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CMA Final · Corporate and Economic Laws · SEBI Laws and Regulations

A depository has made bye-laws, but SEBI considers it expedient that a particular bye-law be amended and directs it by written order to amend it within 30 days. The depository neglects to comply. What may SEBI do under the Depositories Act, 1996?

If the depository fails or neglects to comply within the specified period, SEBI may itself make, amend or revoke the bye-laws, either in the form specified in its order or with such modifications as it thinks fit, under Section 26(4).

  1. AOnly impose a fine and wait for the depository to comply
  2. BMake or amend or revoke the bye-laws itself, in the form specified in the order or with modifications it thinks fitCorrect
  3. CRefer the matter to Parliament for the amendment to be made by resolution
  4. DAsk the Central Government to make the bye-laws on its behalf

Explanation

Under Section 26(3) SEBI may direct a depository by written order to make, amend or revoke bye-laws. Under Section 26(4), on failure or neglect to comply within the specified period, the Board may itself make, amend or revoke them, in the form specified or with modifications it thinks fit. Waiting or referring to Parliament is not the provided route.

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