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

SEBI finds that Kiran Brokers, a registered stock-broker, breached its registration conditions and wants to suspend its certificate. What does Section 12(3) of the SEBI Act require?

SEBI may suspend or cancel the certificate by order in the manner laid down in the regulations, but only after giving the broker a reasonable opportunity of being heard. The proviso to Section 12(3) bars an order without such a hearing.

  1. ASEBI may suspend by order in the manner set by regulations, only after giving the person a reasonable opportunity of being heardCorrect
  2. BSEBI may suspend the certificate without notice if the breach is serious
  3. CSEBI must first obtain a court order before suspension
  4. DOnly the stock exchange can suspend the certificate

Explanation

Section 12(3) empowers the Board to suspend or cancel a certificate by order in the manner determined by regulations, with the proviso that no order is made unless the person has been given a reasonable opportunity of being heard. A no-notice suspension is therefore contrary to the proviso.

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