
(Appeals) shall be deemed to be public servants within the meaning of section 21 of the Indian Penal
Code, 1860 (45 of 1860).]
34. Civil court not to have jurisdiction.—No civil court shall have jurisdiction to entertain any suit
or proceeding in respect of any matter which an Adjudicating Authority or the Appellate Tribunal or the
Special Director (Appeals) is empowered by or under this Act to determine and no injunction shall be
granted by any court or other authority in respect of any action taken or to be taken in pursuance of any
power conferred by or under this Act.
35. Appeal to High Court.—Any person aggrieved by any decision or order of the Appellate
Tribunal may file an appeal to the High Court within sixty days from the date of communication of the
decision or order of the Appellate Tribunal to him on any question of law arising out of such order:
1. Subs by Act 7 of 2017, s. 165, for “Appellate Tribunal or the Special Director (Appeals” (w.e.f. 26-5-2017).
2. Subs. by s. 165, ibid., for “Appellate Tribunal or the Special Director (Appeals), as the case may be” (w.e.f. 26-5-2017).
15
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause
from filing the appeal within the said period, allow it to be filed within a further period not exceeding
sixty days.
Explanation.—In this section “High Court” means—
(a) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or
carries on business or personally works for gain; and
(b) where the Central Government is the aggrieved party, the High Court within the jurisdiction
of which the respondent, or in a case where there are more than one respondent, any of the
respondents, ordinarily resides or carries on business or personally works for gain.
CHAPTER VI
DIRECTORATE OF ENFORCEMENT
36. Directorate of Enforcement.—(1) The Central Government shall establish a Directorate of
Enforcement with a Director and such other officers or class of officers as it thinks fit, who shall be called
officers of Enforcement, for the purposes of this Act.
(2) Without prejudice to the provisions of sub-section (1), the Central Government may authorise the
Director of Enforcement or an Additional Director of Enforcement or a Special Director of Enforcement
or a Deputy Director of Enforcement to appoint officers of Enforcement below the rank of an Assistant
Director of Enforcement.
(3) Subject to such conditions and limitations as the Central Government may impose, an officer of
Enforcement may exercise the powers and discharge the duties conferred or imposed on him under this
Act.
37. Power of search, seizure, etc.—(1) The Director of Enforcement and other officers of
Enforcement, not below the rank of an Assistant Director, shall take up for investigation the contravention
referred to in section 13.
(2) Without prejudice to the provisions of sub-section (1), the Central Government may also, by
notification, authorise any officer or class of officers in the Central Government, State Government or the
Reserve Bank, not below the rank of an Under Secretary to the Government of India to investigate any
contravention referred to in section 13.
(3) The officers referred to in sub-section (1) shall exercise the like powers which are conferred on
income-tax authorities under the Income-tax Act, 1961 (43 of 1961) and shall exercise such powers,
subject to such limitations laid down under that Act.
1
[37A. Special provisions relating to assets held outside India in contravention of
section 4.—(1) Upon receipt of any information or otherwise, if the Authorised Officer prescribed by the
Central Government has reason to believe that any foreign exchange, foreign security, or any immovable
property, situated outside India, is suspected to have been held in contravention of section 4, he may after
recording the reasons in writing, by an order, seize value equivalent, situated within India, of such foreign
exchange, foreign security or immovable property:
Provided that no such seizure shall be made in case where the aggregate value of such foreign
exchange, foreign security or any immovable property, situated outside India, is less than the value as
may be prescribed.
(2) The order of seizure along with relevant material shall be placed before the Competent Authority,
appointed by the Central Government, who shall be an officer not below the rank of Joint Secretary to the
Government of India by the Authorised Officer within a period of thirty days from the date of such
seizure.
(3) The Competent Authority shall dispose of the petition within a period of one hundred eighty days
from the date of seizure by either confirming or by setting aside such order, after giving an opportunity of
being heard to the representatives of the Directorate of Enforcement and the aggrieved person.
1. Ins. by Act 20 of 2015, s. 142 (w.e.f. 9-9-2015).
16
Explanation.—While computing the period of one hundred eighty days, the period of stay granted by
court shall be excluded and a further period of at least thirty days shall be granted from the date of
communication of vacation of such stay order.
(4) The order of the Competent Authority confirming seizure of equivalent asset shall continue till the
disposal of adjudication proceedings and thereafter, the Adjudicating Authority shall pass appropriate
directions in the adjudication order with regard to further action as regards the seizure made under
sub-section (1):
Provided that if, at any stage of the proceedings under this Act, the aggrieved person discloses the
fact of such foreign exchange, foreign security or immovable property and brings back the same into
India, then the Competent Authority or the Adjudicating Authority, as the case may be, on receipt of an
application in this regard from the aggrieved person, and after affording an opportunity of being heard to
the aggrieved person and representatives of the Directorate of Enforcement, shall pass an appropriate
order as it deems fit, including setting aside of the seizure made under sub-section (1).
(5) Any person aggrieved by any order passed by the Competent Authority may prefer an appeal to
the Appellate Tribunal.
(6) Nothing contained in section 15 shall apply to this section.]
38. Empowering other officers.—(1) The Central Government may, by order and subject to such
conditions and limitations as it thinks fit to impose, authorise any officer of customs or any central excise
officer or any police officer or any other officer of the Central Government or a State Government to
exercise such of the powers and discharge such of the duties of the Director of Enforcement or any other
officer of Enforcement under this Act as may be stated in the order.
(2) The officers referred to in sub-section (1) shall exercise the like powers which are conferred on
