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Action against intermediaries
75. The Board may initiate action for suspension or cancellation of registration of an
intermediary holding a certificate of registration under section 12 of the Act who fails to
exercise due diligence or to comply with the obligations under these regulations:
Provided that no such certificate of registration shall be suspended or cancelled unless
the procedure specified in regulations applicable to such intermediary is complied with.
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[Action against mutual fund and/or asset management company
(6) The enquiry officer may if he considers it necessary, ask the Board to appoint a presenting officer to
present its case.
(7) The enquiry officer shall, after taking into account all relevant facts and submissions made by the
mutual fund, trustees or asset management company submit a report to the Board and recommend the
action, if any, to be taken against the mutual fund, trustees or asset management company as also the
grounds on which the penal action is justified.
72. Show cause notice and order (1) On receipt of the report from the enquiry officer, the Board shall
consider the same and issue to the mutual fund, trustees or asset management company, a show-cause
notice.
(2) The mutual fund, asset management company or trustee, shall within fourteen days of the date of the
receipt of the show-cause notice, send a reply to the Board.
(3) The Board, after considering the reply of the mutual fund, trustees or asset management company, if
any, shall as soon as possible pass such order as it deems fit.
(4) The Board shall send to the mutual fund, trustees, or asset management company, a copy of the order
made under sub-regulation (3).
73.Effect of suspension or cancellation of certificate of registration
(1) On and from the date of the suspension of the certificate or the approval, as the case may be, the mutual
fund, trustees or asset management company, shall cease to carry on any activity as a mutual fund, trustee
or asset management company, during the period of suspension, and shall be subject to the directions of the
Board with regard to any records, documents, or securities that may be in its custody or control, relating to
its activities as mutual fund, trustees or asset management company.
(2) On and from the date of cancellation of the certificate or the approval, as the case may be, the mutual
fund, trustees or asset management company shall with immediate effect, cease to carry on any activity as
mutual fund, trustees or asset management company, as the case may be.
(3) The Board may in the interest of the unit holders issue directions with regard to the transfer of any
records, documents or securities that may be in its custody or control, relating to its activities as mutual
fund, trustees or asset management company.
(4) The Board may in order to protect the interest of the unit holders order the transfer of records,
document, securities, etc. to any person specifically appointed for the purpose or to any other trustee or
asset management company.
Provided that the Board shall while appointing such a person determine the terms and conditions of such an
appointment.
74. Publication of order of suspension or cancellation.
The order of suspension or cancellation passed under sub-regulation (3) of regulation 72, may be published
by the Board in two newspaper.‖
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Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2012, w.e.f. 21-2-2012.