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CS Executive · Capital Market and Securities Laws · Securities Contracts (Regulation) Act, 1956

The Central Government proposes to refuse the recognition application of Deccan Stock Exchange. Which statement correctly reflects Section 4?

The Central Government must first give the stock exchange an opportunity of being heard, and then communicate the reasons for refusal to it in writing. Section 4(4) allows no refusal without such a hearing.

  1. AIt may refuse without hearing if the public interest requires
  2. BIt must give the exchange an opportunity of being heard and communicate the reasons for refusal in writingCorrect
  3. CIt need only communicate the reasons orally
  4. DIt must refer the matter to the State Government before refusing

Explanation

Section 4(4) says no application can be refused except after giving the exchange an opportunity to be heard, and the reasons for refusal must be communicated in writing. There is no exception for public interest.

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