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CS Executive · Capital Market and Securities Laws · Securities Contracts (Regulation) Act, 1956

SEBI approves the scheme of Yamuna Stock Exchange and wants to limit the influence of broker-shareholders on its governing board. What is the maximum share of the governing board's total strength that stock broker representatives may be restricted to under the SCRA?

The number of stock broker representatives on the governing board shall not exceed one-fourth of its total strength. Section 4B(6)(c) lets SEBI fix such a restriction in its written order while approving a corporatisation and demutualisation scheme.

  1. ANot more than one-fourthCorrect
  2. BNot more than one-third
  3. CNot more than one-half
  4. DNot more than 49 per cent

Explanation

Section 4B(6)(c) allows SEBI, while approving the scheme, to restrict the number of stock broker representatives on the governing board, which shall not exceed one-fourth of its total strength. One-third and one-half exceed the limit.

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