the income-tax authorities under the Income-tax Act, 1961 (43 of 1961), subject to such conditions and
limitations as the Central Government may impose.
CHAPTER VII
MISCELLANEOUS
39. Presumption as to documents in certain cases.—Where any document—
(i) is produced or furnished by any person or has been seized from the custody or control of any
person, in either case, under this Act or under any other law; or
(ii) has been received from any place outside India (duly authenticated by such authority or
person and in such manner as may be prescribed) in the course of investigation of any contravention
under this Act alleged to have been committed by any person,
and such document is tendered in any proceeding under this Act in evidence against him, or against him
and any other person who is proceeded against jointly with him, the court or the Adjudicating Authority,
as the case may be, shall—
(a) presume, unless the contrary is proved, that the signature and every other part of such
document which purports to be in the handwriting of any particular person or which the court may
reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in
that person’s handwriting, and in the case of a document executed or attested, that it was executed or
attested by the person by whom it purports to have been so executed or attested;
(b) admit the document in evidence notwithstanding that it is not duly stamped, if such document
is otherwise admissible in evidence;
(c) in a case falling under clause (i), also presume, unless the contrary is proved, the truth of the
contents of such document.
40. Suspension of operation of this Act.—(1) If the Central Government is satisfied that
circumstances have arisen rendering it necessary that any permission granted or restriction imposed by
this Act should cease to be granted or imposed, or if it considers necessary or expedient so to do in public
17
interest, the Central Government may, by notification, suspend or relax to such extent either indefinitely
or for such period as may be notified, the operation of all or any of the provisions of this Act.
(2) Where the operation of any provision of this Act has under sub-section (1) been suspended or
relaxed indefinitely, such suspension or relaxation may, at any time while this Act remains in force, be
removed by the Central Government by notification.
(3) Every notification issued under this section shall be laid, as soon as may be after it is issued,
before each House of Parliament, while it is in session, for a total period of thirty days which may be
comprised in one session or in two or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both Houses agree in making any
modification in the notification or both Houses agree that the notification should not be issued, the
notification shall thereafter have effect only in such modified form or be of no effect, as the case may be;
so, however, that any such modification or annulment shall be without prejudice to the validity of
anything previously done under that notification.
41. Power of Central Government to give directions.—For the purposes of this Act, the Central
Government may, from time to time, give to the Reserve Bank such general or special directions as it
thinks fit, and the Reserve Bank shall, in the discharge of its functions under this Act, comply with any
such directions.
42. Contravention by companies.—(1) Where a person committing a contravention of any of the
provisions of this Act or of any rule, direction or order made thereunder is a company, every person who,
at the time the contravention was committed, was in charge of, and was responsible to, the company for
the conduct of the business of the company as well as the company, shall be deemed to be guilty of the
contravention and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to punishment
if he proves that the contravention took place without his knowledge or that he exercised due diligence to
prevent such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the
provisions of this Act or of any rule, direction or order made thereunder has been committed by a
company and it is proved that the contravention has taken place with the consent or connivance of, or is
attributable to any neglect on the part of, any director, manager, secretary or other officer of the company,
such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention
and shall be liable to be proceeded against and punished accordingly.
Explanation.—For the purposes of this section—
(i) “company” means any body corporate and includes a firm or other association of individuals;
and
(ii) “director”, in relation to a firm, means a partner in the firm.
43. Death or insolvency in certain cases.—Any right, obligation, liability, proceeding or appeal
arising in relation to the provisions of section 13 shall not abate by reason of death or insolvency of the
person liable under that section and upon such death or insolvency such rights and obligations shall
devolve on the legal representative of such person or the official receiver or the official assignee, as the
case may be:
Provided that a legal representative of the deceased shall be liable only to the extent of the inheritance
or estate of the deceased.
44. Bar of legal proceedings.—No suit, prosecution or other legal proceeding shall lie against the
Central Government or the Reserve Bank or any officer of that Government or of the Reserve Bank or
any other person exercising any power or discharging any functions or performing any duties under this
Act, for anything in good faith done or intended to be done under this Act or any rule, regulation,
notification, direction or order made thereunder.
45. Removal of difficulties.—(1) If any difficulty arises in giving effect to the provisions of this Act,
the Central Government may, by order, do anything not inconsistent with the provisions of this Act for
the purpose of removing the difficulty:
18
Provided that no such order shall be made under this section after the expiry of two years from the
commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each
House of Parliament.
46. Power to make rules.—(1) The Central Government may, by notification, make rules to carry
out the provisions of this Act.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for,—
(a) the imposition of reasonable restrictions on current account transactions under section 5;
1
[(aa) the instruments which are determined to be debt instruments under sub-section (7) of
section 6;
(ab) the permissible classes of capital account transactions in accordance with
sub-section (2A) of section 6, the limits of admissibility of foreign exchange, and the prohibition,
restriction or regulation of such transactions;]
(b) the manner in which the contravention may be compounded under sub-section (1) of
section 15;
