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CS Professional · IFSCA - Regulations, Listing and Compliances · Capital Market Intermediaries

After inspection, IFSCA finds that Narmada Clearing IFSC Ltd repeatedly breached its regulations but no client has suffered loss. Which statement is correct about enforcement?

IFSCA can act because breaching its regulations is itself a violation, whether or not clients lost money. Loss, gains and repetition influence how severe the penalty or action should be, and administrative measures are available alongside any other proceedings.

  1. AEnforcement is impossible because no client has suffered a loss
  2. BOnly criminal prosecution is available, and no administrative action is possible
  3. COnly a verbal warning is legally permitted
  4. DIFSCA may still take action, since a breach of regulatory requirements is itself enough, and loss to clients only affects the severityCorrect

Explanation

Regulatory action rests on non-compliance with the regulations, not on proof of client loss. Loss, gains made and repetition are relevant to deciding the quantum of penalty or the type of action. Administrative measures such as penalties and directions are available, so the other options are wrong.

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