Skip to content

CS Executive · Capital Market and Securities Laws · Securities Contracts (Regulation) Act, 1956

Before approving a corporatisation scheme under the SCRA, SEBI concludes that the scheme is not in the interest of the trade and the public interest and decides to reject it. Which step must SEBI follow before passing the order of rejection?

SEBI must give a reasonable opportunity of being heard to all persons concerned and to the recognised stock exchange before passing an order of rejection. Section 4B(5) then requires the rejection order to be published in the Official Gazette.

  1. AObtain prior consent of the Central Government
  2. BGive a reasonable opportunity of being heard to all persons concerned and the exchange concernedCorrect
  3. CRefer the scheme to the High Court for confirmation
  4. DPublish the scheme in two daily newspapers for objections

Explanation

Under the proviso to section 4B(5), SEBI must give a reasonable opportunity of being heard to all persons concerned and the recognised stock exchange before rejecting the scheme. The order of rejection is then published in the Official Gazette. Government consent or court confirmation is not required.

Did you get it right without looking?

One question tells you little. A timed set on Securities Contracts (Regulation) Act, 1956 shows your real accuracy, how long you take and where you lose marks.

Practise Securities Contracts (Regulation) Act, 1956Free diagnostic mock

More Securities Contracts (Regulation) Act, 1956 questions