(c) the manner of holding an inquiry by the Adjudicating Authority under sub-section (1) of
section 16;
(d) the form of appeal and fee for filing such appeal under sections 17 and 19;
(e) the salary and allowances payable to and the other terms and conditions of service of the
2
[Special Director (Appeals)] under section 23;
(f) the salaries and allowances and other conditions of service of the officers and employees of the
3
[office of the Special Director (Appeals)] under sub-section (3) of section 27;
(g) the additional matters in respect of which the Appellate Tribunal and the Special Director
(Appeals) may exercise the powers of a civil court under clause (i) of sub-section (2) of section 28;
4
[(gg) the aggregate value of foreign exchange referred to in sub-section (1) of section 37A;]
(h) the authority or person and the manner in which any document may be authenticated under
clause (ii) of section 39; and
(i) any other matter which is required to be, or may be, prescribed.
47. Power to make regulations.—(1) The Reserve Bank may, by notification, make regulations to
carry out the provisions of this Act and the rules made thereunder.
(2) Without prejudice to the generality of the foregoing power, such regulations may provide for,—
5
[(a) the permissible classes of capital account transactions, the limits of admissibility of foreign
exchange for such transactions, and the prohibition, restriction or regulation of certain capital account
transactions under section 6;]
(b) the manner and the form in which the declaration is to be furnished under clause (a) of
1. Clauses (aa) and (ab) shall stand inserted (date to be notified) by Act 20 of 2015, s. 143.
2. Subs. by Act 7 of 2017, s. 165, for “Chairperson and other Member of the Appellate Tribunal and the Special Director
(Appeals) (w.e.f. 26-5-2017).
3. Subs. by s. 165, ibid., for “Appellate Tribunal and the office of the Special Director (Appeals)” (w.e.f. 26-5-2017).
4. Ins. by Act 20 of 2015, s. 143 (w.e.f. 9-9-2015).
5. Clause (a) shall stand substituted (date to be notified) by s. 144, ibid., to read as under:
“(a) the permissible classes of capital account transactions involving debt instruments determined under sub-section (7)
of section 6, the limits of admissibility of foreign exchange for such transactions, and the prohibition, restriction or
regulation of such capital account transactions under section 6;”.
19
(c) the period within which and the manner of repatriation of foreign exchange under section 8;
(d) the limit up to which any person may possess foreign currency or foreign coins under
clause (a) of section 9;
(e) the class of persons and the limit up to which foreign currency account may be held or
operated under clause (b) of section 9;
(f) the limit up to which foreign exchange acquired may be exempted under clause (d) of
section 9;
(g) the limit up to which foreign exchange acquired may be retained under clause (e) of section 9;
1
[(ga) export, import or holding of currency or currency notes;]
(h) any other matter which is required to be, or may be, specified.
2
[(3) All regulations made by the Reserve Bank before the date on which the provisions of this section
are notified under section 6 and section 47 of this Act on capital account transactions, the regulation
making power in respect of which now vests with the Central Government, shall continue to be valid,
until amended or rescinded by the Central Government.]
48. Rules and regulations to be laid before Parliament.—Every rule and regulation made under this
Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in
session for a total period of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation, or
both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter
have effect only in such modified form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of anything previously done under
that rule or regulation.
49. Repeal and saving.—(1) The Foreign Exchange Regulation Act, 1973 (46 of 1973) is hereby
repealed and the Appellate Board constituted under sub-section (1) of section 52 of the said Act
(hereinafter referred to as the repealed Act) shall stand dissolved.
(2) On the dissolution of the said Appellate Board, the person appointed as Chairman of the Appellate
Board and every other person appointed as Member and holding office as such immediately before such
date shall vacate their respective offices and no such Chairman or other person shall be entitled to claim
any compensation for the premature termination of the term of his office or of any contract of service.
(3) Notwithstanding anything contained in any other law for the time being in force, no court shall take
cognizance of an offence under the repealed Act and no adjudicating officer shall take notice of any
contravention under section 51 of the repealed Act after the expiry of a period of two years from the date
of the commencement of this Act.
(4) Subject to the provisions of sub-section (3) all offences committed under the repealed Act shall
continue to be governed by the provisions of the repealed Act as if that Act had not been repealed.
(a) anything done or any action taken or purported to have been done or taken including any rule,
notification, inspection, order or notice made or issued or any appointment, confirmation or
declaration made or any license, permission, authorization or exemption granted or any document or
instrument executed or any direction given under the Act hereby repealed shall, in so far as it is not
inconsistent with the provisions of this Act, be deemed to have been done or taken under the
corresponding provisions of this Act;
(b) any appeal preferred to the Appellate Board under sub-section (2) of section 52 of the
repealed Act but not disposed of before the commencement of this Act shall stand transferred to and
shall disposed of by the Appellate Tribunal constituted under this Act;
1. Clause (ga) shall stand inserted (date to be notified) by Act 20 of 2015, s. 144.
2. Sub-section (3) shall stand inserted (date to be notified) by s. 144. ibid.
20
(c) every appeal from any decision or order of the Appellate Board under sub-section (3) or
sub-section (4) of section 52 of the repealed Act shall, if not filed before the commencement of this
Act, be filled before the High Court within a period of sixty days of such commencement:
Provided that the High Court may entertain such appeal after the expiry of the said period of sixty
days if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within
the said period.
(6) Save as otherwise provided in sub-section (3), the mention of particular matters in
sub-sections (2), (4) and (5) shall not be held to prejudice or affect the general application of section 6 of
the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeal.
21

