{ "act_code": "SCRA", "act_name": "Securities Contracts (Regulation) Act", "year": 1956, "status": "current", "total_sections": 78, "sections": [ { "act_code": "SCRA", "chapter_number": "I", "chapter_title": "PRELIMINARY", "section_number": "1", "section_title": "Short title, extent and commencement.", "text": "1. Short title, extent and commencement .—(1) This Act may be called the Securities Contracts\n(Regulation) Act, 1956.\n(2) It extends to the whole of India.\n(3) It shall come into force on such date2 as the Central Government may, by notification in the Official\nGazette, appoint." }, { "act_code": "SCRA", "chapter_number": "I", "chapter_title": "PRELIMINARY", "section_number": "2", "section_title": "Definitions.", "text": "2. Definitions.—In this Act, unless the context otherwise requires,—\n(a) “contract” means a contract for or relating to the purchase or sale of securities;\n3[(aa) “corporatisation” means the succession of a recognised stock exchange, being a body of\nindividuals or a society registered under the Societies Registration Act, 1860 (21 of 1860), by another\nstock exchange, being a company incorporated for the purpose of assisting, regulat ing or controlling\nthe business of buying, selling or dealing in securities carried on by such individuals or society;\n(ab) “demutualisation” means the segregation of ownership and management from the trading\nrights of the members of a recognised stock exchange in accordance with a scheme approved by the\nSecurities and Exchange Board of India;]\n4[ 5[(ac)] “derivative” includes—\n(A) a security derived from a debt instrument, share, loan, whether secured or unsecured, risk\ninstrument or contract for differences or any other form of security;\n(B) a cont ract which derives its value from the prices, or index of prices, of underlying\nsecurities;]\n6[(C) commodity derivatives; and\n(D) such other instruments as may be declared by the Central Government to be derivatives;]\n(b) “Government security ” means a security created and issued, whether before or after the\ncommencement of this Act, by the Central Government or a State Government for the purpose of raising\na public loan and having one of the forms specified in clause ( 2) of section 2 of the Public Debt Act,\n1944 (18 of 1944);\n6[(bb) “goods” mean every kind of movable property other than actionable claims, money and\nsecurities;\n(bc) “commodity derivative” means a contract—\n(i) for the delivery of such goods, as may be notified by the Central Government in the Official\nGazette, and which is not a ready delivery contract; or\n\n(ii) for differences, which derives its value from prices or indices of prices of such underlying goods or\nactivities, services, rights, interests and events, as may be notified by the Central Government, in consultation\nwith the Board, but does not include securities as referred to in sub-clauses (A) and (B) of clause (ac);]\n(c) “member” means a member of a recognised stock exchange;\n1[(ca) “non-transferable specific delivery contract” means a specific delivery contract, the rights or liabilities\nunder which or under any delivery order, railway receipt, bill of lading, warehouse receipt or any other documents\nof title relating thereto are not transferable;]\n(d) “option in securities” means a contract for the purchase or sale of a right to buy or sell, or a right to buy\nand 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\nsecurities;\n2[(da) “pooled investment vehicle” means a fund established in India in the form of a trust or otherwise, such\nas mutual fund, alternative investment fund, collective investment scheme or a business trust as defined in\nsub-section (13A) of section 2 of the Income -tax Act, 1961 (43 of 1961) and registered with the Securities and\nExchange Board of India, or such other fund, which raises or collects monies from investors and invests such\nfunds in accordance with such regulations as may be made by the Securities and Exchange Board of India in this\nbehalf;]\n(e) “prescribed” means prescribed by rules made under this Act;\n1[(ea) “ready delivery contract” means a contract which provides for the delivery of goods and the payment\nof a price therefor , either immediately, or within such period not exceeding eleven days after the date of the\ncontract and subject to such conditions as the Central Government may, by notification in the Official Gazette,\nspecify in respect of any goods, the period under su ch contract not being capable of extension by the mutual\nconsent of the parties thereto or otherwise:\nProvided that where any such contract is performed either wholly or in part;\n(I) by realisation of any sum of money being the difference between the contract rate and the settlement\nrate or clearing rate or the rate of any offsetting contract; or\n(II) by any other means whatsoever, and as a result of which the actual tendering of the goods covered by\nthe contract or payment of the full price therefor is dispensed with, then such contract shall not be deemed to\nbe a ready delivery contract;]\n(f) “recognised stock exchange” means a stock exchange which is for the time being recognised by the Central\nGovernment under section 4;\n(g) “rules”, with reference to the rules relating in general to the constitution and management of a stock\nexchange, includes, in the case of a stock exchange which is an incorporated association, its memorandum and\narticles of association;\n3[(ga) “scheme” means a scheme for corporatisation or demutualisation of a recognised stock exchange which\nmay provide for—\n(i) the issue of shares for a lawful consideration and provision of trading rights in lieu of membership\ncards of members of a recognised stock exchange;\n(ii) the restrictions on voting rights;\n(iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of the recognised\nstock exchange, legal proceedings by, or against, the recognised stock exchange, whether in the name of the\nrecognised stock exchange or any truste e or otherwise and any permission given to, or by, the recognised\nstock exchange;\n(iv) the transfer of employees of a recognised stock exchange to another recognised stock exchange;\n(v) any other matter required for the purpose of, or in connection with, t he corporatisation or\ndemutulisation, as the case may be, of the recognised stock exchange;]\n4[ 5[(gb)] “Securities Appellate Tribunal” means a Securities Appellate Tribunal established under\nsub-section (1) of section 15K of the Securities and Exchange Board of India Act, 1992 (15 of 1992) ;]\n(h) “securities” include—\n(i) shares, scrips stocks, bonds, debentures, debenture stock or other marketable securities of a like nature\nin or of any incorporated company or 6[or a pooled investment vehicle or other body corporate];\n\n1[(ia) derivative;\n(ib) units or any other instrument issued by any collective investment scheme to the investors\nin such schemes;]\n2[(ic) security receipt as defined in clause ( zg) of section 2 of the Securitisation and\nReconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);]\n3[(id) units or any other such instrument issued to the investors under any mutual fund scheme;]\n4[(ida) units or any other instrument issued by any pooled investment vehicle;]\n5[Explanation.