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

Which statement correctly describes the structure of the penalty under Section 15HA of the SEBI Act, 1992?

Section 15HA imposes a penalty of not less than five lakh rupees, which may extend to twenty-five crore rupees or three times the profits made from the practice, whichever is higher. It is a range with a floor and a ceiling, not a fixed sum.

  1. AA fixed penalty of five lakh rupees with no upper limit
  2. BA penalty of at least five lakh rupees, extending to twenty-five crore rupees or three times the profits made, whichever is higherCorrect
  3. CA penalty of at least five lakh rupees, extending to twenty-five crore rupees or three times the profits made, whichever is lower
  4. DA penalty of at least ten lakh rupees, extending to twenty-five crore rupees or three times the profits

Explanation

The section sets a floor of five lakh rupees and a ceiling of twenty-five crore rupees or three times the profits, whichever is higher. Using 'lower' reverses the rule, and ten lakh rupees is the Section 15H floor.

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