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Securities and Exchange Board of India Act, 1992

1. Short title, extent and commencement

3. Establishment and incorporation of Board

11. Functions of Board

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

13. Grants by the Central Government

15A. Penalty for failure to furnish information, return, etc.

15K. Establishment of Securities Appellate Tribunals

16. Power of Central Government to issue directions

THE SCHEDULE [Repealed by Repealing & Amending Act, 2001]

conditions specified in section 11AA;]

Development Authority of India established under sub-section (1) of section 3 of the

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

Regulatory and Development Authority established under subsection (1) of section 3 of

1 Inserted by the Securities Laws (Amendment) Act, 1999, w.e.f. 22-2-2000.

Management of the Board.

5 Inserted by the Securities Laws (Amendment) Act, 2002, w.e.f. 29-10-2002.

section (2) reads as under:

1934 (2 of 1934)”, by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

Removal of member from office.

as: “(d) is appointed as a director of a company”.

16[Member not to participate in meetings in certain cases.

Vacancies, etc., not to invalidate proceedings of Board.

Officers and employees of the Board.

16 Inserted by Securities Laws (Amendment) Act 1995, w.e.f. 25-1-1995.

17 Inserted by Securities Laws (Amendment) Act 1995, w.r.e.f. 25-1-1995.

authority or board or corporation established or constituted by or under any Central or

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

(Amendment) Act 1995, w.e.f. 25-1-1995.

26 Inserted by the Securities Laws (Amendment) Act 1995, w.e.f. 25-1-1995.

34[Board to regulate or prohibit issue of prospectus, offer document or advertisement soliciting

35[Collective investment scheme.

35Inserted by the SEBI (Amendment) Act 1999, w.e.f. 22-2-2000.

with the Board, notify,]

42[Power to issue directions 43[and levy penalty].

41 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013.

Cease and desist proceedings.

Accounts and audit.

SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

continues”, by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

72[Penalty for failure to redress investors’ grievances.

Penalty for certain defaults in case of mutual funds.

continues”, by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

(Amendment) Act, 2002, w.e.f. 29-10-2002.

continues” by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

continues” by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

Penalty for default in case of investment adviser and research analyst.

Penalty for default in case of stock brokers.

(Amendment) Act, 2002, w.e.f. 29-10-2002.

Penalty for insider trading.

Penalty for non-disclosure of acquisition of shares and takeovers.

100[Penalty for fraudulent and unfair trade practices.

98 Inserted by the SEBI (Amendment) Act, 2002, w.e.f. 29-10-2002.

Penalty for contravention where no separate penalty has been provided.

108[Factors to be taken into account while adjudging quantum of penalty.]

112[Crediting sums realised by way of penalties to Consolidated Fund of India.

113[Settlement of administrative and civil proceedings.

117[Composition of Securities Appellate Tribunal.

Qualification for appointment as Presiding Officer or Member of Securities Appellate

Resignation and removal.

2002, w.e.f. 29-10-2002.

Appeal to the Securities Appellate Tribunal.

section (2) read as under:

Procedure and powers of the Securities Appellate Tribunal.