—For the removal of doubts, it is hereby declared that “securities” shall not\ninclude any unit linked insurance policy or scrips or any such instrument or unit, by whatever name\ncalled, which provides a combined benefit risk on the life of the persons and investment by such\npersons and issued by an insurer referred to in clause ( 9) of section 2 of the Insurance\nAct, 1938 (4 of 1938).]\n6[(ie) any certificate or instrument (by whatever name called), issued to an investor by any\nissuer being a special purpose distinct entity which possesses any debt or receivable, including\nmortgage debt, assigned to such entity, and acknowledging beneficial in terest of such investor in\nsuch debt or receivable including mortgage debt, as the case may be;]\n7[(ii) Government securities;\n(iia) Such other instruments as may be declared by the Central Government to be securities;\nand]\n(iii) rights or interests in securities;\n8[(ha) “specific delivery contract” means a commodity derivative which provides for the actual\ndelivery of specific qualities or types of goods during a specified future period at a price fixed thereby\nor to be fixed in the manner thereby agreed and in which the names of both the buyer and the seller\nare mentioned;]\n9[(i) “spot delivery contract” means a contract which provides for,—\n(a) actual delivery of securities and the payment of a price therefor either on the same day as\nthe date of the contract or on the next day, the actual periods taken for the despatch of the securities\nor the remittance of money therefor through the post being excluded from the computation of the\nperiod aforesaid if the parties to the contract do not reside in the same town or locality;\n(b) transfer of the securities by the depository from the account of a beneficial owner to the\naccount of another beneficial owner when such securities are dealt with by a depository;]\n10[(j) “stock exchange” means—\n(a) any body of individuals, whether incorporated or not, constituted before corporatisation and\ndemutualisation under sections 4A and 4B, or\n(b) a body corporate incorporated under the Companies Act, 1956 (1 of 1956) whether under a\nscheme of corporatisation and demutualisation or otherwise,\nfor the purpose of assisting, regulating or controlling the business of buying, sel ling or dealing in\nsecurities;]\n\n1[(k) “transferable specific delivery contract” means a specific delivery contract which is not a non-\ntransferable specific delivery contract and which is subject to such conditions relating to its\ntransferability as the Central Government may by notification in the Official Gazette, specify in this\nbehalf.]" }, { "act_code": "SCRA", "chapter_number": "I", "chapter_title": "PRELIMINARY", "section_number": "2A", "section_title": "Interpretation of certain words and expressions.", "text": "2[2A. Interpretation of certain words and expressions.—Words and expressions used herein and not\ndefined in this Act but defined in the Companies Act, 1956 (1 of 1956) or the Securities and Exchange\nBoard of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) shall have the same\nmeanings respectively assigned to them in those Acts.]" }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "3", "section_title": "Application for recognition of stock exchanges.", "text": "3. Application for recognition of stock exchanges .—(1) Any stock exchange, which is desirous of\nbeing recognised for the purposes of this Act, may make an application in the prescribed manner to the\nCentral Government.\n(2) Every application under sub -section (1) shall contain such p articulars as may be prescribed , and\nshall be accompanied by a copy of the bye -laws of the stock exchange for the regulation and control of\ncontracts and also a copy of the rules relating in general to the constitution of the stock exchange, and in\nparticular, to—\n(a) the governing body of such stock exchange, its constitution and powers of management and the\nmanner in which the business is to be transacted;\n(b) the powers and duties of the office bearers of the stock exchange;\n(c) the admission into the stock exchange of various classes of members, the qualifications for\nmembership, and the exclusion, suspension, expulsion and re -admission of members therefrom or\nthereinto;\n(d) the procedure for the registration of partnership as members of the stock exchange in cases\nwhere the rules provide for such membership; and the nomination and appointment of authorised\nrepresentatives and clerks." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "4", "section_title": "Grant of recognition to stock exchanges.", "text": "4. Grant of recognition to stock exchanges.—(1) If the Central Government is satisfied, after making\nsuch inquiry as may be necessary in this behalf and after obtaining such further information, if any, as it\nmay require,—\n(a) that the rules and bye-laws of a stock exchange applying for registration are in conformity with\nsuch conditions as may be prescribed with a view to ensure fair dealing and to protect investors;\n(b) that the stock exchange is willing to comply with any other conditions (including conditions as\nto the number of members) which the Central Government, after consultation with the governing body\nof the stock exchange and having regard to the area served by the stock exchange and its standing and\nthe nature of the securities dealt with by it, may impose for the purpose of carrying out the objects of\nthis Act; and\n(c) that it would be in the interest of the trade and also in the public interest to grant recognition to\nthe stock exchange,\nit may grant recognition to the stock exchange subject to the conditions imposed upon it as aforesaid and\nin such form as may be prescribed.\n(2) The conditions which the Central Government may prescribe under clause (a) of sub-section (1) for\nthe grant of recognition to the stock exchanges may include, among other matters, conditions relating to,—\n(i) the qualifications for membership of stock exchanges;\n(ii) the manner in which contracts shall be entered into and enforced as between members;\n\n(iii) the representation of the Central Government on each of the stock exchanges by such number\nof persons not exceeding three as the Central Government may nominate in this behalf; and\n(iv) the maintenance of accounts of members and their audit by chartered accountants wherever\nsuch audit is required by the Central Government.