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Microlesson · 5-min read

SEBI's Power to Regulate Issue and Transfer of Securities (Sec 24)

# Section 24 — SEBI's Regulatory Powers

## Core Provision

SEBI is empowered to administer those provisions under Chapter III and Chapter IV of the Companies Act, 2013 that pertain to:

1. Issue and transfer of securities; and

2. Non-payment of dividend.

## To Whom Does It Apply?

SEBI's powers under Sec 24 apply to:

  • Listed companies; AND
  • Companies that intend to get their securities listed on any recognized stock exchange in India.

## Why This Matters

Section 24 creates a dual regulatory architecture:

  • For listed (or to-be-listed) entities → SEBI is the administrator.
  • For unlisted companies → MCA / Registrar of Companies handles administration.

This allows SEBI to enforce investor protection norms (LODR Regulations, ICDR Regulations) on entities accessing public capital markets.

## Practical Takeaway

When a company files a prospectus or undertakes a transfer involving listed securities, compliance is checked under both Companies Act AND SEBI regulations — but SEBI has primary administrative jurisdiction.

Worked example

### Example 1

Example: A listed company delays payment of declared dividend by more than 30 days. Who is the primary regulator empowered to take action?

Answer: SEBI is empowered under Sec 24 since non-payment of dividend by a listed company falls within its administrative scope.

⚠️ Common exam mistakes

  • Assuming SEBI's Sec 24 powers extend to all companies — they apply only to listed or to-be-listed companies.
  • Forgetting that 'non-payment of dividend' (Sec 127) also falls under SEBI's purview for listed entities.
Bare-Act text Section 24 · Companies Act, 2013 · click to expand
Section 24: The provisions contained in this Chapter, Chapter IV and in section 127 shall, in so far as they relate to (a) issue and transfer of securities; and (b) non-payment of dividend, by listed companies or those companies which intend to get their securities listed on any recognised stock exchange in India, be administered by the Securities and Exchange Board.
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