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

SEBI passes an order attaching bank accounts of an intermediary suspected of violating the SEBI Act, 1992 under Section 11(4)(e). Which statement is correct?

Attachment under Section 11(4)(e) is for a period not exceeding ninety days, and SEBI must obtain confirmation from the Special Court within ninety days for it to continue. It is also limited to proceeds actually involved in the violation.

  1. AThe attachment may be for any period without further approval
  2. BThe attachment is for a period not exceeding ninety days, and SEBI must obtain confirmation from the Special Court within ninety days for it to continueCorrect
  3. CThe attachment needs no hearing at any stage and can cover all property of the intermediary
  4. DThe attachment lasts only until SEBI completes its inquiry, with no court role

Explanation

Clause (e) allows attachment for a period not exceeding ninety days. SEBI must obtain confirmation from the Special Court under Section 26A within ninety days for continuation. Only property or accounts related to proceeds actually involved in the violation may be attached, and SEBI must give an opportunity of hearing before or after the order, so the other options are wrong.

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