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

Under Section 12A(2) of the SCRA, 1956, SEBI wishes to levy a penalty on an erring person. What must SEBI do?

SEBI must pass an order recording reasons in writing, after holding an inquiry in the prescribed manner. Section 12A(2) of the SCRA requires this procedure and does not require a civil court decree or prior Central Government sanction before a penalty is levied.

  1. ALevy it orally without recording reasons
  2. BLevy it by an order for reasons recorded in writing after holding an inquiry in the prescribed mannerCorrect
  3. CLevy it only after the Central Government sanctions it
  4. DLevy it only through a civil court decree

Explanation

Section 12A(2) empowers SEBI to levy penalty under the listed sections by an order, for reasons to be recorded in writing, after holding an inquiry in the prescribed manner. It does not need a civil court decree or Central Government sanction.

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