\n(3) Every grant of recognition to a stock exchange under this section shall be published in the Gazette\nof India and also in the Official Gazette of the State in which the principal office of the stock exchange is\nsituate, and such recognition shall have effect as from the date of its publication in the Gazette of India.\n(4) No application for the grant of recognition shall be refused except after giving an opportunity to the\nstock exchange concerned to be heard in the matter; and the reasons for such refusal shall be communicated\nto the stock exchange in writing.\n(5) No rules of a recognised stock exchange relating to any of the matters specified in sub -section (2)\nof section 3 shall be amended except with the approval of the Central Government." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "4A", "section_title": "Corporatisation and demutualisation of stock exchanges.", "text": "1[4A. Corporatisation and demutualisation of stock exchanges.—On and from the appointed date,\nall recognised stock exchanges (if not corporatised and demutualised before the appointed date) shall be\ncorporatised and demutualised in accordance with the provisions contained in section 4B:\nProvided that the Securities and Exchange Board of India may, if it is satisfied that any recognised\nstock exchange was prevented by sufficient cause from being corporatised and demutualised on or after the\nappointed date, specify another appointed date in respect of that recognised stock exchange and such\nrecognised stock exchange may continue as such before such appointed date.\nExplanation.—For the purposes of this section, “appointed date” means the date which the Securities\nand Exchange Board of India may, by notification in the Official Gazette, appoint and different appointed\ndates may be appointed for different recognised stock exchanges." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "4B", "section_title": "Procedure for corporatisation and demutualisation.", "text": "4B. Procedure for corporatisation and demutualisation.—(1) All recognised stock exchanges\nreferred to in section 4A shall, within such time as may be specified by the Securities and Exchange Board\nof India, submit a scheme for corporatisation and demutulisation for its approval:\nProvided that the Securities and Exchange Board of India, may, by notification in the Official Gazette,\nspecify name of the recognised stock exchange, which had already been corporatised and demutualised,\nand such stock exchange shall not be required to submit the scheme under this section.\n(2) On receipt of the scheme referred to in sub-section (1), the Securities and Exchange Board of India\nmay, after making such enquiry as may be necessary in this behalf and obtaining such further information,\nif any, as it may require and if it is satisfied that it would be in the interest of the trade and also in the public\ninterest, approve the scheme with or without modification.\n(3) No scheme under sub-section (2) shall be approved by the Securities and Exchange Board of India\nif the issue of shares for a lawful consideration or provision of trading rights in lieu of membership card of\nthe members of a recognised stock exchange or payment of dividends to members have been proposed out\nof any reserves or assets of that stock exchange.\n(4) Where the scheme is approved under sub -section (2), the scheme so approved sha ll be published\nimmediately by—\n(a) the Securities and Exchange Board of India in the Official Gazette;\n(b) the recognised stock exchange in such two daily newspapers circulating in India, as may be\nspecified by the Securities and Exchange Board of India,\nand upon such publication, notwithstanding anything to the contrary contained in this Act or any other law\nfor the time being in force or any agreement, award, judgment, decree or other instrument for the time being\nin force, the scheme shall have effect and be binding on all persons and authorities including all members,\ncreditors, depositors and employees of the recognised stock exchange and on all persons having any\n\ncontract, right, power, obligation or liability, with, against, over, to, or in connection with, the recognised\nstock exchange or its members.\n(5) Where the Securities and Exchange Board of India is satisfied that it would not be in the interest of\nthe trade and also in the public interest to approve the scheme under sub -section (2), it may, by an order,\nreject the scheme and such order of rejection shall be published by it in the Official Gazette:\nProvided that the Securities and Exchange Board of India shall give a reasonable opportunity of being\nheard to all the persons concerned and the recognised stock exchange concerned before passing an order\nrejecting the scheme.\n(6) The Securities and Exchange Board of India may, while approving the scheme under\nsub-section (2), by an order in writing, restrict—\n(a) the voting rights of the shareholders who are also stock brokers of the recognised stock\nexchange;\n(b) the right of shareholders or a stock broker of the recognised stock exchange to appoint the\nrepresentatives on the governing board of the stock exchange;\n(c) the maximum number of representatives of the stock brokers of the recognised stock exchange\nto be appointed on the governing board of the recognised stock exchange, which shall not exceed\none-fourth of the total strength of the governing board.\n(7) The order made under sub -section ( 6) shall be published in the Official Gazette and on the\npublication thereof, the order shall, notwithstanding anything to the contrary contained in the Companies\nAct, 1956 (1 of 1956), or any other law for the time being in force, have full effect.\n(8) Every recognised stock exchange, in respect of which the scheme for corporatisation or\ndemutualisation has been approved under sub-section (2), shall, either by fresh issue of equity shares to the\npublic or in any other manner as may be specified by the regulations made by the Securities and Exchange\nBoard of India, ensure that at least fifty-one per cent. of its equity share capital is held, within twelve months\nfrom the date of publication of the order under sub-section (7), by the public other than shareholders having\ntrading rights:\nProvided that the Securities and Exchange Board of India may, on sufficient cause being shown to it\nand in the public interest, extend the said period by another twelve months.]" }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "5", "section_title": "Withdrawal of recognition.", "text": "5. Withdrawal of recognition.