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CS Executive · Capital Market and Securities Laws · Issue of Capital and Disclosure Requirements

Under the SEBI Act, 1992, which of the following can SEBI do for the protection of investors in relation to a company's public offer?

SEBI can specify by regulations the matters relating to issue of capital and the manner in which companies disclose them. Section 11A of the SEBI Act gives this power for investor protection. It does not extend to fixing prices, approving Articles or guaranteeing returns.

  1. ASpecify by regulations the matters relating to issue of capital and the manner in which companies must disclose themCorrect
  2. BFix the issue price of every public issue of equity shares
  3. CApprove the Articles of Association of every issuing company
  4. DGuarantee minimum returns to subscribers in a public issue

Explanation

Section 11A of the SEBI Act lets the Board specify by regulations the matters relating to issue of capital, transfer of securities and incidental matters, and the manner of their disclosure by companies. The Act gives no power to fix the issue price of every issue, approve Articles, or guarantee returns, so those options are wrong.

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