CS Executive · Capital Market and Securities Laws · Securities Market Intermediaries
SEBI attaches the bank account of a depository participant that is alleged to have violated the SEBI Act through a particular set of transactions. Which statement about the extent of attachment is correct under the second proviso to Section 11(4)(e)?
Attachment is confined to property, bank accounts or transactions in them that relate to the proceeds actually involved in the violation. SEBI cannot attach everything the participant holds, and it may act pending investigation rather than waiting for a final order.
- AAll accounts of the participant may be attached regardless of the transactions
- BOnly property or accounts, or transactions entered therein, relating to proceeds actually involved in the violation may be attachedCorrect
- COnly immovable property can be attached
- DAttachment is permitted only after the final inquiry order
Explanation
The second proviso restricts attachment to property, bank accounts or transactions therein so far as they relate to the proceeds actually involved in the violation. A blanket attachment of all accounts is therefore not allowed. Clause (4) also permits measures pending investigation, so a final order is not needed.
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