—1[(1)] If the Central Government is of opinion that the recognition\ngranted to a stock exchange under the provisions of this Act should, in the interest of the trade or in the\npublic interest, be withdrawn, the Central Government may serve on the governing body of the stock\nexchange a written notice that the Central Government is considering the withdrawal of the recognition for\nthe reasons stated in the notice, and after giving an opportunity to the governing body to be heard in the\nmatter, the Central Governmen t may withdraw, by notification in the Official Gazette, the recognition\ngranted to the stock exchange:\nProvided that no such withdrawal shall affect the validity of any contract entered into or made before\nthe date of the notification, and the Central Government may, after consultation with the stock exchange,\nmake such provision as it deems fit in the noti fication of withdrawal or in any subsequent notification\nsimilarly published for the due performance of any contracts outstanding on that date.\n2[(2) Where the recognised stock exchange has not been corporatised or demutualised or it fails to\nsubmit the scheme referred to in sub -section (1) of section 4B wit hin the specified time therefor or the\nscheme has been rejected by the Securities and Exchange Board of India under sub -section ( 5) of\nsection 4B, the recognition granted to such stock exchange under section 4, shall notwithstanding anything\nto the contrary contained in this Act, stand withdrawn and the Central Government shall publish, by\nnotification in the Official Gazette, such withdrawal of recognition:\n\n1. S. 5 numbered as sub-section (1) thereof by Act 1 of 2005, s. 4 (w.e.f. 12-10-2004).\n\nProvided that no such withdrawal shall affect the validity of any contract entered into or made before\nthe date of the notification, and the Securities and Exchange Board of India may, after consultation with\nthe stock exchange, make such provisions as it deems fit in the order rejecting the scheme published in the\nOfficial Gazette under sub-section (5) of section 4B.]" }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "6", "section_title": "Power of Central Government to call for periodical returns or direct inquiries to be made.", "text": "6. Power of Central Government to call for periodical returns or direct inquiries to be\nmade.—(1) Every recognised stock exchange shall furnish to the 1[Securities and Exchange Board of India]\nsuch periodical returns relating to its affairs as may be prescribed.\n(2) Every recognised stock exchange and every member thereof shall maintain and preserve for such\nperiods not exceeding five years, such books of account, and other documents as the Central Government,\nafter consultation with the stock exchange concerned, may prescribe in the interest of the trade or in the\npublic interest, and such books of account, and other documents shall be subje ct to inspection at all\nreasonable times 2[by the Securities and Exchange Board of India].\n(3) Without prejudice to the provisions contained in sub -sections (1) and ( 2), the 1[Securities and\nExchange Board of India], if it is satisfied that it is in the interest of the trade or in the public interest so to\nby do, may, by order in writing,—\n(a) call upon a recognised stock exchange or any member thereof to furnish in writing such\ninformation or explanation relating to the affairs of the stock exchange or of the member in relation to\nthe stock exchange as the 1[Securities and Exchange Board of India] may require; or\n(b) appoint one or more persons to make an inquiry in the prescribed manner in relation to the\naffairs of the governing body of a stock exchange or the affairs of any of the members of the stock\nexchange in relation to the stock exchange and submit a report of the result if such inquiry to the\n1[Securities and Exchange Board of India] within such time as may be specified in the order or, in the\ncase of an inquiry in relation to the affairs of any of the members of a stock exchange, direct the\ngoverning body to make the inquiry and submit its report to the 1[Securities and Exchange Board of\nIndia].\n(4) Where an inquiry in relation to the affairs of a recognised stock exchange or the affairs of any of its\nmembers in relation to the stock exchange has been undertaken under sub-section (3),—\n(a) every director, manager, secretary or other officer of such stock exchange;\n(b) every member of such stock exchange;\n(c) if the member of the stock exchange is a firm, every partner, manager, secretary or other officer\nof the firm; and\n(d) every other person or body of persons who has had dealing in the course of business with any\nof the persons mentioned in clauses (a), (b) and (c), whether directly or indirectly,\nshall be bound to produce before the authority making the inquiry all such books of account, and other\ndocuments in his custody or power relating to or having a bearing on the subject-matter of such inquiry and\nalso to furnish the authorities within such time as may be specified, with any such statement or information\nrelating thereto as may be required of him." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "7", "section_title": "Annual reports to be furnished to Central Government by stock exchanges.", "text": "7. Annual reports to be furnished to Central Government by stock exchanges.—Every recognised\nstock exchange shall furnish the Central Government with a copy of the annual report, and such annual\nreport shall contain such particulars as may be prescribed." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "7A", "section_title": "Power of recognised stock exchange to make rules restricting voting rights, etc.", "text": "3[7A. Power of recogni sed stock exchange to make rules restricting voting rights, etc. —(1) A\nrecognised stock exchange may make rules or amend any rules made by it to provide for all or any of the\nfollowing matters, namely:—\n(a) the restriction of voting rights to members only in respect of any matter placed before the stock\nexchange at any meeting;\n\n(b) the regulation of voting rights in respect of any matter placed before the stock exchange at any\nmeeting so that such member may be entitled to have one vote only, irrespective of his share of the\npaid-up equity capital of the stock exchange;\n(c) the restriction on the right of a member to appoint another person as his proxy to attend and\nvote at a meeting of the stock exchange;\n(d) such incidental consequential and supplementary matters as may be necessary to give effect to\nany of the matters specified in clauses (a), (b) and (c).