The Securities and Exchange Board of India vide its notification dated 19th October 2020 has published the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) (Second Amendment) Regulations, 2020 in which an explanation to regulation 4 has been instered.
Regulation 4 deals with the Prohibition of manipulative, fraudulent and unfair trade practices in which no person shall indulge in a fraudulent or an unfair trade practice in securities.
Through this amendment an explanation for the above regulation has been inserted which states as:
“Any act of diversion, misutilisation or siphoning off of assets or earnings of a company whose securities are listed or any concealment of such act or any device, scheme or artifice to manipulate the books of accounts or financial statement of such a company that would directly or indirectly manipulate the price of securities of that company shall be and shall always be deemed to have been considered as manipulative, fraudulent and an unfair trade practice in the securities market”.
