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CS Executive · Capital Market and Securities Laws · Secondary Market in India

The Central Government proposes to refuse the recognition application of Meridian Exchange Ltd. Which statement is correct under Section 4 of the SCRA?

Refusal is permitted only after the stock exchange has been given an opportunity to be heard, and the reasons for refusal must be communicated to it in writing. Section 4(4) makes this mandatory, with no exception for member numbers or Gazette publication.

  1. ARefusal is allowed only after giving the exchange an opportunity of being heard, and reasons must be communicated to it in writingCorrect
  2. BRefusal may be made without hearing if the exchange has fewer members than prescribed
  3. CRefusal needs no reasons to be communicated if published in the Gazette
  4. DRefusal is valid only if the governing body of another exchange consents

Explanation

Section 4(4) says no application shall be refused except after giving the stock exchange an opportunity to be heard, and the reasons for refusal must be communicated in writing. The other options add exceptions that the section does not provide.

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