CS Executive · Capital Market and Securities Laws · Mutual Funds
Meridian Fund House, a registered mutual fund, fails to refund application monies to investors within the period specified in the regulations. Under Section 15D of the SEBI Act, 1992, what is the maximum penalty cap?
Under Section 15D(e), failure to refund application monies within the regulated period attracts a penalty of one lakh rupees for each day the failure continues, subject to a maximum of one crore rupees. So the cap is Rs 1 crore.
- ARs 10 lakh
- BRs 1 croreCorrect
- CRs 25 crore
- DRs 5 crore
Explanation
Section 15D(e) provides a penalty of not less than one lakh rupees, extending to one lakh rupees per day of continuing failure, subject to a maximum of one crore rupees. Rs 10 lakh was the old pre-2014 style ceiling and is not the current cap.
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