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

Ramesh Securities wants to start dealing in securities on behalf of clients as a stock-broker. Under the SEBI Act, 1992, on what basis may it buy, sell or deal in securities?

A stock-broker may deal in securities only under, and in accordance with the conditions of, a certificate of registration obtained from SEBI under its regulations. Section 12(1) of the SEBI Act bars dealing without it, and exchange approval or company registration cannot replace it.

  1. AOnly under, and in accordance with the conditions of, a certificate of registration obtained from SEBICorrect
  2. BOn approval of the concerned stock exchange alone, without any SEBI certificate
  3. COn registration with the Registrar of Companies as a company
  4. DBy paying a fee to the Central Government every year

Explanation

Section 12(1) provides that no stock-broker or sub-broker shall buy, sell or deal in securities except under, and in accordance with the conditions of, a certificate of registration obtained from the Board under the regulations. Exchange approval or ROC registration does not substitute for this certificate.

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