Home Acts & Rules SEBI Old-Provisions SECURITIES AND EXCHANGE BOARD OF INDIA (CRITERIA FOR FIT AND PROPER PERSON) REGULATIONS, 2004 Chapters List CRITERIA FOR FIT AND PROPER PERSON This
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Regulation 3 - Criteria for determining a ‘fit and proper person - SECURITIES AND EXCHANGE BOARD OF INDIA (CRITERIA FOR FIT AND PROPER PERSON) REGULATIONS, 2004Extract 3. Criteria for determining a fit and proper person (1) For the purpose of determining as to whether an applicant or the intermediary seeking registration under any one or more of the relevant regulations is a fit and proper person , the Board may take account of any consideration as it deems fit, including but not limited to the following criteria (a) financial integrity; (b) absence of convictions or civil liabilities; (c) competence; (d) good reputation and character; (e) efficiency and honesty; and (f) absence of any disqualification to act as an intermediary as stipulated in these regulations. (2) A person shall not be considered as a fit and proper person for the purpose of grant or renewal of certificate to act as an intermediary or to continue to act as an intermediary under any one or more of the relevant regulations, if he incurs any of the following disqualifications - (a) the applicant or the intermediary, as the case may be or its whole time director or managing partner has been convicted by a Court for any offence involving moral turpitude, economic offence, securities laws or fraud; (b) an order for winding up has been passed against the applicant or the intermediary; (c) the applicant or the intermediary, or its whole time director, or managing partner has been declared insolvent and has not been discharged; (d) an order, other than an order of suspension of certificate of registration as an intermediary, restraining, prohibiting or debarring the applicant or the intermediary, or its whole time director or managing partner from dealing in securities in the capital market or from accessing the capital market has been passed by the Board or any other regulatory authority and a period of three years from the date of the expiry of the period specified in the order has not elapsed; (e) an order canceling the certificate of registration of the applicant or the intermediary has been passed by the Board on the ground of its indulging in insider trading, fraudulent and unfair trade practices or market manipulation and a period of three years from the date of the order has not elapsed; (f) an order withdrawing or refusing to grant any license / approval to the applicant or the intermediary, or its whole time director or managing partner which has a bearing on the capital market, has been passed by the Board or any other regulatory authority and a period of three years from the date of the order has not elapsed; Provided that the Board may for reasons to be recorded in writing, allow the applicant or the intermediary, to seek registration before the lapse of three years as specified in clauses (d), (e) and (f). (g) the applicant or the intermediary, is financially not sound; (h) any other reason, to be recorded in writing by the Board, which in the opinion of the Board, renders such applicant or the intermediary, or its whole time director or managing partner unfit to operate in the capital market. Explanation 1. For the purpose of this regulation whole time director , in relation to (a) a mutual fund shall mean its sponsors, directors, principal officers, trustees or whole time directors of its asset management company; (b) a venture capital fund, (i) where such venture capital fund is a trust, shall mean the whole time directors of its trustee company. (ii) where such venture capital fund is a body corporate, shall mean its whole time directors or the trustees. 2. For the purpose of clause (g) of sub-regulation (2), the Board shall take into consideration the capital adequacy or networth of the applicant or the intermediary, wherever it has been so specified in the relevant regulations;
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