2025 (9) TMI 1001

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.... Per: Justice P.S. Dinesh Kumar, Presiding Officer Bombay Stock Exchange (BSE Limited) has knocked the doors of this Tribunal challenging order dated July 29, 2022 passed by the AO (Adjudicating Officer), SEBI (Securities and Exchange Board of India) imposing a penalty of Rs. 3 Lakhs for violation of Section 38(2) of the SECC Regulations (Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012), 2018 read with Regulation 41(3) of SECC Regulation, 2012, holding that BSE Ltd., had engaged in unrelated activities without the prior approval of SEBI. 2. We have heard Mr. Pesi Modi, learned Senior Advocate for the appellant and Mr. Gaurav Joshi, learned Senior Advocate for the SEBI. 3. Brief facts ....

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....es unrelated/non- incidental to its activity as a stock exchange through BIL RFPL without seeking SEBI‟s approval; • IWIPL (Indus Water Institute Pvt. Ltd.) is a company which provides support to entrepreneurs in water and clean technologies. In 2019, BIL, a subsidiary of the appellant, acquired an 8% stake in IWIPL for Rs. 8,000/-. Thus, BSE indirectly carried out activities unrelated/non- incidental to its activity as a stock exchange, through IWIPL without seeking SEBI‟s approval. 4. Appellant submitted its reply stating inter alia: •   • that Regulation 38(2) of 2018 Regulations and Regulation 41(3) of 2012 Regulations were never intended to regulate the business of subsidiaries....

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....000 and the Company is controlled by Ryerson Futures Inc., a subsidiary of Ryerson University Canada. In Indus Water Institute Pvt. Ltd., BIL has invested Rs. 8000. Indus Water Institute Pvt. Ltd. provides support to entrepreneurs in water and clean technologies. 9. Shri Modi, in substance, argued contended that the investments in the three entities are made by appellant‟s subsidiaries, namely, BTPIL and BIL. BSE‟s investment in both BTPIL and BIL were prior to 2012 Regulations. Both Regulations restrict a recognized Stock Exchange from engaging in unrelated activities without SEBI‟s permission. In the instant case, appellant which is a Stock Exchange has not engaged itself in any unrelated activity. Any violation of SE....

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....y activity whether involving deployment of funds or otherwise without prior approval of the Board: Provided that prior approval shall not be required in case of treasury investments if such investments are as per the investment policy approved by the governing board of recognized stock exchange or recognized clearing corporation; Provided further, that the recognized stock exchange and recognized clearing corporation may engage in activities whether involving deployment of funds or otherwise that are unrelated or not incidental to its activity as a stock exchange or clearing corporation, as the case may be, except through a separate legal entity and subject to approval of the Board." (emphasis supplied) 13. At the ou....