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Securities And Exchange Board Of India - Section
Section 31 in Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993
31. [ to 38 [Omitted by the Securities (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, w.e.f. 27-09-2002.]
* * *]| 31. Suspension of registration.- (1) A penalty of suspension of registration of a portfolio manager may be imposed where -(i) the portfolio manager violates the provisions of the Act, rules or regulations;(ii) the portfolio manager -(a) fails to furnish any information relating to his activity as portfolio manager as required by the Board;(b) furnishes wrong or false information;(c) does not submit periodical returns as required by the Board;(d) does not co-operate in any enquiry conducted by the Board;(iii) the portfolio manager fails to resolve the complaints of the investors or fails to give a satisfactory reply to the Board in this behalf;(iv) the portfolio manager indulges in manipulating or price rigging or cornering activities;(v) the portfolio manager is guilty of misconduct or improper or unbusinesslike or unprofessional conduct which is not in accordance with the Code of Conduct specified in Schedule III;(vi) the portfolio manager fails to maintain the capital adequacy requirement in accordance with the provisions of regulation 7;(vii) the portfolio manager fails to pay the fees;(viii) the portfolio manager violates the conditions of registration;(ix) the portfolio manager does not carry out his obligations as specified in the regulation.32. Cancellation of registration.- A penalty of cancellation of registration of a portfolio manager may be imposed where:-(i) the portfolio manager indulges in deliberate manipulation or price rigging or cornering activities affecting the securities market and the investors interest;(ii) the financial position of the portfolio manager deteriorates to such an extent that the Board is of the opinion that his continuance as portfolio manager is not in the interest of investors;(iii) the portfolio manager is guilty of fraud, or is convicted of a criminal offence;(iv) the portfolio manager is guilty of repeated defaults of the nature mentioned in regulation 31 provided that the Board furnishes the reasons for cancellation in writing.33. Manner of making order of suspension and cancellation.- No order of penalty of suspension or cancellation, as the case may be, shall be imposed except after holding an enquiry in accordance with the procedure specified in regulation 34.34. Manner of holding enquiry before suspension or cancellation.- (1) For the purpose of holding an enquiry under regulation 33, the Board may appoint an enquiry officer.(2) The enquiry officer shall issue to the portfolio manager a notice at the registered office or the principal place of business of the portfolio manager.(3) The portfolio manager may, within thirty days from the date of receipt of such notice, furnish to the enquiry officer a reply together with copies of documentary or other evidence relied on by him or sought by the Board from the portfolio manager.(4) The enquiry officer shall, give a reasonable opportunity of hearing to the portfolio manager to enable him to make submissions in support of his reply made under sub-regulation (3).(5) Before the enquiry officer, the portfolio manager may either appear in person or through any person duly authorised by the portfolio manager:Provided that no lawyer or advocate shall be permitted to represent the portfolio manager at the enquiry:Provided further that where a lawyer or an advocate has been appointed by the Board as a presenting officer under sub- regulation (6), it shall be lawful for the portfolio manager to present its case through a lawyer or advocate.(6) If it is considered necessary, the enquiry officer may ask the Board to appoint a presenting officer to present its case.(7) The enquiry officer shall, after taking into account all relevant facts and submissions made by the portfolio manager, submit a report to the Board and recommend the penalty to be imposed as also the grounds on the basis of which the proposed penalty is justified.35. Show-cause notice and order.- (1) On receipt of the report from the enquiry officer, the Board shall consider the same and issue a show-cause notice as to why the penalty as proposed by the enquiry officer should not be imposed.(2) The portfolio manager shall within twenty-one days of the date of the receipt of the show- cause notice send a reply to the Board.(3) The Board after considering the reply to the show-cause notice, if received, shall as soon as possible but not later than thirty days from the receipt of the reply, if any, pass such order as it deems fit.(4) Every order passed under sub-regulation (3) shall be self-contained and give reasons for the conclusions stated therein including justification of the penalty imposed by that order.(5) The Board shall send a copy of the order under sub- regulation (3) to the portfolio manager.36. Effect of suspension and cancellation of registration of portfolio manager.- (1) On and from the date of the suspension of the portfolio manager he shall cease to carry on any activity as a portfolio manager during the period of suspension.(2) On and from the date of cancellation, the portfolio manager shall with immediate effect cease to carry on any activity as a portfolio manager.37. Publication of order of suspension.- The order of suspension or cancellation of certificate passed under sub-regulation (3) of regulation 35 shall be published in at least two daily newspapers by the Board.38. Appeal to the Securities Appellate Tribunal.- Any person aggrieved by an order of the Board made, on and after the commencement of the Securities Laws (Second Amendment) Act, 1999, (i.e., after 16th December 1999), under these regulations may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter. |