Prohibition of Fraudulent and Unfair Trade Practices

SECURITIES AND EXCHANGE BOARD OF INDIA (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECURITIES MARKET) (AMENDMENT) REGULATIONS, 2022

No. SEBI/LAD-NRO/GN/2022/71.—In exercise of the powers conferred under Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, namely: –

1. These regulations may be called the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) (Amendment) Regulations, 2022.
   
2. They shall come into force on the date of their publication in the Official Gazette.
   
3. In the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, –
   
   I. In regulation 2, sub-regulation (2) shall be substituted with the following, namely–
   
   “(2) The words and expressions used and not defined in these regulations but defined in the Act, the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Depositories Act, 1996 (22 of 1996), the Companies Act, 2013 (18 of 2013), or any rules or regulations made thereunder shall have the same meanings respectively assigned to them in those acts, rules or regulations made thereunder or any statutory modification or re-enactment thereto, as the case may be”.
   
   II. In regulation 4, in sub-regulation (2), clause (k) shall be substituted with the following, namely–
   
   “(k) disseminating information or advice through any media, whether physical or digital, which the disseminator knows to be false or misleading in a reckless or careless manner and which is designed to, or likely to influence the decision of investors dealing in securities;”
   
   III. In regulation 6,
   
   i. in clause (2), after the words “has been conducting” and before the words “in violation of”, the words “its activities” shall be inserted;
   
   ii. in clause (4), the words “one month which may be extended upto a period of” and the words “by the Board” shall be omitted;
   
   iii. after clause (6), the following new clauses shall be inserted, namely–
   
   “(7) to call for information and record from any person including any bank or any other authority or board or corporation established or constituted by or under any Central, State or Provincial Act in respect of any transaction in securities which are under investigation;
   
   (8) to make an application to the Judge of the designated court in Mumbai as notified by the Central Government for an order for the seizure of any books, registers, other documents and record, if in the course of investigation, the Investigating Authority has reasonable ground to believe that such books, registers, other documents and record of, or relating to, any intermediary or any person associated with securities market in any manner may be destroyed, mutilated, altered, falsified or secreted;
   
   (9) to keep in his custody the books, registers, other documents and record seized under these regulations for such period not later than the conclusion of the investigation as he considers necessary and thereafter to return the same to the person, the company or the other body corporate, or, as the case may be, to the managing director or the manager or any other person from whose custody or power they were seized:
   Provided that the Investigating Authority may, before returning such books, registers, other documents and record as aforesaid, place identification marks on them or any part thereof;
   
   (10) save as otherwise provided in this regulation, every search or seizure made under this regulation shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) relating to searches or seizures made under that Code.”
   
   IV. Regulation 7 shall be omitted.
   
   V. In regulation 8,
   
   i. in sub-regulation (1),
   
   a. the words and figure “under regulation 7” shall be substituted with the words and figure “under regulation 5”;
   b. in clause (b), the words and figure “or regulation 7” shall be omitted;
   
   ii. in sub-regulation (3),
   a. in clause (a), after the words “Investigating Authority” and before the words “to have access”, the words “or any person authorized by him in this behalf” shall be inserted;
   b. in clause (b), after the words “Investigating Authority” and before the words “reasonable facilities”, the words “or any person authorized by him in this behalf” shall be inserted;
   c. clause (c) shall be substituted with the following, namely–
   “(c) provide to such Investigating Authority or any person authorized by him in this behalf any such books, accounts and records which, in the opinion of the Investigating Authority, are relevant to the investigation or, as the case may be, allow the Investigating Authority or any person authorized by him in this behalf to take computer print-outs thereof.”
   
   VI. In regulation 11, sub-regulation (2) shall be substituted with the following, namely–
   
   “(2) Any final order passed under sub- regulation (1) shall be put on the website of the Board.”
   
   VII. Regulation 11A shall be substituted with the following, namely–
   
   “Manner of service of summons and notices issued by the Board.
   
   11A. (1) A summons or notice issued by the Board under these regulations shall be served on the person through any of the following modes, namely—
   
   (a) by delivering or tendering it to that person or his duly authorised agent; or
   
   (b) by sending it to the person by fax or electronic mail or electronic instant messaging services along with electronic mail or by courier or speed post or registered post:
   Provided that the courier or speed post or registered post shall be sent to the address of his place of residence or his last known place of residence or the place where he carried on, or last carried on, business or personally works, or last worked, for gain, with acknowledgment due:
   Provided further that a summons or notice sent by fax shall bear a note that the same is being sent by fax and in case the document contains annexure, the number of pages being sent shall also be mentioned:
   Provided further that a summons or notice sent through electronic mail or electronic instant messaging services along with electronic mail shall be digitally signed by the competent authority and bouncing of the electronic mail shall not constitute valid service.
   
   (2) In case of failure to serve a summons or notice through any one of the modes provided under sub-regulation (1), the summons or notice may be affixed on the outer door or some other conspicuous part of the premises in which the person resides or is known to have last resided, or carried on business or personally works, or last worked, for gain and a written report thereof shall be prepared in the presence of two witnesses.
   
   (3) In case of failure to affix the summons or notice on the outer door as provided under sub-regulation (2), the summons or notice shall be published in at least two newspapers, one of which shall be in an English daily newspaper having nationwide circulation and another shall be in a newspaper having wide circulation published in the language of the region where that person was last known to have resided or carried on business or personally worked for gain.”
   
   VIII. In regulation 12,
   
   i. in sub-regulation (1), the words and symbols “the provisions contained in sub-sections (1), (2), (2A) and (3) of section 11 and section 11B of the Act” shall be substituted with the words and symbol “any action under the securities laws or directions or circulars issued thereunder”;
   ii. in proviso to sub-regulation (1), the words and symbols “(Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002” shall be replaced with the words and symbols “(Intermediaries) Regulations, 2008”.

Notification

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• Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2022.
• Issue of Capital and Disclosure Requirements (Amendment)
• Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2022.

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