Section 18 of The Depositories Act, 1996 — Power of Board to call for information and enquiry
Bare section text
Official Legislative Text
- (1)The Board, on being satisfied that it is necessary in the public interest or in the interest of investors so to do, may, by order in writing,--
- (a)call upon any issuer, depository, participant or beneficial owner to furnish in writing such information relating to the securities held in a depository as it may require; or
- (b)authorise any person to make an enquiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant, who shall submit a report of such enquiry or inspection to it within such period as may be specified in the order.
- (2)Every director, manager, partner, secretary, officer or employee of the depository or issuer or the participant or beneficial owner shall on demand produce before the person making the enquiry or inspection all information or such records and other documents in his custody having a bearing on the subject matter of such enquiry or inspection.
Educational Study Layer
Summary
- The Board has the power to ask for written information about any securities held in a depository.
- This information can be requested from the company issuing shares or the depository itself.
- The Board can also authorize someone to inspect the records of a participant or beneficial owner.
- This power is used when it is in the public interest or helps protect investors.
- All employees and officers of these companies must hand over the requested documents.
- The person making the inquiry must submit a report to the Board.
Practical examples
FAQ
1. Can the Board inspect a participant's records under Section 18 of the Depositories Act 1996?
Yes, Section 18 of the Depositories Act 1996 allows the Board to authorize an inquiry or inspection of a participant's affairs.
2. Who must provide information to the Board under Section 18 of the Depositories Act 1996?
Issuers, depositories, participants, and beneficial owners are all required to provide information when requested under Section 18 of the Depositories Act 1996.
3. What happens if an employee refuses to show records during an inspection under Section 18?
Under Section 18 of the Depositories Act 1996, every employee must produce all information or records in their custody on demand.
Practice Quiz
Q1.Under Section 18 of the Depositories Act, 1996, for what reason can the Board call for information?
Q2.Under Section 18 of the Depositories Act, 1996, who can provide a report after an inquiry?
Q3.Under Section 18 of the Depositories Act, 1996, what must employees of an issuer do during an inspection?
Q4.Can the Board demand info from a beneficial owner under Section 18 of the Depositories Act, 1996?