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CS Executive · Capital Market and Securities Laws · Securities Market Intermediaries

Kaveri Share Transfer Services handled transfers for listed companies and applied to SEBI for registration. SEBI wants to cancel its certificate of registration under Section 12(3) of the SEBI Act. Which condition must be satisfied before the order is made?

SEBI may suspend or cancel the certificate only after giving the intermediary a reasonable opportunity of being heard. This is the proviso to Section 12(3). No Central Government approval, client consent or court decree is needed before the order is passed.

  1. AThe Central Government must first approve the cancellation
  2. BKaveri must be given a reasonable opportunity of being heardCorrect
  3. CThe issuer companies it serves must consent in writing
  4. DA civil court must first pass a decree against Kaveri

Explanation

Section 12(3) allows SEBI to suspend or cancel registration by order in the manner determined by regulations, but the proviso says no such order can be made unless the person concerned has been given a reasonable opportunity of being heard. Government approval, client consent or a court decree is not required.

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