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Section12
The Securities and Exchange Board of India Act, 1992

Registration of stock-brokers, sub-brokers, share transfer agents, etc

In force From 30 Jan 1992 Act 15 of 1992 As on 15 Oct 2026

Act 15 of 1992 Ministry Finance Enacted 04 Apr 1992 In force 30 Jan 1992 Cited by 24 provisions Instruments 27

Section 12 of the Securities and Exchange Board of India Act, 1992 deals with registration of stock-brokers, sub-brokers, share transfer agents, etc. No stock-broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market shall buy, sell or deal in securities exce The Act came into force on 30 Jan 1992.

(1) No stock-broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market shall buy, sell or deal in securities except under, and in accordance with, the conditions of a certificate of registration obtained from the Board in accordance with the 1[regulations] made under this Act:

Provided that a person buying or selling securities or otherwise dealing with the securities market as a stock-broker, sub-broker, share transfer agent, banker to an issue, trustee of trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediary who may be associated with securities market immediately before the establishment of the Board for which no registration certificate was necessary prior to such establishment, may continue to do so for a period of three months from such establishment or, if he has made an application for such registration within the said period of three months, till the disposal of such application:

2[Provided further that any certificate of registration, obtained immediately before the commencement of the Securities Laws (Amendment) Act, 1995 (9 of 1995), shall be deemed to have been obtained from the Board in accordance with the regulations providing for such registration.]

2[(1A) No 3[depository, participant, custodian] of securities, foreign institutional investor, credit rating agency or any other intermediary associated with the securities market as the Board may by notification in this behalf specify, shall buy or sell or deal in securities except under and in accordance with the conditions of a certificate of registration obtained from the Board in accordance with the regulations made under this Act:

Provided that a person buying or selling securities or otherwise dealing with the securities market as a 3[depository, participant, custodian] of securities, foreign institutional investor or credit rating agency immediately before the commencement of the Securities Laws (Amendment) Act, 1995 (9 of 1995), for which no certificate of registration was required prior to such commencement, may continue to buy or sell securities or otherwise deal with the securities market until such time regulations are made under clause (d) of sub-section (2) of section 30.

(1B) No person shall sponsor or cause to be sponsored or carry on or cause to be carried on any venture capital funds or collective investment scheme including mutual funds, unless he obtains a certificate of registration from the Board in accordance with the regulations:

Provided that any person sponsoring or causing to be sponsored, carrying or causing to be carried on any venture capital funds or collective investment scheme operating in the securities market immediately before the commencement of the Securities Laws (Amendment) Act, 1995 (9 of 1995) for which no certificate of registration was required prior to such commencement, may continue to operate till such time regulations are made under clause (d) of sub-section (2) of section 30.]

4[(IC) No person shall sponsor or cause to be sponsored or carry on or cause to be carried on the activity of an alternative investment fund or a business trust as defined in clause (13A) of section 2 of the Income-tax Act, 1961 (43 of 1961), unless a certificate or registration is granted by the Board in accordance with the regulations made under this Act.]

5[Explanation.---For the removal of doubts, it is hereby declared that, for the purposes of this section, a collective investment scheme or mutual fund shall not include any unit linked insurance policy or scrips or any such instrument or unit, by whatever name called, which provides a component of investment besides the component of insurance issued by an insurer.]

(2) Every application for registration shall be in such manner and on payment of such fees as may be determined by regulations.

(3) The Board may, by order, suspend or cancel a certificate of registration in such manner as may be determined by regulations:

Provided that no order under this sub-section shall be made unless the person concerned has been given a reasonable opportunity of being heard.]

Section 12, The Securities and Exchange Board of India Act, 1992 (Act 15 of 1992).

Cross-references

Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.

This section refers to

  1. Income-tax Act s. 2 Definitions
  2. s. 30 Power to make regulations

Referred to by 24

  1. Companies Act s. 186 Loan and investment by company
  2. Depositories Act s. 2 Definitions
  3. Depositories Act s. 19B Penalty for failure to enter into an agreement
  4. Depositories Act s. 19C Penalty for failure to redress investors‟ grievances
  5. Depositories Act s. 19D Penalty for delay in dematerialisation or issue of certificate of securities
  6. Depositories Act s. 19E Penalty for failure to reconcile records
  7. Finance Act s. 14 Amendment of section 43
  8. Income-tax Act s. 43 Definitions of certain terms relevant to income from profits and gains of business or profession
  9. Income-tax Act s. 66 Interpretation
  10. Income-tax Rules s. 2D Guidelines for approval under clause (23F) of section 10
  11. Income-tax Rules s. 2DA Guidelines for approval under clause (23FA) of section 10
  12. Income-tax Rules s. 8B Guidelines for notification of zero coupon bond

and 12 more

Related judgements & precedents

These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.

