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CS Executive · Capital Market and Securities Laws · Issue of Capital and Disclosure Requirements

Sunrise Agro Ltd plans a public issue of equity shares and wants to know which authority lays down the rules on issue of capital and the manner of disclosure by companies. Under the SEBI Act, 1992, who can specify by regulations the matters relating to issue of capital and how companies must disclose them?

SEBI can specify, by regulations, the matters relating to issue of capital and the manner in which companies disclose them. Section 11A of the SEBI Act gives the Board this power for the protection of investors, so SEBI and not the RoC or RBI is correct.

  1. AThe Securities and Exchange Board of IndiaCorrect
  2. BThe Registrar of Companies of the state where the company is registered
  3. CThe Reserve Bank of India
  4. DThe Ministry of Finance through the stock exchange

Explanation

Section 11A of the SEBI Act, 1992 empowers the Board, for the protection of investors, to specify by regulations the matters relating to issue of capital and the manner of their disclosure by companies. The Registrar of Companies registers documents but does not frame issue-of-capital regulations under this provision.

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