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CS Executive · Capital Market and Securities Laws · Collective Investment Schemes

A registered CIS fails to refund application monies to investors within the period specified in the regulations. Under which provision of the SEBI Act is it liable to penalty?

Section 15D(e) applies. It penalises a registered collective investment scheme that fails to refund investors' application monies within the period specified in the regulations, with up to Rs 1 lakh per day of default, subject to a Rs 1 crore maximum.

  1. ASection 15D(c), failure to apply for listing
  2. BSection 15D(d), failure to despatch unit certificates
  3. CSection 15D(f), failure to invest collected money as specified
  4. DSection 15D(e), failure to refund application monies within the specified periodCorrect

Explanation

Section 15D(e) specifically covers a registered CIS failing to refund application monies within the period in the regulations. The penalty is up to Rs 1 lakh per day of failure, capped at Rs 1 crore. The other clauses cover listing, certificates and investment.

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