Section 24: Regulatory functions

24. Regulatory functions (1) In addition to its other functions, the SEM shall have regulatory functions and shall— (a) ensure that it adequately supervises the market operations and the conduct of market participants; (b) ensure the adequacy and efficiency of internal controls; (c) ensure that market participants follow capital adequacy rules; (d) investigate misconduct or apparent misconduct by market participants and their representatives that could seriously affect investors or other participating organisations and promptly report to the Commission on these instances of misconduct; (e) investigate possible market abuses, including insider dealing and fraudulent behaviour; (f) take disciplinary measures or agree to a settlement after a public hearing. (2) Where an investigation is carried out by the SEM, it shall, in writing, forthwith— (a) inform the Commission of the nature of such investigation and persons involved in the investigation; and (b) advise the Commission on the status of such investigation at such intervals as the Commission may request. (3) On the completion of an investigation, the SEM shall— (a) transmit to the Commission all information in its possession relating to any such investigation; and (b) inform the Commission of the outcome of such investigation and of any disciplinary measure or other course of action taken as a result of an investigation. (4) The SEM shall— (a) ensure that an adequate budget allocation is made to properly carry out the regulatory functions mentioned in subsection (1); and (b) submit in the annual report under section 20, information on the exercise of its regulatory functions. (5) In this Sub-Part— “internal controls” means the system of controls put in place to assess and ensure the effectiveness of the SEM in the exercise of its regulatory functions; “market participant” means any investment dealer or any other person which has been given direct access to trading on the exchange.