\n(2) No rules of a recognised stock exchange made or amended in relation to any matter referred to in\nclauses ( a) to ( d) of sub -section ( 1) shall have effect until they have been approved by the Central\nGovernment and published by that Government in the Official Gazette and, in approving the rules so made\nor amended, the Central Government may make such modifications therein as it thinks fit , and on such\npublication, the rules as approved by the Central Government shall be deemed to have been validly made,\nnotwithstanding anything to the contrary contained in the Companies Act, 1956 (1 of 1956).]" }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "8", "section_title": "Power of Central Government to direct rules to be made or to make rules.", "text": "8. Power of Central Government to direct rules to be made or to make rules .—(1) Where, after\nconsultation with the governing bodies of stock exchanges generally or with the governing body of any\nstock exchange in particular, the Central Government is of opinion that it is necessary or expedient so to\ndo, it may, by order in writing , together with a statement of the reasons therefor, direct recognised stock\nexchanges generally or any recognised stock exchange in particular, as the case may be, to make any rules\nor to amend any rules already made in respect of all or any of the matters specified in sub -section (2) of\nsection 3 within a period of 1[two months] from the date of the order.\n(2) If any recognised stock exchange fails or neglects to comply with any order made under\nsub-section (1) within the period specified therein, the Central Government may make the rules for, or\namend the rules made by, the recognised stock exchange, either in the form proposed in the order or with\nsuch modifications thereof as may be agreed to between the stock exchange and the Central Government.\n(3) Where in pursuance of this section , any rules have been made or amended, the rules so made or\namended shall be published in the Gazette of India and also in the Official Gazette or Gazettes of the State\nor States in which the principal office or offices of the recognised stock exchange or e xchanges is or are\nsituate, and , on the publication thereof in the Gazette of India, the rules so made or amended shall,\nnotwithstanding anything to the contrary contained in the Companies Act, 1956 (1 of 1956), or in any other\nlaw for the time being in force, have effect, as if they had been made or amended by the recognised stock\nexchange or stock exchanges, as the case may be." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "8A", "section_title": "Clearing corporation.", "text": "2[8A. Clearing corporation.—(1) A recognised stock exchange may, with the prior approval of the\nSecurities and Exchange Board of India, transfer the duties and functions of a clearing house to a clearing\ncorporation, being a company incorporated under the Companies Act, 1956 ( 1 of 1956), for the purpose\nof—\n(a) the periodical settlement of contracts and differences thereunder;\n(b) the delivery of, and payment for, securities;\n(c) any other matter incidental to, or connected with, such transfer.\n(2) Every clearing corporation shall, for the purpose of transfer of the duties and functions of a clearing\nhouse to a clearing corporation referred to in sub -section (1), make bye-laws and submit the same to the\nSecurities and Exchange Board of India for its approval.\n(3) The Securities and Exchange Board of India may, on being satisfied that it is in the interest of the\ntrade and also in the public interest to transfer the duties and functions of a clearing house to a clearing\ncorporation, grant approval to the bye -laws submitted to it under sub-section (2) and approve the transfer\nof the duties and functions of a clearing house to a clearing corporation referred to in sub-section (1).\n\n(4) The provisions of sections 4, 5, 6, 7, 8, 9, 10, 11 and 12 shall, as far as may be, apply to a clearing\ncorporation referred to in sub-section (1) as they apply in relation to a recognised stock exchange.]" }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "9", "section_title": "Power of recognised stock exchanges to make bye-laws.", "text": "9. Power of recognised stock exchanges to make bye -laws.—(1) Any recogni sed stock exchange\nmay, subject to the previous approval of the 1[Securities and Exchange Board of India], make bye-laws for\nthe regulation and control of contracts.\n(2) In particular, and without prejudice to the generality of the foregoing power , such bye-laws may\nprovide for—\n(a) the opening and closing of markets and the regulation of the hours of trade;\n(b) a clearing house for the periodical settlement of contracts and differences thereunder, the\ndelivery of and payment for securities, the passing on of delivery orders and the regulation and\nmaintenance of such clearing house;\n(c) the submission to the 1[Securities and Exchange Board of India], by the clearing house as soon\nas may be after each periodical settlement of all or any of the following particulars as the 1[Securities\nand Exchange Board of India] may, from time to time, require, namely:—\n(i) the total number of each category of security carried over from one settlement period to\nanother;\n(ii) the total number of each category of security, contracts in respect of which have been\nsquared up during the course of each settlement period;\n(iii) the total number of each category of security actually delivered at each clearing;\n(d) the publication by the clearing house of all or any of the particulars submitted to the 1[Securities\nand Exchange Board of India] under clause (c) subject to the directions, if any, issued by the 1[Securities\nand Exchange Board of India] in this behalf;\n(e) the regulation or prohibition of blank transfers;\n(f) the number and classes of contracts in respect of which settlements shall be made or differences\npaid through the clearing house;\n(g) the regulation, or prohibition of budlas or carry-over facilities;\n(h) the fixing, altering or postponing of days for settlements;\n(i) the determination and declaration of market rates, including the opening, closing, highest and\nlowest rates for securities;\n(j) the terms, conditions and incidents of contracts, including the prescription of margin\nrequirements, if any, and conditions relating thereto, and the forms of contracts in writing;\n(k) the regulation of the entering into, making, performance, rescission and termination, of\ncontracts, including contracts between members or between a member and his constituent or between\na member and a person who is not a member, and the consequences of default or insolvency on the part\nof a seller or buyer or intermediary, the consequences of a breach or omission by a seller or buyer, and\nthe responsibility of members who are not parties to such contracts;\n(l) the regulation of taravani business including the placing of limitations thereon;\n(m) the listing of securities on the stock exchange, the