THE GAZETTE OF INDIA

EXTRA ORDINARY

PART II SECTION 3 - SUB-SECTION(ii)

PUBLISHED BY AUTHORITY

SECURITIES AND EXCHANGE BOARD OF INDIA

NOTIFICATION

MUMBAI, 29th MAY, 2001

SECURITIES AND EXCHANGE BOARD OF INDIA (INVESTMENT ADVICE BY INTERMEDIARIES) (AMENDMENT) REGULATIONS, 2001.

S.O. No. 476 (E). In exercise of the powers conferred by sub-section (1) of section 30 of the Securities and Exchange Board of India Act, 1992 ( 15 of 1992), the Securities and Exchange Board of India hereby makes the following regulations, namely –

1. These regulations shall be called the Securities and Exchange Board of India (Investment Advice by Intermediaries) (Amendment) Regulations, 2001.

  1. They shall come into force on the date of their publication in the Official Gazette.
  2. The regulations specified in column (1) of the table below shall be amended to the extent provided in the corresponding entry in column (2) of the said table.


 

Short Title of the Regulation

(1)

Extent of Amendment

(2)

Securities and Exchange Board of India, (Bankers to an Issue) Regulations, 1994

1. After regulation 16 a new regulation 16A shall be inserted as under -

"16A. Appointment of Compliance Officer - 

  1. Every banker to an issue shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances. 
  2. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him ."
  1. In Schedule III, after clause (7) ,a new clause (8) shall be inserted as under –

"(8)(a) A banker to an issue or any of his employees shall not render,directly or indirectly, any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice.

(b) In case, an employee of the banker to an issue is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice." 

Securities and Exchange Board of India, (Credit Rating Agencies) Regulations, 1999

1. After regulation 20 a new regulation 20A shall be inserted as under -

"20A. Appointment of Compliance Officer - 

  1. Every credit rating agency shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government.
  2. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him ."
  1. In THIRD SCHEDULE, after clause (11) a new clause (11A) shall be inserted as under –

"(11A) (a) A credit rating agency or any of his employees shall not render, directly or indirectly any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice. 

(b) In case, an employee of the credit rating agency is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."


 
 

Securities and Exchange Board of India, (Custodian of Securities) Regulations, 1996

1. After regulation 19 a new regulation 19A shall be inserted as under -

"19A. Appointment of Compliance Officer - 

  1. Every custodian of securities shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances. 
  2. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him ."
  1. In THIRD SCHEDULE, after clause (10) a new clause (11) shall be inserted as under –

"(11) (a) A custodian of securities or any of his employees shall not render, directly or indirectly, any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice. 

(b) In case, an employee of the custodian of securities is rendering such advice, he shall also disclose the interest of his dependent family members and employer including their long or short position in the said security, while rendering such advice."

Securities and Exchange Board of India, (Debenture Trustees) Regulations, 1993

1. After regulation 17 a new regulation 17A shall be inserted as under -

"17A. Appointment of Compliance Officer - 

(1.)Every debenture trustee shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances. 

(2.) The compliance officer shall immediately and independently report to the Board any non-compliance observed by him."

  1. In Schedule III, after clause (7) another clause (8) shall be inserted as under –

"(8) (a) A debenture trustee or any of his employees shall not render, directly or indirectly, any investment advice about any security in the publicly accessible media, whether real - time or non real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice. 

(b) In case, an employee of the debenture trustee is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."

Securities and Exchange Board of India, (Depositories and Participants) Regulations, 1996
  1. After regulation 58, regulations 58A and 58B shall be inserted as under –

"(58A) (1) A depository or a participant or any of their employees shall not render, directly or indirectly, any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice. 

(2) In case, an employee of the depository or the participant is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."

"58B. Appointment of Compliance Officer - 

(1.)A depository and a participant shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances. 

(2.) The compliance officer shall immediately and independently report to the Board any non-compliance observed by him."

Securities and Exchange Board of India, (Foreign Institutional Investors) Regulations, 1995
  1. After regulation 17 a new regulation 17 A shall be inserted as under –

"17A – Investment Advice in publicly accessible media.

  1. A Foreign Institutional Investor or any of his employees shall not render directly or indirectly any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice.

(2) In case, an employee of the Foreign Institution Investor is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."

2. After regulation 19 a new regulation 19A shall be inserted as under -

"19A. Appointment of Compliance Officer – 

(1.) Every Foreign Institutional Investor shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government." 

(2.) The compliance officer shall immediately and independently report to the Board any non-compliance observed by him."

