CMA Final · Corporate and Economic Laws · SEBI Laws and Regulations
Under the Depositories Act, 1996, a depository makes its bye-laws in which manner?
A depository must make its bye-laws with the previous approval of SEBI, and the bye-laws must be consistent with the Depositories Act and the regulations. Subsequent intimation alone is insufficient, and approval of participants or issuers cannot replace SEBI's approval.
- AIndependently, with intimation to SEBI after they are made
- BWith the previous approval of SEBI, consistent with the Act and the regulationsCorrect
- CWith the approval of the Central Government, consistent with the Companies Act only
- DWith the approval of the participants and the issuers, without reference to SEBI
Explanation
Section 26(1) requires a depository to make bye-laws with the previous approval of the Board (SEBI), consistent with the Act and the regulations. Mere intimation after making them is not enough.
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