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CS Executive · Capital Market and Securities Laws · Mutual Funds

Konark Asset Sponsors runs a registered mutual fund. It fails to comply with the terms and conditions of its certificate of registration, and the failure continues for many days. Under Section 15D of the SEBI Act, what is the maximum penalty payable?

The penalty may extend to Rs 1 lakh for each day the failure continues, subject to an overall maximum of Rs 1 crore. This is the current Section 15D(b) position; the older Rs 10,000 per day and Rs 10 lakh limits were replaced by amendment.

  1. ARs 10,000 per day, subject to a maximum of Rs 10 lakh
  2. BRs 1 lakh per day, subject to a maximum of Rs 1 croreCorrect
  3. CRs 5,000 per day with no overall ceiling
  4. DRs 1 crore per day with no overall ceiling

Explanation

Section 15D(b) provides a penalty not less than one lakh rupees but which may extend to one lakh rupees for each day the failure continues, subject to a maximum of one crore rupees. The Rs 10,000 per day and Rs 10 lakh figures were the older, substituted amounts.

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