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

Arjun Schemes, a registered collective investment scheme, collects Rs 40 crore but does not invest it in the manner or within the period specified in the regulations. Which clause of Section 15D of the SEBI Act addresses this default?

Clause (f) of Section 15D applies. It penalises a registered collective investment scheme that fails to invest the money it collected in the manner or within the period specified in the regulations. The other clauses deal with registration, listing and unit certificates.

  1. AClause (a), carrying on a scheme without registration
  2. BClause (d), failure to despatch unit certificates
  3. CClause (c), failure to apply for listing
  4. DClause (f), failure to invest money collected in the specified manner or periodCorrect

Explanation

Section 15D(f) penalises a registered collective investment scheme that fails to invest money collected in the manner or within the period specified in the regulations. Clause (a) concerns operating without registration, (c) listing applications and (d) despatch of unit certificates, none of which is the default here.

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