  1. Sunita Bhagat vs Sebi

    Supreme Court of India 15 Jul 2016 Binding (Supreme Court) Reportable (2016) 7 SCC 317

    Court's Decision & Legal Precedent

    Section 12(1B) of the SEBI Act creates two classes of persons: (i) those who commenced collective investment activities prior to 25.1.1995 ('proviso category') who may continue until obtaining registration under the regulations; and (ii) those who did not ('non-proviso category') who are absolutely barred from commencing such activities until obtaining registration. The bar for the non-proviso category is self-executing and operative from 25.1.1995 regardless of when regulations are framed. However, criminal prosecution for regulatory non-compliance (such as failure to apply for registration under Regulation 5) requires that the accused was a director/officer of the company at the time the specific breach occurred. A director who resigned before the deadline for compliance cannot be prosecuted for breaches arising on or after the resignation date. The complaint must clearly disclose whether the accused is charged as a non-proviso category violator (commencing activity without authority) or merely as an existing operator who failed to comply with procedural regulations. Absence of such clarity, combined with the accused having exited before the breach date, renders prosecution unsustainable.

    On this section: Core statutory provision prohibiting sponsoring or carrying on of collective investment schemes without certificate of registration. Court interpreted this to create two classes of persons: existing operators (before 25.1.1995) and new operators (after 25.1.1995), with different compliance obligations. The bar for new operators was held to be absolute and mandatory from 25.1.1995, independent of when regulations were framed.

    Read the full order on eCourts India

The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.

Judgments citing this section

These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.

  1. Supreme Court of India 26 Sep 2018 SCIN010146172015

    … 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution, for issue of a credit or debit card. - Opening of a demat account with a depository, participant, custodian of securities or any other person registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992). - Payment to a hotel or restaurant against a bill or bills at any one time. - Payment in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time. - Payment to a Mutual Fund for purchase of …

    Read this order on eCourtsIndia

  2. Supreme Court of India 26 Sep 2018 SCIN010089692014

    … 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution, for issue of a credit or debit card. - Opening of a demat account with a depository, participant, custodian of securities or any other person registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992). - Payment to a hotel or restaurant against a bill or bills at any one time. - Payment in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time. - Payment to a Mutual Fund for purchase of …

    Read this order on eCourtsIndia

  3. Supreme Court of India 26 Sep 2018 SCIN010266842017

    … 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution, for issue of a credit or debit card. - Opening of a demat account with a depository, participant, custodian of securities or any other person registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992). - Payment to a hotel or restaurant against a bill or bills at any one time. - Payment in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time. - Payment to a Mutual Fund for purchase of …

    Read this order on eCourtsIndia

Made under this section, and citing it

7 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.

Another 20 instruments name this provision in its title or its text without being made under it.

All subordinate legislation

Questions about Section 12

What have the courts held on Section 12 of the Securities and Exchange Board of India Act?

Sunita Bhagat vs Sebi (15 Jul 2016) is the leading judgment on this section among those set out below: Core statutory provision prohibiting sponsoring or carrying on of collective investment schemes without certificate of registration. Court interpreted this to create two classes of persons: existing operators (before 25.1.1995) and new operators (after 25.1.1995), with different compliance obligations. The bar for new operators was held to be absolute and mandatory from 25.1.1995, independent of when regulations were framed.

How do I find court cases under Section 12 of the Securities and Exchange Board of India Act?

In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Sebi Act 12, section 12 Sebi Act, section 12 of the Securities and Exchange Board of India Act. People searching for it also type section 12 of the securities and exchange board of india act 1992 and section 12a of the securities and exchange board of india act 1992. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Sunita Bhagat vs Sebi (15 Jul 2016).

What should I read with Section 12 of the Securities and Exchange Board of India Act, and has it changed?

Its own text turns on Income-tax Act 2 (Definitions), section 30 (Power to make regulations), so none of them can safely be read on its own. 24 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 7: most recently the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 last amended on May 10, 2019. (2019), then the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 (2019), and 5 more.

When did Section 12 of the Securities and Exchange Board of India Act come into force?

Section 12 of the Securities and Exchange Board of India Act, cited as Sebi Act 12, came into force on 30 Jan 1992, having been enacted on 04 Apr 1992. It is in force as at the date shown on this page.

Other sections of this Act

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.