Section 6 of The Securities and Exchange Board of India Act, 1992
1*** The Central Government shall remove a member from
office if he—
- (a)is, or at any time has been, adjudicated as insolvent;
- (b)is of unsound mind and stands so declared by a competent court;
- (c)has been convicted of an offence which, in the opinion of the Central Government, involves a
moral turpitude; 2* (e) has, in the opinion of the Central Government, so abused his position as to render his
continuation in office detrimental to the public interest:
Provided that no member shall be removed under this clause unless he has been given a reasonable opportunity of being heard in the matter.
Summary
- The Central Government has the power to remove a member from their office.
- A member can be removed if they are declared insolvent, are found to be of unsound mind by a court, or are convicted of a crime involving moral turpitude.
- A member can also be removed if the Central Government believes they have abused their position, making their continued service harmful to the public interest.
- Before a member is removed for abusing their position, they must be given a fair chance to be heard in the matter.
Practical examples
FAQ
1. Who has the authority to fire a member of the Board?
The Central Government holds the power to remove a member.
2. Can a member be removed simply for making a bad business decision?
No, removal must be for specific reasons like insolvency, unsound mind, criminal conviction involving moral turpitude, or abusing their position against public interest.
3. Does a member get a chance to defend themselves before being removed?
Yes, but only if they are being removed for abusing their position. In that case, they must be given a reasonable opportunity to be heard.
Test yourself
Q1.Under Section 6 of The Securities and Exchange Board of India Act, 1992, which authority has the power to remove a member from office?
Q2.Under Section 6 of The Securities and Exchange Board of India Act, 1992, what must happen before a member is removed for abusing their position?
Q3.Under Section 6 of The Securities and Exchange Board of India Act, 1992, which of the following is a valid ground for removing a member?
Q4.Under Section 6 of The Securities and Exchange Board of India Act, 1992, who determines if a member's conviction involves a moral turpitude?