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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 is expressly given to SEBI to protect investors in relation to offer documents for issue of securities?

SEBI may prohibit a company, by general or special orders, from issuing a prospectus, offer document or advertisement soliciting money from the public for issue of securities, or specify conditions for issuing it. This is the investor-protection power under section 11A(1)(b) of the SEBI Act.

  1. ATo sentence officers of a company to imprisonment for misstatement in a prospectus
  2. BTo prohibit a company by general or special orders from issuing an offer document soliciting money from the publicCorrect
  3. CTo appoint the Registrar of Companies for registering the offer document
  4. DTo fix the rate of interest payable on debt securities

Explanation

Section 11A(1)(b)(i) lets SEBI, by general or special orders, prohibit any company from issuing a prospectus, offer document or advertisement soliciting money from the public for issue of securities. It also may specify conditions if not prohibited. It gives no power to sentence or to fix interest rates.

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