Suspension of Registration
The certificate of registration granted to a VCF can be suspended by SEBI, in addition to issuing of directions measures specified above, in the following circumstances:
(a) Contravention of any of the provisions of the SEBI Act or these regulations;
(b) Failure to furnish any information relating to its activity as a VCF as required by SEBI;
(c) Furnishing to SEBI information which is false misleading in any material particular:
(d) Non submission of periodic returns reports as required by SEBI.
(e) Non cooperation in any equity inspection investigation conducted by SEBI;
(f) Failure to resolve the complaints of investors to give a satisfactory reply to SEBI in this behalf.
Cancellation of Registration
The registration of a VCF can be cancelled by SEBI when it:
– is guilty of fraud or is convicted of an offence involving moral turpitude;
– has been guilty of repeated defaults which may result in suspension of the registration;
– contravenes any of the provisions of the SEBI. Act or these regulations.
The order of suspension cancellation of certificate of registration would be published by SEBI in two newspapers. On the date of suspension cancellation, the VCF would cease to carry on any activity as a VCF and would be subject to directions from concerning SEBI the transfer of records, documents securities that may be in its custody control as it may specify.
Action Against Intermediaries
SEBI may initiate action for suspension cancellation of registration of an intermediary (registered with it) who fails to exercise due diligence in the performance of its functions or fails to comply with its obligations under these regulations.
Any person aggrieved by an order of SEBI under these regulations may prefer an appeal to the Securities Appellate Tribunal (SAT).