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Section 24, Section 25, Section 26 & Section 27 of Depositories Act 1996

Sections 24 to 27 under Chapter VI (Miscellaneous) of the Depositories Act 1996 ⦂‒

Section 24. Power of Central Government to make rules.—

(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:—
 (a) the manner of inquiry under sub-section (1) of section 19H;
 (aa) the time within which an appeal may be preferred under sub-section (1) of section 23;
 (b) the form in which an appeal may be preferred under sub-section (3) of section 23 and the fees payable in respect of such appeal;
 (c) the procedure for disposing of an appeal under sub-section (4) of section 23;
 (d) the form in which an appeal may be filed before the Securities Appellate Tribunal under section 23A and the fees payable in respect of such appeal.


Section 25. Power of Board to make regulations.—

(1) Without prejudice to the provisions contained in section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board may, by notification in the Official Gazette, make regulations consistent with the provisions of this Act and the rules made thereunder to carry out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for—
(a) the form in which record is to be maintained under clause (i) of sub-section (1) of section 2;
(b) the form in which the certificate of commencement of business shall be issued under sub-section (2) of section 3;
(c) the manner in which the certificate of security shall be surrendered under sub-section (1) of section 6;
(d) the manner of creating a pledge or hypothecation in respect of security owned by a beneficial owner under sub-section (1) of section 12;
(e) the conditions and the fees payable with respect to the issue of certificate of securities under sub-section (3) of section 14;
(f) the rights and obligations of the depositories, participants and the issuers under sub-section (1) of section 17;
(g) the eligibility criteria for admission of securities into the depository under sub-section (2) of section 17;
(h) the terms determined by the Board for settlement of proceedings under sub-section (2) of section 19-IA;
(i) any other matter which is required to be, or may be, specified by regulations or in respect of which provision to be made by regulations.


Section 26. Power of depositories to make bye-laws.—

(1) A depository shall, with the previous approval of the Board, make bye-laws consistent with the provisions of this Act and the regulations.

(2) In particular, and without prejudice to the generality of the foregoing power, such bye-laws shall provide for—
(a) the eligibility criteria for admission and removal of securities in the depository;
(b) the conditions subject to which the securities shall be dealt with;
(c) the eligibility criteria for admission of any person as a participant;
(d) the manner and procedure for dematerialisation of securities;
(e) the procedure for transactions within the depository;
(f) the manner in which securities shall be dealt with or withdrawn from a depository;
(g) the procedure for ensuring safeguards to protect the interests of participants and beneficial owners;
(h) the conditions of admission into and withdrawal from a participant by a beneficial owner;
(i) the procedure for conveying information to the participants and beneficial owners on dividend declaration, shareholder meetings and other matters of interest to the beneficial owners;
(j) the manner of distribution of dividends, interest and monetary benefits received from the company among beneficial owners;
(k) the manner of creating pledge or hypothecation in respect of securities held with a depository;
(l) inter se rights and obligations among the depository, issuer, participants and beneficial owners;
(m) the manner and the periodicity of furnishing information to the Board, issuer and other persons;
(n) the procedure for resolving disputes involving depository, issuer, company or a beneficial owner;
(o) the procedure for proceeding against the participant committing breach of the regulations and provisions for suspension and expulsion of participants from the depository and cancellation of agreements entered with the depository;
(p) the internal control standards including procedure for auditing, reviewing and monitoring.

(3) Where the Board considers it expedient so to do, it may, by order in writing, direct a depository to make any bye-laws or to amend or revoke any bye-laws already made within such period as it may specify in this behalf.

(4) If the depository fails or neglects to comply with such order within the specified period, the Board may make the bye-laws or amend or revoke the bye-laws made either in the form specified in the order or with such modifications thereof as the Board thinks fit.


Section 27. Rules and regulations to be laid before Parliament.—

Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.





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Notes:

The Depositories Act 1996 was amended by the:
- Depositories Related Laws (Amendment) Act, 1997 (Act No. 08 of 1997);
- Securities Laws (Second Amendment) Act, 1999 (Act No. 32 of 1999);
- Securities Laws (Amendment) Act, 2004 (Act No. 01 of 2005);
- Securities Laws (Amendment) Act, 2014 (Act No. 27 of 2014);
- Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 (Act No. 44 of 2016);
- Finance Act, 2017 (Act No. 07 of 2017).

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