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

Under the SEBI Act, 1992, which power does the Board have regarding prospectuses and offer documents for the protection of investors?

SEBI may specify by regulations the matters relating to issue of capital and how companies disclose them, and by general or special orders prohibit a prospectus, offer document or advertisement soliciting money from the public, or specify the conditions for issuing it. This is under Section 11A.

  1. AOnly to approve every prospectus filed by a company
  2. BOnly to recommend disclosure formats to the Registrar
  3. CTo specify disclosure matters by regulations and by orders prohibit or set conditions for prospectus, offer document or advertisement soliciting moneyCorrect
  4. DTo rewrite the Companies Act provisions on prospectus

Explanation

Section 11A empowers SEBI to specify by regulations the matters on issue of capital and manner of disclosure, and by general or special orders to prohibit or condition issue of a prospectus, offer document or advertisement soliciting money. The other options misstate its scope.

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