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CS Executive · Capital Market and Securities Laws · Securities and Exchange Board of India

The Central Government wants to end the services of a clause (d) member of SEBI before the prescribed term expires. Under section 5 of the SEBI Act, which is the correct position?

The Central Government may terminate such a member before the term ends by giving not less than three months' written notice or three months' salary and allowances in lieu. The member may also resign on three months' written notice. No Tribunal approval is required.

  1. AIt may do so by giving at least three months' written notice or three months' salary and allowances in lieuCorrect
  2. BIt may do so only with immediate effect and without any notice
  3. CIt may do so only after obtaining approval of the Securities Appellate Tribunal
  4. DIt may do so by giving one month's notice, and the member cannot resign early

Explanation

Section 5(2) lets the Central Government terminate the services of the Chairman or a clause (d) member before expiry by notice of not less than three months in writing or three months' salary and allowances in lieu. The member may likewise relinquish office on three months' written notice. No Tribunal approval is needed.

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