Securities and Exchange Board of India, (Merchant Bankers) Regulations, 1992

1. After regulation 28 a new regulation 28A shall be inserted as under -

" 28A. Appointment of Compliance Officer - 

  1. Every merchant banker shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances. 
  2. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him and ensure that the observations made or deficiencies pointed out by the Board on / in the draft prospectus or the Letter of Offer as the case may be, do not recur."
  1. In Schedule III, after clause (8) ,a new clause (8A) shall be inserted as under –

"(8A) (a) A merchant banker or any of his employees shall not render, directly or indirectly, any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice.

(b) In case, an employee of the merchant banker is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."

Securities and Exchange Board of India, (Mutual Funds) Regulations, 1996
  1. The clause (d) of sub-regulation (4) of regulation 18 shall be substituted by the following -
     

 

"(d) appointed a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances." 

  1. After sub-regulation (4) a new sub-regulation (4a) shall be inserted as under 

"(4a) The compliance officer appointed under clause (d) of sub-regulation (4) shall immediately and independently report to the Board any non-compliance observed by him."

  1. In FIFTH SCHEDULE after clause (10), a new clause (11) shall be inserted as under –

"(11) (a) The sponsor of the mutual fund, the trustees or the asset management company or any of their employees shall not render, directly or indirectly any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice.

(b) In case, an employee of the sponsor, the trustees or the asset management company is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."


 
 

Securities and Exchange Board of India, (Portfolio Managers) Regulations, 1993

1. After regulation 23 a new regulation 23A shall be inserted as under -

" 23A. Appointment of Compliance Officer - 

  1. Every portfolio manager shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances. 
  2. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him ."
  1. In Schedule III, after clause (10) a new clause (11) shall be inserted as under –

"(11) (a) A portfolio manager or any of his employees shall not render, directly or indirectly any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his long or short position in the said security has been made, while rendering such advice.

(b) In case, an employee of the portfolio manager is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."

Securities and Exchange Board of India, (Registrars to an Issue and Share Transfer Agents) Regulations, 1993

1. After regulation 15 a new regulation 15A shall be inserted as under -

" 15A. Appointment of Compliance Officer - 

(1.)Every registrar to an issue and share transfer agents shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances. 

(2.)The compliance officer shall immediately and independently report to the Board any non-compliance observed by him ."

2. In Schedule III, after clause (7) a new clause (8) shall be inserted as under –

"(8) (a) A registrar to issue and share transfer agent or any of his employees shall not render, directly or indirectly any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his long or short position in the said security has been made, while rendering such advice.

(b) In case, an employee of the registrar to issue and share transfer agent is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."

Securities and Exchange Board of India, (Stock Brokers and Sub-Brokers) Regulations, 1992

1. After regulation 18 a new regulation 18A shall be inserted as under -

" 18A. Appointment of Compliance Officer - 

(1.) Every stock broker shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances. 

  1. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him."
  1. In Schedule II,
  1. Under the head "CODE OF CONDUCT FOR STOCK BROKERS", after clause B (7) a new clause (7A) shall be inserted as under –

"(7A) Investment Advice in publicly accessible media – 

(a) A stock broker or any of his employees shall not render, directly or indirectly, any investment advice about any security in the publicly accessible media, whether real - time or non real-time, unless a disclosure of his interest including the interest of his dependent family members and the employer including their long or short position in the said security has been made, while rendering such advice.

(b) In case, an employee of the stock broker is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."

(ii). Under the head "CODE OF CONDUCT FOR SUB-BROKERS", after clause B (7) a new clause (7A) shall be inserted as under –

"7A – Investment Advice in publicly accessible media – 

(a) A sub-broker or any of his employees shall not render, directly and indirectly any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his interest including his long or short position in the said security has been made, while rendering such advice. 

(b) In case, an employee of the sub-broker is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."

Securities and Exchange Board of India, (Underwriters) Regulations, 1993

1. After regulation 17 a new regulation 17A shall be inserted as under -

" 17A. Appointment of Compliance Officer - 

  1. Every underwriter shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors’ grievances. 
  2. The compliance officer shall immediately and independently report to the Board any non-compliance observed by him ."

2.In Schedule III, after clause (8) a new clause (9) shall be inserted as under –

"(9) (a) An underwriter or any of his employees shall not render, directly or indirectly any investment advice about any security in the publicly accessible media, whether real – time or non real-time, unless a disclosure of his interest including his long or short position in the said security has been made, while rendering such advice.

(b) In case, an employee of the underwriter is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."

[F. No. SEBI/LE/ /01]
 
 

D.R. MEHTA

CHAIRMAN

.