Consideration of Report

(1) The Board shall consider the inspection report received under regulation 6 or investigation report received under regulation 10, as the case may be, expeditiously.

(2) If the Board, after consideration of the report under sub-regulation (1), is of the prima facie opinion that sufficient cause exists to take actions under section 220 or sub-section (2) of section 236, it shall issue a show-cause notice in accordance with regulation 12 to the service provider or an associated person and in any other case, close the inspection or investigation, as the case may be.
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Regulation 12 Show-cause notice.

(1) The show-cause notice shall be in writing and shall state-
(a) the provisions of the Code under which it has been issued;
(b) the details of the alleged facts;
(c) the details of the evidence in support of the alleged facts;
(d) the provisions of the Code, or the rules, regulations or guidelines made thereunder, allegedly violated;
(e) the actions or directions that the Board proposes to take or issue, if the allegations are established; and
(f) the time within which the noticee may make written submission.

(2) For the purposes of clause (e) of sub-regulation (1), the Board shall take into account, but not limited to, the following factors:-
(a) the nature and seriousness of the alleged contraventions, including whether it was deliberate, reckless or negligent on the part of the noticee;
(b) the consequences and impact of the alleged contravention, including –
(i) unfair advantage gained by the noticee as a result of the alleged contravention;
(ii) loss caused, or likely to be caused, to clients or any other person as a result of the alleged contravention; and
(iii) the conduct of the noticee after the occurrence of the alleged contravention, and prior to the alleged contraventions.

(3) The show-cause notice shall provide at least 21 days to the noticee to make a written submission.

(4) The show-cause notice shall state, if a noticee fails to respond under sub-regulation (3) within the given time, it shall be disposed of based on the material available on record.

(5) The show-cause notice shall enclose copies of relevant documents and extracts of relevant portions from the report of investigation or inspection, or other records.

(6) A show-cause notice issued shall be served on the noticee-
(a) by sending it to the noticee at its registered office, by registered post with acknowledgement due; and
(b) by an appropriate electronic form to the email address provided by the service provider to the Board.

(7) The Board shall refer the show-cause notice to the Disciplinary Committee along with all the relevant records including the written submissions, if any, made by the noticee in the matter.

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Regulation 13 Disposal of Show-cause notice.

(1) The Disciplinary Committee, after providing an opportunity of being heard to the noticee, shall dispose of the show-cause notice by a reasoned order.

(2) The Disciplinary Committee shall dispose of the show-cause notice within a period of 180 days of the issue of the show-cause notice.

(3) The order under sub-regulation (1) may provide for-
(a) closure of show-cause notice without any direction;
(b) warning;
(c) any of the actions under sub-sections (2), (3) and (4) of section 220;
(d) a reference to the Board to take any action under sub-section (5) of section 220 or sub-section (2) of section 236; or
(e) any other action or direction as may be considered appropriate.

(4) The order under sub-regulation (1) shall not become effective until thirty days have elapsed from the date of issue of the order, unless the Disciplinary Committee states otherwise in the order along with the reasons for the same.

(5) The order under sub-regulation (1) shall be issued to the noticee immediately, and be published on the website of the Board.

(6) If the order under sub-regulation (1) suspends or cancels the registration of a service provider, the Disciplinary Committee may, if it considers fit, require the service provider to-
(a) discharge pending obligations, if any;
(b) continue its functions till such time as may be directed, only to enable clients to shift to another service provider; and
(c) comply with any other directions.

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