Insertion of new section 15HAA.
181. After section 15HA of the principal Act, the following section shall be inserted, namely:-
Penalty for alteration, destruction, etc., of records and failure to protect the electronic database of Board.
‘15HAA. Any person, who-
(a) knowingly alters, destroys, mutilates, conceals, falsifies, or makes a false entry in any information, record, document (including electronic records), which is required under this Act or any rules or regulations made thereunder, so as to impede, obstruct, or influence the investigation, inquiry, audit, inspection or proper administration of any matter within the jurisdiction of the Board.
Explanation.- For the purposes of this clause, a person shall be deemed to have altered, concealed or destroyed such information, record or document, in case he knowingly fails to immediately report the matter to the Board or fails to preserve the same till such information continues to be relevant to any investigation, inquiry, audit, inspection or proceeding, which may be initiated by the Board and conclusion thereof;
(b) without being authorised to do so, access or tries to access, or denies of access or modifies access parameters, to the regulatory data in the database;
(c) without being authorised to do so, downloads, extracts, copies, or reproduces in any form the regulatory data maintained in the system database;
(d) knowingly introduces any computer virus or other computer contaminant into the system database and brings out a trading halt;
(e) without authorisation disrupts the functioning of system database;
(f) knowingly damages, destroys, deletes, alters, diminishes in value or utility, or affects by any means, the regulatory data in the system database; or
(g) knowingly provides any assistance to or causes any other person to do any of the acts specified in clauses (a) to (f), shall be liable to a penalty which shall not be less than one lakh rupees but which may extend to ten crore rupees or three times the amount of profits made out of such act, whichever is higher.
Explanation.-In this section, the expressions "computer contaminant", "computer virus" and "damage" shall have the meanings respectively assigned to them under section 43 of the Information Technology Act, 2000. (21 of 2000.)
Notes on Clauses:
Clauses 177 to 181 seek to amend the certain provisions fo the Securities Exchange Board of India Act, 1992.
It is proposed to amend section 14 of the said Act so as to restrict the accumulation of huge surplus funds with the Securities Exchange Board of India.
It is further proposed to amend section 15C of the said Act so as to provide that failure of any listed company or any person who is registered as an inermediary, to redress investors’ grievances after having been called upon the Board even through any electronic means and not necessarily in writing, may also amount to a penalty under the said section.
It is also proposed to amend section 15F of the said Act so as to provide monetary penalty for failure to issue contract notes in the form and in the manner specified by the stock exchange of which a registered stock broker is a member.
It is also proposed to insert a new section 15HAA so as to provide monetary penalty for alteration, destruction, mutilation, concealment or falsification of information, record, document (including electronic records), relating to a contravention of this Act, so as to impede, obstruct, or influence the investigation, inquiry, audit, inspection or proper administration of any matter within the juridiction of the Board. It also seeks to protect of electronic database of the Board intermediaries regulated by the Board, under the Act.
