SEBI (PROHIBITION OF FRAUDULENT AND UNFAIR TRADE PRACTICES RELATING TO SECURITIES MARKET) (AMENDMENT) REGULATIONS, 2012 – Amendment in regulation 4

Notification No. LAD-NRO/GN/2012-13/25/5455, dated 11-12-2012

In exercise of the powers conferred by 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, 2012.

 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, in regulation 4, in sub-regulation (2), after the clause (r), the following clause and explanation shall be inserted, namely,-

“(s) mis-selling of units of a mutual fund scheme;

Explanation.– For the purpose of this clause, “mis-selling” means sale of units of a mutual fund scheme by any person, directly or indirectly, by –

  (i)  making a false or misleading statement, or

 (ii)  concealing or omitting material facts of the scheme, or

(iii)  concealing the associated risk factors of the scheme, or

(iv)  not taking reasonable care to ensure suitability of the scheme to the buyer.”

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