inclusion of any security for the purpose of\ndealings and the suspension or withdrawal of any such securities, and the suspension or prohibition of\ntrading in any specified securities;\n(n) the method and procedure for the settlement of claims or disputes, including settlement by\narbitration;\n(o) the levy and recovery of fees, fines and penalties;\n\n(p) the regulation of the course of business between parties to contracts in any capacity;\n(q) the fixing of a scale of brokerage and other chargers;\n(r) the making, comparing, settling and closing of bargains;\n(s) the emergencies in trade which may arise, whether as a result of pool or syndicated operations\nor cornering or otherwise, and the exercise of powers in such emergencies, including the power to fix\nmaximum and minimum prices for securities;\n(t) the regulation of dealings by members for their own account;\n(u) the separation of the functions of the jobbers and brokers;\n(v) the limitations on the volume of trade done by any individual member in exceptional\ncircumstances;\n(w) the obligation of members to supply such information or explanation and to produce such\ndocuments relating to the business as the governing body may require.\n(3) The bye-laws made under this section may—\n(a) specify the bye -laws the contravention of which shall make a contract entered into otherwise\nthan in accordance with the bye-laws void under sub-section (1) of section14;\n(b) provide that the contravention of any of the bye-laws shall render the member concerned liable\nto one or more of the following punishments, namely:—\n(i) fine;\n(ii) expulsion from membership;\n(iii) suspension from membership for a specified period;\n(iv) any other penalty of a like nature not involving the payment of money.\n(4) Any bye -laws made under this section shall be subject to such conditions in regard to previous\npublication as may be prescribed, and , when approved by the 1[Securities and Exchange Board of India ],\nshall be published in the Gazette of India and also in the Official Gazette of the State in which the principal\noffice of the recognised stock exchange is situate, and shall have effect as from the date of its publication\nin the Gazette of India:\nProvided that if the 1[Securities and Exchange Board of India] is satisfied in any case that in the interest\nof the trade or in the public interest any bye -law should be made immediately, it may, by order in writing\nspecifying the reasons therefor, dispense with the condition of previous publication." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "10", "section_title": "Power of Securities and Exchange Board of India to make or amend bye-laws of recognised stock exchanges.", "text": "10. Power of 1[Securities and Exchange Board of India] to make or amend bye-laws of recognised\nstock exchanges.—(1) The 1[Securities and Exchange Board of India] may, either on a request in writing\nreceived by it in this behalf from the governing body of a recognised stock exchange or on its own motion,\nif it is satisfied after consultation with the governing body of the stock exchange that it is necessary or\nexpedient so to do and after recording its reasons for so doing, make bye-laws for all or any of the matters\nspecified in section 9 or amend any bye-laws made by such stock exchange under that section.\n(2) Where in pursuance of this section any bye-laws have been made or amended, the bye-laws so made\nor amended shall be published in the Gazette of India and also in the Official Gazette of the State in which\nthe principal office of the recognised stock exchange is situate, and on the publication thereof in the Gazette\nof India, the bye-laws so made or amended shall have effect as if they had been made or amended by the\nrecognised stock exchange concerned.\n\n(3) Notwithstanding anything contained in this section, where the governing body of a recognised stock\nexchange objects to any bye -laws made or amended under this section by the 1[Securities and Exchange\nBoard of India] on its own motion, it may, within 2[two months] of the publication thereof in the Gazette\nof India under sub-section (2), apply to the 1[Securities and Exchange Board of India] for revision thereof,\nand the 1[Securities and Exchange Board of India] may, after giving an opportunity to the governing body\nof the stock exchange to be heard in the matter, revise the bye -laws so made or amended, and where any\nbye-laws so made or amended are revised as a result of any action taken under this sub -section, t he\nbye-laws so revised shall be published and shall become effective as provided in sub-section (2).\n(4) The making or the amendment or revision of any bye-laws under this section shall, in all cases, be\nsubject to the condition of previous publication:\nProvided that if the 1[Securities and Exchange Board of India] is satisfied in any case that in the interest\nof the trade or in the public interest any bye-laws should be made, amended or revised immediately, it may,\nby order in writing specifying the reasons therefor, dispense with the condition of previous publication." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "11", "section_title": "Power of Central Government to supersede governing body of a recognised stock exchange.", "text": "11. Power of Central Government to supersede governing body of a recognised stock exchange.—\n(1) Without prejudice to any other powers vested in the Central Government under this Act, where the\nCentral Government is of opinion that the governing body of any recognised stock exchange should be\nsuperseded, then, notwithstanding anything contained in a ny other law for the time being in force, the\nCentral Government may serve on the governing body a written notice that the Central Government is\nconsidering the supersession of the governing body for the reasons specified in the notice and after giving\nan opportunity to the governing body to be heard in the matter it may, by notification in the Official Gazette,\ndeclare the governing body of such stock exchange to be superseded, and may appoint any person or persons\nto exercise and perform all the powers and duties of the governing body, and, where more persons than one\nare appointed, may appoint one of such persons to be the chairman and another to be the Vice-Chairman\nthereof.\n(2) On the publication of a notification in the Official Gazette under sub -section (1), the following\nconsequences shall ensue, namely:—\n(a) the members of the governing body which has been superseded shall, as from the date of the\nnotification of supersession, cease to hold office as such members;\n(b) the person or persons appointed under sub-section (1) may exercise and perform all the powers\nand duties of the governing body which has been superseded;\n(c) all such property of the recognised stock exchange as the person or persons appointed under\nsub-section (1) may, by order in writing, specify in this behalf as being necessary for the purpose of\nenabling him or them to carry on the business of the stock exchange, shall vest in such person or\npersons.