Regulation 30A - Summary Proceedings - Securities and Exchange Board of India (Intermediaries) Regulations, 2008

2 [Summary Proceedings 30A (1). Notwithstanding anything contained in these regulations, the procedure as provided under this regulation shall be applied to - (a) the stock broker or a clearing member, in respect of which intimation has been received by the Board from all the stock exchange(s) or the clearing corporation(s), as the case may be, of which it was a member, that such stock broker or clearing member has been expelled as its member; (b) a depository participant, in respect of which intimation has been received by the Board from all the depository(ies) where the participant was admitted, that the depository participant agreement has been terminated by the depository(ies); (c) a person found to have made claim(s) of return or performance in respect of or related to a security or securities, unless otherwise permitted by the Board to make such claim(s); (d) a person which fails to pay the fees, to the Board or to such body as may be specified, in terms of provisions of the relevant regulations governing such a person; (e) a person not traceable at its physical address and email address available in the records of the Board; (f) a person which has failed to submit periodic reports to the Board for three consecutive periods or such other period(s) as may be specified in the relevant regulations or circulars issued thereunder which govern such a person; (g) a person which has admitted to have violated any of the provisions of the securities laws or directions, instructions or circulars issued by the Board. (2) The competent authority shall issue a notice to the person referred to in sub-regulation (1) communicating the grounds for initiation of the proceedings under this regulation and the violation(s) alleged to have been committed by such person. (3) The notice issued under sub-regulation (2) shall require the noticee to make submission(s), if any, within twenty-one calendar days from the date of receipt of the notice, only through a written response, along with documentary evidence, if any, as to why the certificate of registration granted under the Act and the regulations made thereunder shall not be cancelled or suspended: Provided that the competent authority may, for the reasons to be recorded, permit the noticee to submit a written response within a further period not exceeding fifteen calendar days. (4) No further opportunity beyond the timelines specified in sub-regulation (3) shall be allowed. (5) After considering the facts and circumstances of the case, material on record and the written submissions, if any, the competent authority shall endeavor to pass an order within twenty-one calendar days from (i) the date of receipt of the written submissions of the noticee; or (ii) the date of expiry of the time period granted by the competent authority to file the written submissions under sub-regulation (3), in case no written submissions are filed within the specified period. (6) No opportunity of personal hearing shall be granted while disposing of the proceedings initiated under this regulation. (7) The competent authority shall pass an appropriate order of cancellation or suspension of the certificate of registration of the noticee or any other order, as deemed fit. (8) The competent authority may, while passing the order, impose such conditions upon the noticee as it deems fit to protect the interest of the investors or the clients of the noticee or the securities market. (9) While passing the order, the competent authority shall, wherever considered necessary, require the noticee to satisfy the Board on the following (a) arrangements made for maintenance and preservation of records and other documents as required under the relevant regulations; (b) redressal of investor grievances; (c) transfer of records, funds or securities of its clients; (d) arrangements made for ensuring continuity of service to the clients; (e) defaults or pending action, if any; (f) such other conditions in the interest of investors or the client(s) of the noticee or the securities market. (10) On and from the date of cancellation of the certificate of registration, the noticee shall forthwith (a) return to the Board the certificate of registration so cancelled, if the same has been issued in the physical form and shall not represent itself to be a holder of the certificate for any purpose; (b) cease to carry on any activity in relation to which the certificate had been granted; (c) transfer its activities to another person holding a valid certificate of registration to carry on such activity or allow its clients or investors to withdraw or transfer their securities or funds held in its custody or to withdraw any assignment given to it, without any additional cost to such client or investor; (d) make provisions as regards any liability incurred or assumed by it; (e) take such other action including action relating to any record(s) or document(s) and securities or money of the investors that may be in the custody or control of such person, within the time and in the manner, as may be required under the relevant regulations or as may be directed by the competent authority while passing the order under this regulation. (11) A copy of the order passed under this regulation shall be (a) sent to the noticee; (b) sent to the stock exchange(s) or the clearing corporation(s) or the depository(ies) or the body or body corporate recognized by the Board for administration and supervision of the intermediary, as the case may be, and shall be uploaded on their respective websites; and (c) uploaded on the website of the Board. ] ************** NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/20 dated 05-05-2021 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/216 dated 04-12-2024 before it was read as, 1 [ 30A. Special procedure for action on expulsion from membership of the stock exchange(s) or clearing corporation(s) or termination of all the depository participant agreements with depository (ies) (1) While disposing of the proceedings under this regulation, the Board shall not be bound by the procedure specified in the foregoing provisions of this Chapter. (2) On receipt of intimation from all the stock exchange(s) or clearing corporation(s) of which the stock-broker or clearing member, as the case may be, was a member, that such stock broker or clearing member, has been expelled from its membership, the Board may issue a notice to such stock broker or clearing member calling upon the noticee to make its submission(s), if any, within a period not exceeding twenty-one days from the date of service thereof, through a written reply, along with documentary evidence, as to why the certificate of registration, granted under the Act or the regulations made thereunder, should not be cancelled. (3) On receipt of intimation from all the depositories where the participant was admitted, that the depository participant agreement has been terminated by the depository(ies), the Board may issue a notice to such participant calling upon the noticee to make its submission(s), if any, within a period not exceeding twenty-one days from the date of service thereof, through a written reply, along with documentary evidence, as to why the certificate of registration, granted under the Act or the regulations made thereunder, should not be cancelled. (4) No opportunity of personal hearing shall be granted while disposing of the proceedings under this regulation. (5) After considering the facts and circumstances of the case, material on record and the written submissions, if any, the Board shall endeavor to pass an order within twenty days from the date of receipt of written submissions. (6) The Board may, while passing such order, impose such conditions upon the person as it deems fit to protect the interest of the investors or its clients or the securities market. (7) The Board may require the person concerned to satisfy the Board the factors as it deems fit, including but not limited to the following - (a) the arrangements made by the person for maintenance and preservation of records and other documents required to be maintained under the relevant regulations; (b) redressal of investor grievances; (c) transfer of records, funds or securities of its clients; (d) the arrangements made by it for ensuring continuity of service to the clients; (e) defaults or pending action, if any. (8) On and from the date of cancellation of the certificate, the person concerned shall- (a) return the certificate of registration so cancelled to the Board and shall not represent itself to be a holder of certificate for carrying out the activity for which such certificate had been granted; (b) cease to carry on any activity in respect of which the certificate had been granted; (c) transfer its activities to another person holding a valid certificate of registration to carry on such activity and allow its clients or investors to withdraw or transfer their securities or funds held in its custody or to withdraw any assignment given to it, without any additional cost to such client or investor; (d) make provisions as regards liability incurred or assumed by it; (e) take such other action including the action relating to any record(s) or document(s) and securities or money of the investors that may be in custody or control of such person, within the time period and in the manner, as may be required under the relevant regulations or as may be directed by the Board while passing order under this Chapter or otherwise. (9) A copy of the order passed under this regulation shall be sent to the noticee and also uploaded on the website of the Board. (10) The intimation of the cancelation of the certificate of registration shall be sent to the stock exchange(s) or the clearing corporation(s) or the depository (ies), as the case may be. ]