Securities Law Update – For April & May 2017

REGULATORY AMENDMENTS

I. Significant amendments proposed to the SEBI Act

In the month of November, 2015, the Hon'ble Supreme Court has passed judgment in case of Roofit Industries v. SEBI wherein it was held that for the offences committed during the period October, 2002 to September, 2014, the Adjudicating Officer, SEBI has no power to exercise discretion under section 15J of the SEBI Act, 1992 for deciding the quantum of penalty and therefore, failure to furnish the required document, report or return to SEBI would attract a penalty of Rs. 1 lakh for each day of such failure or Rs. 1 crore, whichever is less. As per the said order, the intention of the legislature amending the SEBI Act was to impose harsher penalties for certain offence and therefore, the court found no reason to water them down. The said judgment has caused a fair bit of ripples in the securities market for obvious reasons.