The Securities Contracts (Regulation) Act, 1956

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The Securities Contracts (Regulation) Act, 1956

THE SECURITIES CONTRACTS (REGULATION)

ACT, 1956 ACT NO. 42 OF 1956AN ACT TO PREVENT UNDESIRABLE TRANSACTIONS IN SECURITIES BY RE

GULATINGTHE BUSINES

[4th September, 1956.]

BE it enacted by Parliament in the Seventh Year of the Republic of India as follows:-

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 extends to the whole of India.

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

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 ;

(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 Public Debt Act, 1944;

(d)"option in securities" means a contract for the purchase or sale of a right to buy or sell, or a right to buy and sell, securities. in future, and includes a teji, mandi, a teji mandi, a galli, a put, a call or a put and call in securities ;

(e)" prescribed " means prescribed by rules made under this Act ;

[See footnote 1 for this section]

(f)" recognised stock exchange" means a stock exchange which is for the time being recognised by the Central Government under section 4;

(g)" rules ", with reference to the rules relating in general to the constitution and management of a stock exchange, includes, in the case of a stock exchange which is an incorporated association, its memorandum and articles of association ;

(h) "securities" include-

(i) shares, scrips, stocks, bonds, debentures, deben-

ture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;

(ii) Government securities;

(iia) such other instruments as may be declared by the central Government to be securities; and"]

(iii) rights or interests in securities;

(i)"spot delivery contract" means a contract which provides for the actual delivery of securities and the payment of a price therefor either on the same day as the date of the contract or on the next day, the actual period taken for the despatch of the securities or the remittance of money therefor through the post being excluded from the computation of the period aforesaid, if the parties to the contract do not reside in the same town or locality ;

(j)stock exchange " means any body of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, sel...

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