SEBI Act: Appeal to Expunge Adverse Observations, Beneficial Owners Issue Addressed

The appeal under section 15T of the SEBI Act challenged directions issued by a committee to the appellant. The appellant sought to expunge adverse observations. It was found that the appellant had revised business rules and implemented procedures to address issues related to beneficial owners. No prejudice was caused despite cancellation of registration. In the interest of the securities market, adverse observations were expunged, and the appeal was disposed of with no order as to costs.

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Issues involved: Appeal u/s 15T of SEBI Act against directions issued to the appellant by a specially constituted committee.

Summary:
The appeal was filed u/s 15T of the Securities and Exchange Board of India Act, 1992, challenging the directions issued to the appellant by a specially constituted committee. The appellant sought to expunge adverse observations made by the committee. After hearing both sides, it was noted that the appellant had revised its business rules and implemented additional procedures to address issues related to beneficial owners in case of deactivation/termination of a depositary participant. It was found that no prejudice had been caused to the beneficial owner of the depositary participant, Rajnarayan Capital Market Services Limited, despite the cancellation of its registration. In the interest of the securities market, it was directed that the adverse observations in the impugned order be expunged. Detailed reasons for expunging the observations were recorded. The appeal was disposed of with no order as to costs.

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