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CS Executive · Capital Market and Securities Laws · Laws Governing Depositories and Depository Participants

SEBI considers it expedient that a depository amend a bye-law, and issues a written order with a time limit. The depository fails to comply within that period. Under Section 26 of the Depositories Act, 1996, what may SEBI do?

If the depository fails to comply with SEBI's written order within the specified period, SEBI itself may make, amend or revoke the bye-laws, either in the form given in the order or with such modifications as it thinks fit.

  1. AItself make, amend or revoke the bye-laws, in the form specified in the order or with modifications it thinks fitCorrect
  2. BOnly issue a further reminder and wait for the depository's board to meet
  3. CRefer the matter to the issuer companies for a vote
  4. DDissolve the depository automatically

Explanation

Under Section 26(3) the Board may direct a depository by written order to make, amend or revoke bye-laws. Under Section 26(4), if the depository neglects to comply within the specified period, the Board may itself make, amend or revoke them, as specified in the order or with modifications it thinks fit.

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