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CS Executive · Capital Market and Securities Laws · Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market

Under the SEBI Act, 1992, a person is found by the Adjudicating Officer to have indulged in fraudulent and unfair trade practices relating to securities. What is the minimum monetary penalty that can be imposed?

The minimum penalty is five lakh rupees. Section 15HA of the SEBI Act states that the penalty for fraudulent and unfair trade practices relating to securities shall not be less than five lakh rupees, though it can go much higher depending on the gravity and profits made.

  1. ARupees one lakh
  2. BRupees five lakhCorrect
  3. CRupees twenty-five lakh
  4. DRupees five crore

Explanation

Section 15HA provides that the penalty shall not be less than five lakh rupees. The upper limit is twenty-five crore rupees or three times the profits, whichever is higher. Rupees twenty-five lakh and five crore are not the statutory floor.

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