CHAPTER II
 
ESTABLISHMENT OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
 

Establishment and incorporation of Board

3. (1) Notwithstanding the repeal of the Securities and Exchange Board of India Act 1992, the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 shall continue to function as a statutory Board under this Act by the name of Securities and Exchange Board of India with additional powers, functions and duties under this Act.

(2) The Board shall be a body corporate by the name aforesaid having perpetual succession and a common seal, with power subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall, by the said name, sue or be sued.

(3) For the sake of avoidance of any doubt, it is hereby declared that all the rights, liabilities, contracts, actions or proceedings shall continue to be vested or performed by the Board and the provisions of Section 10 of Securities and Exchange Board of India Act 1992 shall continue to be applicable to the Board without any break of any nature whatsoever in its continuity.

(4) The head office of the Board shall be at Mumbai.

(5) The Board may establish offices at other places in India.

 4. Management of the Board namely:- (1) The Board shall consist of the following members namely, (a) a Chairman

(b) two representatives from amongst the officials of the Ministries of the Central Government, dealing with Finance and Law;

(c) one representative from amongst the official of the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934;

(d) three other appointees,

to be appointed by the Central Government.

 (2) The general superintendence, direction and management of the affairs of the Board shall vest in a Board which may exercise all powers and do all acts and things which may be exercised or done by the Board.

(3) Unless otherwise determined by the Board, or unless the context otherwise requires, the Chairman shall also have powers of general superintendence, direction and management of the affairs of the Board and may also exercise all powers and do all acts and things which may be exercised or done by the Board.

(4) The Chairman and the Board members referred to in clauses (a) and (d) of sub-section (1) shall be appointed by the Central Government and the Board members referred to in clauses (b) and (c) of that sub-section shall be nominated by the Central Government and the Reserve Bank of India respectively.

(5) The Chairman and the other board members referred to in clause (a) and (d) of sub-section (1) shall be from amongst persons of ability, independence, integrity and standing who have shown capacity in dealing with problems relating to securities market or have special knowledge or experience of law, finance, economics, accountancy, administration or in any other discipline which, in the opinion of the Central Government, shall be useful to the Board.

Term of office and Conditions of Service of Chairman and Board Members

5. (1) The term of office and other conditions of service of the Chairman and the Board members referred to in clause (d) of sub-section (1) of section 4, shall be such as may be prescribed.

(2) Notwithstanding anything contained in sub-section (1), the Central Government shall have the right to terminate the services of the Chairman or a Board member appointed under clause (d) of sub-section (1) of section 4, at any time before the expiry of the period, prescribed under sub-section (1), by giving him a notice of not less than three months in writing or three months salary and allowances in lieu thereof, and the Chairman or a Board member, as the case may be, shall also have the right to relinquish his office, at any time before the expiry of the period, prescribed under sub-section (1), by giving to the Central Government notice of not less than three months in writing.

 Removal of Board Member from office 6. The Central Government shall remove a Board member from office if he-

(a) is, or at any time has been, adjudicated as insolvent;

(b) is of unsound mind and stands so declared by a competent court;

(c) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude;

(d) has, in the opinion of the Central Government, so abused his position as to render his continuation in office detrimental to public interest;

 Provided that no Board member shall be removed under this clause, unless he has been given a reasonable opportunity of being heard in the matter. Meetings 7. (1) The Board shall meet at such times and places, and shall observe such rules of procedure in regard to the transaction of business at its meetings (including quorum at such meetings), as may be prescribed by regulations.

(2) The Chairman or, if for any reason, he is unable to attend a meeting of the Board, any other Board member chosen by the Board members present from amongst themselves at the meeting, shall preside at the meeting.

(3) All questions which come up before any meeting of the Board shall be decided by a majority vote of the Board members present and voting, and in the event of an equality of votes, the Chairman, or in his absence, the person presiding, shall have a second or casting vote.

 Board member not to participate in meetings in certain cases 8. Any Board member, who is a director of a company and who as such director has any direct or indirect pecuniary interest in any matter coming up for consideration at a meeting of the Board, shall, as soon as possible, after relevant circumstances have come to his knowledge, disclose the nature of his interest at such meeting, and such disclosure shall be recorded in the proceedings of the Board, and the Board member shall not take any part in any deliberation or decision of the Board with respect to the matter. Vacancies, etc, not to invalidate proceedings of Board 9. No act or proceeding of the Board shall be invalid merely by reason of - (a) any vacancy in, or any defect in the constitution of, the Board; or

(b) any defect in the appointment of a person as a Board member; or

(c) any irregularity in the procedure of the Board not affecting the merits of the case.

 Officers and employees of the Board 10. (1) The Board may appoint such other officers and employees as it considers necessary for the efficient discharge of its functions under this Act.

(2) The terms, designations and other conditions of service of officers and employees of the Board appointed under sub-section (1) shall be such, as may be prescribed by regulations.

 

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