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

Meridian Mutual Fund, a registered scheme, delays despatching unit certificates in the manner required by regulations, and the failure continues for 400 days. Under Section 15D(d), what is the maximum penalty that can be imposed?

The maximum penalty is one crore rupees. Although the daily rate can extend to one lakh rupees, Section 15D(d) imposes an overall ceiling of one crore rupees, so 400 days of default cannot produce a penalty above that cap.

  1. AFour crore rupees, being one lakh rupees for each of 400 days
  2. BOne crore rupees, being the overall ceilingCorrect
  3. CForty lakh rupees, being ten thousand rupees per day
  4. DTen lakh rupees, being the fixed old ceiling

Explanation

The penalty may extend to one lakh rupees per day of continuing failure, but is subject to a maximum of one crore rupees. 400 days at one lakh would be four crore, which exceeds the cap, so the penalty cannot exceed one crore rupees.

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