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CS Executive · Capital Market and Securities Laws · Secondary Market in India

Under Section 12A of the Securities Contracts (Regulation) Act, 1956, SEBI may issue directions to certain persons. Which of the following is a person to whom SEBI can issue directions under that section?

SEBI can issue directions to any company whose securities are listed or proposed to be listed on a recognised stock exchange. The power is not limited to exchanges or to already-listed companies, and it also covers clearing corporations and persons associated with the securities market.

  1. AOnly recognised stock exchanges
  2. BOnly companies whose securities are already listed
  3. CAny company whose securities are listed or proposed to be listed on a recognised stock exchangeCorrect
  4. DOnly the Central Government departments dealing with securities

Explanation

Section 12A(1)(ii) extends directions to any company whose securities are listed or proposed to be listed in a recognised stock exchange. Clause (i) also covers stock exchanges, clearing corporations, agencies and persons associated with the securities market. So limiting it to exchanges or only already-listed companies is wrong.

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