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CS Professional · IFSCA - Regulations, Listing and Compliances · Capital Market Intermediaries

Meru Brokers IFSC Ltd is issued a show-cause notice by IFSCA for delay in reporting client transactions. It wants to defend itself. What should the company do?

Meru Brokers should file a written reply within the time stated in the notice and attend the hearing if offered. A show-cause notice is a formal step, and ignoring it risks an adverse order passed without hearing the intermediary's side.

  1. AIgnore the notice, since a show-cause notice is not a formal step
  2. BPay any penalty immediately without replying, as replies are not considered
  3. CSubmit a written reply within the time given and, if offered, appear for the hearing to explain its positionCorrect
  4. DResign its registration immediately to avoid proceedings

Explanation

A show-cause notice calls for an explanation. The intermediary should reply in writing within the stated time and use the opportunity of hearing. Ignoring it risks an ex parte order, and surrendering registration does not by itself end liability for past violations.

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