Obligations of VCFs
Every officer of the VCF, in respect of whom an inspection investigation has been ordered by SEBI and any other associate person who is in possession of relevant information pertaining to its conduct affairs, including fund manager asset management company, would be duty bound to (1) produce for the investigating inspecting offer such books; accounts and other documents as are in his custody control and furnish him with the relevant statements and information and (2) to give him all assistance and cooperation and such information as required sought by him. The inspecting investigating officer would have the power to examine on oath and record the statement of any employee directions consonants responsible for or connected with the activities of the VCF or any other associate person having relevant information. He would also have power to obtain authenticated copies of documents, books, accounts of the VCF from any person having control custody of them.
On the basis of the inspection report, call upon the VCF to take such measures as it may deem fit in the interest of the securities market and for compliance with the provisions of the SEBI Act. and these equations. It may also issue 10 the VCF trustee directors such directions as it deems fit in the interest of the securities market investors, including directions in the nature of (i) requiring the VCF not to launch any new Scheme money from investors for a particular period. (ii) prohibiting the person concerned from disposing of any of the properties of the fund scheme acquired violation of the VCF (these) regulations, (iii) requiring him to dispose of the assets of the fund scheme in a specified manner, (iv) equating him to refund any money asset to the concerned investors along with the requisite interest or otherwise collected under the scheme and (v) prohibiting him from operating in or from accessing the capital market for a specified period.
Action in Case of Default
SEBI can suspend cancel the registration of a VCF on the basis of the due procedure.