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CS Executive · Capital Market and Securities Laws · Issue and Listing of Non-Convertible Securities

Under section 11A of the SEBI Act, 1992, which power does SEBI have to protect investors in respect of an advertisement soliciting money from the public for issue of securities?

SEBI may, by general or special orders, prohibit a company from issuing a prospectus, offer document or advertisement soliciting money from the public for securities. If not prohibited, SEBI may specify the conditions under which it may be issued, under section 11A of the SEBI Act.

  1. AIt can only recommend changes to the Central Government
  2. BIt may, by general or special orders, prohibit a company from issuing it or specify conditions subject to which it may be issuedCorrect
  3. CIt can approve it only after the Registrar has approved it
  4. DIt has no power over advertisements, only over prospectuses filed with the Registrar

Explanation

Section 11A(1)(b) allows SEBI, by general or special orders, to prohibit any company from issuing a prospectus, offer document or advertisement soliciting money for the issue of securities, or to specify conditions subject to which these may be issued if not prohibited. The other options deny or misstate this power.

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