Securities Intermediaries Compliance (Non Fund) Free Demo Test 6

Registration of Intermediaries – The Section 12 of SEBI Act states that no person shall sponsor or cause to be sponsored or carry on or caused to be carried on any venture capital funds or collective investment schemes including mutual funds if the same does not obtain a certificate of registration from SEBI.

As per the code of conduct of SEBI (Merchant Bankers) Regulations, the Merchant Banker should ensure that SEBI is promptly informed about any action, legal proceedings, etc., initiated against it in respect of material breach or non-compliance by it, of any law, rules, regulations, and directions of SEBI or of any other regulatory body.

a) Summoning and enforcing the attendance of any person and examining him on oath

b) Requiring the discovery and production of documents

c) Receiving evidence on affidavits

d) Issuing commissions for the examination of witnesses or documents

e) Reviewing its decisions

f) Dismissing an application for default or deciding it ex-parte

g) Setting aside any order of dismissal of any application for default or any order passed by it ex-parte

h) Any other matter which may be prescribed

As per Section 15U (2), the SAT shall have, for discharging its functions, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters:

a) Summoning and enforcing the attendance of any person and examining him on oath

b) Requiring the discovery and production of documents

c) Receiving evidence on affidavits

d) Issuing commissions for the examination of witnesses or documents

e) Reviewing its decisions

f) Dismissing an application for default or deciding it ex-parte

g) Setting aside any order of dismissal of any application for default or any order passed by it exparte

h) Any other matter which may be prescribed

As per the SEBI Act, an organisation / firm needs to appoint a compliance officer who is responsible for setting forth policies and procedures and monitoring adherence to the rules for the preservation of “Price Sensitive Information”, pre-clearing of all designated employees and their dependents trades, monitoring of trades and the implementation of the code of conduct under the overall supervision of the partners/proprietors.

All registered intermediaries should develop customer acceptance policies and procedures that aim to identify the types of customers that are likely to pose a higher than the average risk of money laundering or terrorist financing. By establishing such policies and procedures, the intermediaries will be in a position to apply Client Due Diligence on a risk sensitive basis depending on the type of customer business relationship or transaction.

Dealing in securities shall be deemed to be a fraudulent or an unfair trade practice if it involves encouraging the clients by an intermediary to deal in securities solely with the object of enhancing his brokerage or commission.

Records have to be maintained for all cash transactions of the value of more than Rs. 10 lakh or its equivalent in foreign currency.