CS Executive · Capital Market and Securities Laws · Mutual Funds
Sunrise Investments starts sponsoring a mutual fund scheme without obtaining a certificate of registration from SEBI. Under Section 15D of the SEBI Act, 1992, what is the maximum penalty it faces?
The maximum penalty is rupees one crore. Section 15D(a) of the SEBI Act provides a penalty of at least one lakh rupees, extending to one lakh rupees per day while the unregistered scheme is sponsored or carried on, subject to an overall cap of one crore rupees.
- ARupees ten lakh
- BRupees one croreCorrect
- CRupees twenty-five crore
- DRupees one lakh in total
Explanation
Section 15D(a) provides a penalty of not less than one lakh rupees, extending to one lakh rupees per day of sponsoring or carrying on the scheme, subject to a maximum of one crore rupees. The Rs 10 lakh figure is the old pre-2014 'whichever is higher' limit, which has been replaced.
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