\n(3) Notwithstanding anything to the contrary contained in any law or the rules or bye -laws of the\nrecognised stock exchange the governing body of which is superseded under sub-section (1), the person or\npersons appointed under that sub -section shall hold office for such period as may be specified in the\nnotification published under that sub-section, and the Central Government may from time to time, by like\nnotification, vary such period.\n(4) The Central Government may at any time before the determination of the period of office of any\nperson or persons appointed under this section call upon the recognised stock exchange to re-constitute the\ngoverning body in accordance with its rules and on such re-constitution all the property of the recognised\nstock exchange which has vested in, or was in the possession of, the person or persons appointed under\nsub-section (1) shall re-vest or vest, as the case may be, in the governing body so re-constituted:\nProvided that until a governing body is so re -constituted, the person or persons appointed under\nsub-section (1), shall continue to exercise and perform their powers and duties." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "12", "section_title": "Power to suspend business of recognised stock exchanges.", "text": "12. Power to suspend business of recognised stock exchanges .—If in the opinion of the Central\nGovernment an emergency has risen and for the purpose of meeting the emergency the Central Government\nconsiders it expedient so to do, it may, by notification in the Official Gazette, for reasons to be set out\ntherein, direct a recognised stock exchange to suspend such of its business for such period not exceeding\nseven days and subject to such conditions as may be specified in the notification, and, if, in the opinion of\nthe Central Government, the interest of the trade or the public interest requires that the period should be\nextended, may, by like notification extend the said period from time to time:\nProvided that where the period of suspension is to be extended beyond the first period, no notification\nextending the period of suspension shall be issued unless the governing body of the 1[recognised association\nstock exchange] has been given an opportunity of being heard in the matter." }, { "act_code": "SCRA", "chapter_number": "II", "chapter_title": "RECOGNISED STOCK EXCHANGES", "section_number": "12A", "section_title": "Power to issue directions.", "text": "2[12A. Power to issue directions .—3[(1)] If, after making or causing to be made an inquiry, the\nSecurities and Exchange Board of India is satisfied that it is necessary—\n(a) in the interest of investors, or orderly development of securities market;\n(b) to prevent the affairs of any recognised stock exchange or clearing corporation, or such other\nagency or person, providing trading or clearing or settlement facility in respect of securities, being\nconducted in a manner detrimental to the interests of investors or securities market; or\n(c) to secure the proper management of any such stock exchange or clearing corporation or agency\nor person, referred to in clause (b),\nit may issue such directions,—\n(i) to any stock exchange or clearing corporation or agency or person referred to in clause (b)\nor any person or class of persons associated with the securities market; or\n(ii) to any company whose securities are listed or proposed to be listed in a recognised stock\nexchange,\nas may be appropriate in the interests of investors in securities and the securities market.]\n4[Explanation.—For the removal of doubts, it is hereby declared that power to issue directions under\nthis section shall include and always be deemed to have been included the power to direct any person, who\nmade profit or averted loss by indulging in any transaction or activity in contravention of the provisions of\nthis Act or regulations made thereunder, to disgorge an amount equivalent to the wrongful gain made or\nloss averted by such contravention.]\n5[(2) Without prejudice to the provisions of sub -section ( 1) and section 23 -I, the Securities and\nExchange Board of India may, by an order, for reasons to be recorded in writing, levy penalty under section\n23A, 23B, 23C, 23D, 23E, 23F, 23G, 23GA and 23H after holding an inquiry in the prescribed manner.]" }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "13", "section_title": "Contracts in notified areas illegal in certain circumstances.", "text": "13. Contracts in notified areas illegal in certain circumstances.—If the Central Government is satisfied,\nhaving regard to the nature or the volume of transactions in securities in any 6[State or States or area], that it is\nnecessary so to do, it may, by notification in the Official Gazette, declare this section to apply to such 6[State or\nStates or area], and thereupon every contract in such 6[State or States or area] which is entered into after the date\nof the notification otherwise than 7[between members of a recognised stock exchange or recogni sed stock\nexchanges] in such 6[State or States or area] or through or with such member shall be illegal.\n8[Provided that any contract entered into between members of two or more recognised stock exchanges in\nsuch State or States or area, shall—\n(i) be subject to such terms and conditions as may be stipulated by the respective stock exchanges\nwith prior approval of Securities and Exchange Board of India;\n\n(ii) require prior permission from the respective stock exchanges if so stipulated by the stock\nexchanges with prior approval of the Securities and Exchange Board of India.]" }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "13A", "section_title": "Additional trading floor.", "text": "1[13A. Additional trading floor.—A stock exchange may establish additional trading floor with the\nprior approval of the Securities and Exchange Board of India in accordance with the terms and conditions\nstipulated by the said Board.\nExplanation.—For the purposes of this section, “additional trading floor” means a trading ring or\ntrading facility offered by a recognised stock exchange outside its area of operation to enable the investors\nto buy and sell securities through such trading floor under the regulatory framework of that stock exchange.]" }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "14", "section_title": "Contracts in notified areas to be void in certain circumstances.", "text": "14. Contracts in notified areas to be void in certain circumstances.