Skip to content

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

After an inquiry, SEBI finds that Kiran Traders made a profit by a transaction in contravention of the SEBI Act or its regulations. Which direction is expressly covered by the Explanation to Section 11B?

SEBI can direct Kiran Traders to disgorge an amount equivalent to the wrongful gain made or loss averted. The Explanation to Section 11B states the direction power includes this disgorgement for profits made or losses averted through contraventions.

  1. ADirecting Kiran Traders to disgorge an amount equal to the wrongful gain made or loss avertedCorrect
  2. BDirecting the stock exchange to pay Kiran Traders's gain to the Central Government as a tax
  3. CDirecting that Kiran Traders be imprisoned for the contravention
  4. DDirecting that the gain be retained by the broker of Kiran Traders

Explanation

The Explanation to Section 11B clarifies that the power to issue directions includes directing any person who made profit or averted loss by a contravening transaction to disgorge an amount equivalent to the wrongful gain or loss averted. Imprisonment is not a direction under this section.

Did you get it right without looking?

One question tells you little. A timed set on Secondary Market in India shows your real accuracy, how long you take and where you lose marks.

Practise Secondary Market in IndiaFree diagnostic mock

More Secondary Market in India questions