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Supreme Court holds SEBI has the power to regulate winding up of mutual fund schemes

In Franklin Templeton Trustee Services Private Limited v Amruta Garg, the Supreme Court has held that SEBI has the power to regulate the winding up of mutual fund schemes. In case of violations and incorrect decisions made by trustees in connection with winding up schemes, SEBI can intervene, and prevent the trustees or any other intermediary from behaving detrimentally to the interests of investors. These powers arise from Section 11 of the SEBI Act. SEBI can take measures under this section by an order in writing. The regulator can issue directions and levy penalties under Section 11B.

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