Section 15J of The Securities and Exchange Board of India Act, 1992
- (a)the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default;
- (b)the amount of loss caused to an investor or group of investors as a result of the default;
- (c)the repetitive nature of the default. 3[Explanation.—For the removal of doubts, it is clarified that the power 4*** to adjudge the quantum of penalty under sections 15A to 15E, clauses (b) and (c) of section 15F, 15G, 15H and 15HA shall be and shall always be deemed to have been exercised under the provisions of this section.]
Summary
- This rule tells the deciding officers what factors to consider when choosing the exact fine amount to charge someone.
- They must look at how much unfair profit or advantage the rule-breaker gained, if that amount can be measured.
- They must check how much money investors lost because of the bad behavior.
- They must consider if the rule-breaker has done this same bad thing before.
- This weighing of factors applies to many specific penalties in the law, such as failing to give information, default by stock brokers, or insider trading.
Practical examples
FAQ
1. Who uses these factors to decide the fine?
The Securities and Exchange Board of India or the adjudicating officer uses these factors.
2. Does the officer only look at the profit the rule-breaker made?
No, the officer must also look at the loss caused to investors and whether the bad behavior was repetitive.
Test yourself
Q1.Under Section 15J of The Securities and Exchange Board of India Act, 1992, which of the following is a specific factor an adjudicating officer must have due regard to when deciding the amount of a penalty?
Q2.Under Section 15J of The Securities and Exchange Board of India Act, 1992, what must the Board consider regarding the impact on other people when judging a penalty?
Q3.Section 15G of The Securities and Exchange Board of India Act, 1992, creates a penalty for insider trading. How does Section 15J interact with someone caught under Section 15G?
Q4.Section 15A of The Securities and Exchange Board of India Act, 1992, imposes a penalty for failing to furnish a required return. If a company fails to file its return for the fifth year in a row, how does Section 15J guide the penalty decision?