(1) The Board shall, after consideration of the report referred to in regulation 55, communicate the findings to the trustee or Collective Investment Management Company as the case may be, andgive him an opportunity of being heard within fourteen days from the date of receipt of such communication.
(2) Without prejudice to its right to initiate necessary action under the Act and these regulations, the Board upon receipt of the reply, if any, from the trustee or Collective Investment ManagementCompany may call upon it to take such remedial measures as the Board may direct in this behalfand may also initiate action under Chapter VIII of these regulations.‖ 174Substituted for ―the Securities and Exchange Board of India (Procedure for Holding Enquiry byEnquiry Officer and Imposing Penalty) Regulations, 2002‖ by the SEBI (Intermediaries) Regulations, 2008, w.e.f. 26-05-2008.
175 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.
176 Omitted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty)Regulations, 2002, w.e.f. 27-09-2002.
177 Liability for action in case of default
59. In case a Collective Investment Management Company—
(a) contravenes any provision of the Act or these regulations;
(b) for the purposes of these regulations furnishes any informationwhich is false or misleading or suppresses any material information;
(c) does not co-operate in any inspection, investigation or inquiryconducted by the Board under the Act or these regulations;
(d) fails to comply with any directions issued by the Board underthe Act or the regulations;
(e) fails to resolve the complaints of the investors or fails to furnishto the Board a satisfactory reply in this behalf when called upon todo so by the Board;
(f) commits a breach of any provision of the Code of Conductspecified in the Third Schedule;
(g) fails to pay the fees specified in the Second Schedule;
(h) commits a breach of the conditions of registration; or
(i) fails to make an application for listing or fails to list units of a 178 [collective investment scheme] in a recognized stock exchange,shall be dealt with in the manner provided in 179 [Chapter V of theSecurities and Exchange Board of India (Intermediaries)Regulations, 2008].
60. to 64.
180 [***] Directions by the Board
65. The Board may, in the interests of the securities market and the investorsand without prejudice to its right to initiate action under this Chapter, includinginitiation of criminal prosecution under section 24 of the Act, give suchdirections as it deems fit in order to ensure effective observance of theseregulations, including directions:
177Substituted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and ImposingPenalty) Regulations, 2002, w.e.f, 27-09-2002.
178Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.
179Substituted for ―the Securities and Exchange Board of India (Procedure for Holding Enquiry byEnquiry Officer and Imposing Penalty) Regulations, 2002‖ by the SEBI (Intermediaries)Regulations, 2008, w.e.f. 26-05-02008.
180Regulations 60 to 64 omitted by the SEBI (Procedure for Holding Enquiry by Enquiry Officerand Imposing Penalty) Regulations, 2002, w.e.f. 27-09-2002.
(a) requiring the person concerned not to collect any money frominvestors or to launch any 181 [collective investment scheme];
(b) prohibiting the person concerned from disposing of any of theproperties of the 182 [collective investment scheme] acquired in violation of these regulations;
(c) requiring the person concerned to dispose of the assets of the 183 [collective investment scheme] in a manner as may be specified in the directions;
(d) requiring the person concerned to refund any money or theassets to the concerned investors along with the requisite interest orotherwise, collected under the 184 [collective investment scheme];
(e) prohibiting the person concerned from operating in the capitalmarket or from accessing the capital market for a specified period.
Action against intermediaries
66. The Board may initiate action for suspension or cancellation ofregistration of an intermediary holding a certificate of registration undersection 12 of the Act who fails to exercise due diligence in the performance ofits functions or fails to comply with its obligations under these regulations :
Provided that no such certificate of registration shall be suspended orcancelled unless the procedure specified in the regulations applicable to suchintermediary is complied with.
Appeal to the Central Government 185
67. Any person aggrieved by an order of the Board made, on and after thecommencement of the Securities Laws (Second Amendment) Act, 1999, (i.e.,after 16th December, 1999), under these regulations may prefer an appeal toa Securities Appellate Tribunal having jurisdiction in the matter.]
181Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.
182ibid.
183ibid.
184ibid.
185 Substituted by the SEBI (Appeal to the Securities Appellate Tribunal) (Amendment)Regulations, 2000, w.e.f. 28-03-2000. Prior to its substitution the regulation read as under:
― 67. Any person aggrieved by an order of the competent authority or the Board under theseregulations:
(a) suspending the certificate of registration; or
(b) canceling such certificate; or
(c) issuing directions under regulation 65 may prefer an appeal to the Central Government against such order, in accordance with theSecurities and Exchange Board of India ( Appeals to Central Government) Rules, 1993."
CHAPTER IX EXISTING COLLECTIVE INVESTMENT SCHEMES Existing 186 [collective investment scheme]s to obtain provisional registration