# Power of SEBI to Regulate Issue and Transfer of Securities (Section 24)

## SEBI's Jurisdiction Under Chapters III and IV

SEBI is empowered to administer provisions of Chapters III and IV of the Companies Act, 2013 with respect to:

1. Issue and Transfer of Securities

2. Non-payment of Dividend

## Scope — Which Companies?

SEBI's powers under Section 24 apply to:

Listed companies, AND
Companies which intend to get their securities listed on any recognized stock exchange in India

## Other Matters — Jurisdiction

All other matters (allotment, return of allotment, redemption, share capital reduction, etc.) remain with:

Central Government
Tribunal (NCLT)
Registrar of Companies (ROC)

## Dual Regulation Logic

```

LISTED / INTENDING TO LIST

↓

Issue, Transfer, Dividend non-payment → SEBI

Other matters → CG / Tribunal / ROC

UNLISTED (no intention to list)

↓

All matters → CG / Tribunal / ROC

```

## Why This Division?

SEBI is the specialized capital markets regulator — it focuses on investor protection in public markets. The Companies Act provides default corporate governance, but where market-sensitive activities are involved, SEBI takes the lead.

Worked example

### Example 1

Example 1: ABC Ltd, listed on BSE, defaults in paying declared dividend. Which authority handles the matter?

Answer: SEBI. Non-payment of dividend by a listed company falls under Section 24, hence within SEBI's jurisdiction.

### Example 2

Example 2: XYZ Pvt Ltd (unlisted with no plan to list) wants to redeem its preference shares. Which authority?

Answer: CG / Tribunal / ROC (as applicable). SEBI's jurisdiction does NOT extend to unlisted companies under Section 24.

⚠️ Common exam mistakes

Thinking SEBI handles ALL matters of listed companies — its Section 24 jurisdiction is limited to issue/transfer/dividend non-payment.
Forgetting that companies 'intending to list' also fall under SEBI's purview, not just already-listed ones.
Confusing SEBI's listing regulation powers with company-law jurisdictions of CG/ROC/Tribunal.

Bare-Act text Section 24 · Companies Act, 2013 · click to expand

24. (1) The provisions contained in this Chapter, Chapter IV and in section 127 shall,—(a) in so far as they relate to—(i) issue and transfer of securities; and (ii) non-payment of dividend, by listed companies or those companies which intend to get their securities listed on any recognised stock exchange in India, except as provided under this Act, be administered by the Securities and Exchange Board by making regulations in this behalf...

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