Securities Lending Scheme, 1997

 
FREE EXCERPT

1. Preliminary

(1) This scheme shall be called the Securities Lending Scheme, 1997

2. Applicability

(1) It shall come into force on 6th February 1997.

3. Definitions

1 In this scheme, unless the context otherwise requires: -

  1. "approved intermediary" means a person duly registered by the Board under the guidelines/scheme through whom the lender will deposit the securities for lending and the borrower will borrow the securities;

  2. "Board" means the Securities and Exchange Board of India (SEBI) established under Section 3 of the Securities and Exchange Board of India Act, 1992;

  3. "borrower" means a person who borrows the securities under the scheme through an approved intermediary;

  4. "corporate benefits" shall include dividends (gross), rights, bonus, redemption benefits, interest, or any other right or benefit accruing on the securities lent;

  5. "lender" means a person who deposits the securities registered in his name or in the name of any other person duly authorized on his behalf with an approved intermediary for the purpose of lending under the scheme;

  6. "securities" has the meaning assigned to it in Section 2 of the Securities Contracts (Regulation) Act, 1956;

  7. "scheme" means Securities Lending Scheme, 1997 for lending of securities through an approved intermediary to a borrower under an agreement for a specified period with the condition that the borrower will return equivalent securities of the same type or class at the end of the specified period along with the corporate benefits accruing on the securities borrowed.

    2 Words and expression used and not defined for the purpose of this Scheme but defined in the Securities Contracts (regulation) Act, 1956 or SEBI Act shall have the meanings respectively assigned to them in that Act or rule and regulations made thereunder.

    4. Scheme

    1. The lender shall enter into an agreement with the approved intermediary for depositing the securities for the purpose of lending through approved intermediary as per the scheme and the borrower shall enter into an agreement with the approved intermediary for the purpose of borrowing of securities and as such there shall be no direct agreement between the lender and the borrower for the lending or borrowing of securities.

    2. The agreement between the lender and the approved intermediary shall provide that when the lender has deposited the securities with the approved intermediary under the scheme, the beneficial interest shall continue to remain with the lender and all the corporate benefits shall accrue to the lender.

    3. The lender shall be entitled to deposit only those securities registered in his name or in the name of any other person duly...

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