Manner of Enquiry in the Affairs of Stock Exchange :
Rule 16 lays down that any enquiry in relation to the affairs of the governing body of a recognised stock exchange or the affairs of any member in relation to the stock exchange can be conducted only by the person or persons appointed by SEBI under section 6(3)(b) of the Act. The person or persons are so appointed are refer to as the inquiring authority.
The procedure relating to the conduct of inquiry is stated below –
– where the inquiring authority consists of two or more persons, one of them shall be appointed as the chairman or senior member thereof;
– the inquiring authority shall hand over a statement of issues to be inquired into to the governing body or the member concerned, as the case may be, who will be given a reasonable opportunity to state their or his side of the case;
– if any witness is called for examination, an opportunity shall be provided to the governing body or the member whose affairs are being inquired into, as the case may be, to cross-examine such witness;
– where the inquiring authority consists of more than one person, the views of the majority shall be deemed to represent the findings of such authority and, in the event of an equality of votes, the chairman or senior member shall have a casting vote;
– the inquiring authority shall submit its report in writing to the SEBI within the period specified in the order of appointment;
– temporary absence from any hearing or hearings of any member of the inquiring authority shall not vitiate its proceedings.
Where SEBI has directed the governing body of a stock exchange to make an inquiry SEBI, the governing body concerned shall appoint one or more members thereof to make the inquiry.