Section 26 in Securities and Exchange Board of India (Underwriters) Regulations, 1993
26. Suspension, cancellation of certificate.-
(1)A penalty of suspension of certificate granted to an underwriter or a certificate of registration granted under section 12 of the Act to a stock broker or a merchant banker entitled to carry on business of underwriting without obtaining a certificate under rule 3, may be imposed where an underwriter or such stock broker or merchant banker-(i)violates the provisions of the Act, rules or regulations;(ii)does not follow the code of conduct specified at Schedule III;(iii)(a)fails to furnish any information relating to his business as underwriter 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;(iv)indulges in manipulating or price rigging or cornering activities;(v)is guilty of misconduct or improper or unbusiness like or unprofessional conduct;(vi)fails to maintain the capital adequacy requirement in accordance with the provisions of regulation 7.(vii)fails to pay the fees as specified in regulation 12;(viii)violates the conditions of registration;(ix)fails to fulfil his underwriting obligations.Provided that the Board for reasons to be recorded in writing may in case of repeated defaults of the type mentioned above impose a penalty of cancellation of certificate on the underwriter or cancellation of certificate of registration granted under section 12 of the Act on a stock broker or a merchant banker.(2)A penalty of cancellation of certificate granted to an underwriter or a certificate of registration granted under section 12 of the Act to a stock broker or a merchant banker entitled to carry on the business of underwriting under rule 3, may be imposed where they.(i)indulge in deliberate manipulation or price rigging or cornering activities affecting the securities market and the investors interest;(ii)fail to fulfil the capital adequacy referred to in regulation 7;(iii)are guilty of fraud, or is convicted of a criminal offence;(iv)violate any provision of Securities and Exchange Board of India (Insider Trading) Regulations, 1992; or(v)violate the provisions of the Act, rules and regulations;(vi)fails to fulfil more than once their underwriting obligations.
