The Securities Contracts (Regulation) Act, 1956

Act No. 42

4-Sep-1956

Section 1 — Short title, extent and commencement

1. Short title, extent and commencement .

(1)This Act may be called the Securities Contracts (Regulation) Act, 1956.

(2)It extents to the whole of India.

(3)It shall come into force on such date2 as the Central Government may, by notification in the Official Gazette, appoint.

Section 2 — Definitions

2. Definitions .-In this Act, unless the context otherwise requires, -

(a)“Contract ”means a contract for or relating to the purchase or sale of securities; 3[(aa) “corporatisation ” means the succession of a recognised stock exchange, being a body of individuals or a society registered under the Societies Registration Act, 1860 (21 of 1860), by another stock exchange, being a company incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carri ed on by such individuals or society; (ab) “demutualisation ” means the segregation of ownership and management from the trading rights of the members of a recognised stock exchange in accordance with a scheme approved by the Securities and Exchange Board o f India;] 4[5[(ac)] “derivative ” includes -

(A)a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security;

(B)a contact which derives its value from the prices, or index of prices, of underlying securities ;] 6[(C) commodity derivatives; and

(D)such other instruments as may be declared by the Central Government to be derivatives;]

(b)“Government security ” means a security created and issued, whether before or after the commencement of this Act, by the Central Government or a State Government for the purpose of raising a public loan and having one of the forms specified in clause ( 2) of section 2 of the Pub lic Debt Act, 1944 (13 of 1944); 6[(bb) “goods” mean every kind of movable property other than actionable claims, money and securities; (bc) “commodity derivative” means a contract -

(i)for the delivery of such goods, as may be notified by the Central Gove rnment in the Official Gazette, and which is not a ready delivery contract; or

Section 2 — 20th February, 1957, vide notification No. S.R.O. 528, dated 16th February, 1957, see Gazette of India, Extraordinary, Part II,

2. 20th February, 1957, vide notification No. S.R.O. 528, dated 16th February, 1957, see Gazette of India, Extraordinary, Part II,

Section 3 — this Act has been extended in its application to the Union territory Goa, Dam an and Diu by the Act 11 of 1963, s. 3 and

sec. 3 this Act has been extended in its application to the Union territory Goa, Dam an and Diu by the Act 11 of 1963, s. 3 and the Schedule (w .e.f 1 -2-1965).

Section 5 — Clause ( aa) re-lettered as clause ( ac) thereof by Act 1 of 2005, s. 2 (w.e.f. 12 -10-2004).

5. Clause ( aa) re-lettered as clause ( ac) thereof by Act 1 of 2005, s. 2 (w.e.f. 12 -10-2004).