CS Executive · Capital Market and Securities Laws · Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market
Which description best matches how Section 15HA of the SEBI Act, 1992 fixes the upper limit of penalty for fraudulent and unfair trade practices relating to securities?
The upper limit is twenty-five crore rupees or three times the profits made, whichever is higher. Section 15HA uses the higher of the two so that large profits cannot escape with a capped penalty, while a fixed rupee ceiling still applies where profits are small.
- ATwenty-five crore rupees or three times the profits made, whichever is lower
- BTwenty-five crore rupees or three times the profits made, whichever is higherCorrect
- CThree times the profits made, with no fixed rupee amount
- DTwenty-five crore rupees in all cases regardless of profits
Explanation
The section says the penalty may extend to twenty-five crore rupees or three times the profits made out of such practices, whichever is higher. 'Lower' reverses the rule, and the other options ignore one of the two limbs.
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