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

Under Section 11A of the SEBI Act, 1992, SEBI acts by general or special orders in respect of a company that is soliciting money from the public. Which action is within this power?

SEBI can, by general or special orders, prohibit a company from issuing a prospectus, offer document or advertisement soliciting money from the public, or specify conditions for issuing them. It has no power under this section to convert shares, force foreign listing or cancel incorporation.

  1. AProhibit the company from issuing a prospectus, offer document or advertisement soliciting money from the public for issue of securitiesCorrect
  2. BCompel the company to convert all its equity shares into preference shares
  3. CRequire the company to list on a foreign stock exchange
  4. DCancel the incorporation of the company under the Companies Act

Explanation

Section 11A(1)(b) allows SEBI, by general or special orders, to prohibit a company from issuing a prospectus, offer document or advertisement soliciting money, or to specify conditions subject to which these may be issued. The other actions are not provided in that section.

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