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CS Executive · Capital Market and Securities Laws · Acquisition of Shares and Takeovers - Concepts

Which of the following best describes the effect of Section 12A(f) of the SEBI Act, 1992 on a takeover of a company whose securities are proposed to be listed on a recognised stock exchange?

Section 12A(f) applies to companies whose securities are listed or proposed to be listed on a recognised stock exchange, so the bar on contravening acquisitions of control or excess securities can apply even before actual listing. It is not limited to listed companies or to brokers.

  1. AIt covers companies whose securities are listed or proposed to be listed, so the prohibition can apply before actual listingCorrect
  2. BIt applies only after the securities are actually listed
  3. CIt applies only to unlisted private companies
  4. DIt applies only to registered stock-brokers

Explanation

Section 12A(f) refers to a company whose securities are listed or proposed to be listed on a recognised stock exchange. Hence a company that is about to list is also covered. It is not limited to already listed companies, unlisted private companies or brokers.

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