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CS Executive · Capital Market and Securities Laws · Secondary Market in India

A recognised exchange's surveillance team flags a scrip and its office bearer issues a warning to a broker, intending to enforce a bye-law, but the broker is sued before any enforcement occurs. Which feature of the statutory protection helps the office bearer?

The protection covers things in good faith done or intended to be done in pursuance of the Act or its rules or bye-laws. Since the wording includes intended acts, the office bearer is protected even though enforcement had not yet occurred, provided good faith exists.

  1. AIt covers anything in good faith done or intended to be done in pursuance of the Act or its rules or bye-lawsCorrect
  2. BIt covers only acts already fully completed
  3. CIt covers only acts done on SEBI's direct written order
  4. DIt covers acts even if done in bad faith, if within the bye-laws

Explanation

The text of section 29 protects anything done or intended to be done, so an intended enforcement action is covered. The key condition is good faith. Bad faith acts are not protected, and no SEBI order is required.

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