Summary. A show-cause notice is the start of a formal process, not its end. The reply is your main chance to put facts and law on record. Time limits are short, so act in the first week.
1. What the notice is
A show-cause notice sets out the allegations, the provisions said to be violated and the action proposed. It usually follows an inspection, an investigation or a complaint. It gives you a fixed time to reply and often an opportunity of a personal hearing.
2. First week
Record the date of receipt and the reply date. Identify who must be informed internally, such as the board or the audit committee. Preserve all emails, trading records and filings, and do not alter or delete anything. Ask for the documents the notice relies on, and for the inspection or investigation report if it is not annexed.
3. Build the reply
Answer each allegation in the order the notice raises it. For each point give the facts, the document that proves it and the legal position. Raise preliminary objections early: jurisdiction, limitation, the notice being vague, reliance on unshared material, and any breach of natural justice. Keep the tone factual. Avoid arguing the case in the cover letter.
4. Evidence
Attach exhibits in an index. Include an affidavit when facts are in your personal knowledge. If expert analysis, such as trading pattern or valuation, helps, commission it early.
5. The personal hearing
Ask for it in the reply. Prepare a short note of oral points, decide who will speak and keep the written submissions ready. After the hearing, file written submissions within the time allowed.
6. After the order
Read the findings and the directions. Check the appeal period and any deposit condition before the Securities Appellate Tribunal. If the notice is still pending, consider whether settlement is available and suits your position.
7. Mistakes we see
Replying late; admitting more than the facts require; ignoring the preliminary objections; filing documents that contradict earlier filings; and leaving out the regulation-by-regulation reasoning.
What to do now
- Note the dates
- Ask for documents
- Preserve records
- Brief counsel
- Draft the point-wise reply
- Request a hearing
- Calendar the appeal period
Questions
Can I ask for more time? You can apply, giving reasons, and it is considered.
Should the company and the director reply separately? Often yes, since interests can differ.
Is a settlement possible at this stage? Possibly, see the settlement page.
Received a notice? Send it to us today.
Related: SEBI Litigation hub · Show-cause notice · SAT appeal · Settlement and consent