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Section 2 – The Securities Contract (Regulation) Act, 1956

The Securities Contract (Regulation) Act, 1956

 

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 (18 of 1944);

 

(c) “member” means a member of a recognised stock exchange;

 

(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, a 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;

 

(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, debenture 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;

 

(iii) rights or interests in securities;

 

(i) “spot delivery contract” means a contract which provides for, –

 

(a) actual delivery of securities and the payment of a price therefore either on the same day as the date of the contract or on the next day, the actual period taken for the dispatch of the securities or the remittance of money therefore 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;

 

(b) transfer of the securities by the depository from the account of a beneficial owner to the account of another beneficial owner when such securities are dealt with by a depository;

 

(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, selling or dealing in securities.

 

 

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The Securities Contract (Regulation) Act, 1956

 

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