Regulation 68 - Liability for action in case of default - Securities and Exchange Board of India (Mutual Funds) Regulations, 1996

CHAPTER IX PROCEDURE FOR ACTION IN CASE OF DEFAULT 1 [Liability for action in case of default 68. A mutual fund which- (a) contravenes any of the provisions of the Act and these regulations; (b) fails to furnish any information or furnishes wrong information relating to its activity as a mutual fund as required under these regulations; (c) fails to submit periodical returns as required under these regulations; (d) does not co-operate in any inquiry or inspection conducted by the Board; (e) fails to comply with any directions of the Board issued under the provisions of the Act or the regulations; (f) fails to resolve the complaints of the investors or fails to give a satisfactory reply to the Board in this behalf; (g) indulges in unfair trade practices in securities. Explanation.-For the purposes of this clause unfair trade practices has the same meaning as in 3 [ the S ecurities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations 2003 ] ; (h) is guilty of misconduct or improper or unbusiness like or unprofessional conduct which is not in accordance with the Code of Conduct specified in the Fifth Schedule; (i) asset management company fails to maintain the net worth in accordance with the provisions of regulation 21; (j) fails to pay any fees; (k) violates the conditions of registration; (l) mutual fund, asset management company or trustees of that mutual fund does not carry out its obligations as specified in these regulations, shall be dealt with in the manner provided under 2 [ Chapter V of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 ].] ************** NOTES:- 1 Substituted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, w.e.f. 27-9-2002. Prior to its substitution, regulation 68 read as under; The Board may suspend a certificate granted to a mutual fund if such mutual fund : - (a) contravenes any of the provisions of the Act and these regulations; (b) fails to furnish any information or furnishes wrong information relating to its activity as a mutual fund as required under these regulations; (c) fails to submit periodical returns as required under these regulations; (d) does not co-operate in any inquiry or inspection conducted by the Board; (e) fails to comply with any directions of the Board issued under the provisions of the Act or the regulations; (f) fails to resolve the complaints of the investors or fails to give a satisfactory reply to the Board in this behalf; (g) indulges in unfair trade practices in securities; Explanation: For the purpose of this clause unfair trade practices has the same meaning as in Securities Exchange Board of India (Fraudulent and Unfair Trade Practices in Securities Market) Regulations, 1995; (h) is guilty of misconduct or improper or unbusinesslike or unprofessional conduct which is not in accordance with the Code of Conduct specified in the Fifth Schedule; (i) asset management company fails to maintain the networth in accordance with the provisions of regulation 21; (j) fails to pay any fees; (k) violates the conditions of registration; (l) mutual fund, asset management company or trustees of that mutual fund does not carry out its obligations as specified in these regulations. 2. Substituted for the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 by the SEBI (Intermediaries) Regulations, 2008, w.e.f. 26-5-2008. 3. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995