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CMA Final · Corporate and Economic Laws · SEBI Laws and Regulations

Regulations made by SEBI under the Securities Contracts (Regulation) Act, 1956 must be laid before Parliament. Which statement correctly describes the consequence?

Each regulation is laid before both Houses for thirty days. If both Houses agree to modify it or annul it, it then operates only in modified form or has no effect, but anything previously done under it stays valid (Section 31(3)).

  1. AThey take effect only after both Houses approve them by resolution
  2. BIf both Houses agree to modify or annul a regulation within the prescribed period, it has effect only in modified form or is of no effect, without prejudice to anything previously done under itCorrect
  3. CAny annulment by Parliament makes everything previously done under the regulation void
  4. DThey must be laid only before the Lok Sabha for a period of 14 days

Explanation

Section 31(3) requires each regulation to be laid before each House for thirty days in total, in one or more sessions. If both Houses agree to modify it or that it should not be made, it has effect only as modified or not at all, but earlier actions remain valid. The void-ab-initio option contradicts this saving.

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