Answer-An Executive Director (ED) of SEBI orders an investigation into 'Z-Plus Brokers' based on a tip-off...

Explanation The law provides a specific administrative shortcut to allow SEBI to react to market volatility. Under Regulation 5 , the ED is legally empowered to act as the Appointing Authority. Furthermore, Regulation 55 explicitly states that the IA may examine any person on oath and the notes of such examination may be used as evidence against such person. The Supreme Court in various rulings has upheld that regulatory investigations are valid as long as they follow the internal delegation of power like Reg 5 and the IA follows the procedure laid down in the SEBI ActRegulations.

Question

An Executive Director (E

A conducts a search and seizure. During the proceedings, the IA records the statement of a Director of "Z-Plus Brokers" under oath. The Director later argues that the statement is inadmissible because the ED did not obtain "Prior Board Approval" in a formal meeting before directing the IA. Is the Director’s contention valid?
D of SEBI orders an investigation into "Z-Plus Brokers" based on a tip-off about 'Wash Trades.' The Investigating Authority (I

A Yes, because Section 11C of the SEBI Act requires the "Board" to form an opinion, and an individual ED cannot substitute their judgment for the collective Board.

B Yes, but only if the search and seizure was conducted without a warrant from a Magistrate under the Bharatiya Nagarik Suraksha Sanhita (BNSS).

C No, because SEBI investigations are "Administrative" and not "Quasi-Judicial," therefore the rules of evidence and natural justice do not apply until the adjudication stage.

D No, because Regulation 5 specifically designates the ED as an "Appointing Authority," and statements recorded by the IA are deemed to be evidence under Regulation 5(5).

E Yes, because the IA must be a "Division Chief" or above, and if the ED appointed a junior officer, the entire investigation is coram non judice.

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An Executive Director (E

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