—(1) Any contract entered into\nany State or area specified in the notification under section 13 which is in contravention of any of the bye-\nlaws specified in that behalf under clause (a) of sub-section (3) of section 9 shall be void—\n(i) as respects the rights of any member of the recognised stock exchange who has entered into such\ncontract in contravention of any such bye-law, and also\n(ii) as respects the rights of any other person who has knowingly participated in the transaction\nentailing such contravention.\n(2) Nothing in sub-section (1) shall be construed to affect the right of any person other than a member\nof the recognised stock exchange to enforce any such contract or to recover any sum under or in respect of\nsuch contract if such person had no knowledge that the transaction was in contravention of any of the\nbye-laws specified in clause (a) of sub-section (3) of section 9." }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "15", "section_title": "Members may not act as principals in certain circumstances.", "text": "15. Members may not act as principals in certain circumstances .—No member of a recognised\nstock exchange shall in respect of any securities enter into any contract as a principal with any person other\nthan a member of a recognised stock exchange, unless he has secured the consent or authority of such\nperson and disclos es in the note, memorandum or agreement of sale or purchase that he is acting as a\nprincipal:\nProvided that where the member has secured the consent or authority of such person otherwise than in\nwriting he shall secure written confirmation by such persons of such consent or authority within three days\nfrom the date of the contract:\nProvided further that no such written consent or authority of such person shall be necessary for closing\nout any outstanding contract entered into by such person in accordance with the bye -laws, if the member\ndiscloses in the note, memorandum or agreement of sale or purchase in respect of such closing out that he\nis acting as a principal." }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "16", "section_title": "Power to prohibit contracts in certain cases.", "text": "16. Power to prohibit contracts in certain cases.—(1) If the Central Government is of opinion that it\nis necessary to prevent undesirable speculation in specified securities in any State or area, it may, by\nnotification in the Official Gazette, declare that no person in the State or area specified in the no tification\nshall, save with the permission of the Central Government, enter into any contract for the sale or purchase\nof any security specified in the notification except to the extent and in the manner, if any, specified therein.\n(2) All contracts in contravention of the provisions of sub-section (1) entered into after the date of the\nnotification issued thereunder shall be illegal." }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "17", "section_title": "Licensing of dealers in securities in certain areas.", "text": "17. Licensing of dealers in securities in certain areas .—(1) Subject to the provisions of\nsub-section (3) and to the other provisions contained in this Act, no person shall carry on or purport to carry\non, whether on his own behalf or on behalf of any other person, the business of dealing securities in any\nState or area to which section 13 has not been declared to apply and to which the Central Government may,\nby notification in the Official Gazette, declare this section to apply, except under the authority of a 2[licence\ngranted by the Securities and Exchange Board of India] in this behalf.\n(2) No notification under sub -section (1) shall be issued with respect to any State or area unless the\nCentral Government is satisfied, having regard to the manner in which securities are being dealt with in\nsuch State or area, that it is desirable or expedient in the interest of the trade or in the public interest that\nsuch dealings should be regulated by a system of licensing.\n\n(3) The restrictions imposed by sub-section (1) in relation to dealings in securities shall not apply to the\ndoing of anything by or on behalf of a member of any recognised stock exchange." }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "17A", "section_title": "Public issue and listing of securities referred to in sub-clause (ie) of clause (h) of section 2.", "text": "1[17A. Public issue and listing of securities referred to in sub -clause ( ie) of clause ( h) of\nsection 2.—(1) Without prejudice to the provisions contained in this Act or any other law for the time being\nin force, no securities of the nature referred to in sub -clause (ie) of clause (h) of section 2 shall be offered\nto the public or listed on any recognised stock exchange unless the issuer fulfils such eligibility criteria and\ncomplies with such other requirements as may be specified by regulations made by the Securities and\nExchange Board of India.\n(2) Every issuer referred to in sub-clause (ie) of clause (h) of section 2 intending to offer the certificates\nor instruments referred therein to the public shall make an application, before issuing the offer document to\nthe public, to one or more recognised stock exchanges for permission for such certificates or i nstruments\nto be listed on the stock exchange or each such stock exchange.\n(3) Where the permission applied for under sub -section (2) for listing has not been granted or refused\nby the recognised stock exchanges or any of them, the issuer shall forthwith repay all moneys, if any,\nreceived from applicants in pursuance of the offer document, and if any such money is not repaid within\neight days after the issuer becomes liable to repay it, the issuer and every director or trustee thereof, as the\ncase may be, who is in default shall, on and from the expiry of the eighth day, be jointly and severally liable\nto repay that money with interest at the rate of fifteen per cent. per annum.\nExplanation.—In reckoning the eighth day after another day, any intervening day which is a public\nholiday under the Negotiable Instruments Act, 1881(26 of 1881), shall be disregarded, and if the eighth day\n(as so reckoned) is itself such a public holiday, there shall for the said purposes be substituted the first day\nthereafter which is not a holiday.\n(4) All the provisions of this Act relating to listing of securities of a public company on a recognised\nstock exchange shall, mutatis mutandis, apply to the listing of the securities of the nature referred to in\nsub-clause (ie) of clause (h) of section 2 by the issuer, being a special purpose distinct entity.]" }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "18", "section_title": "Exclusion of spot delivery contracts from sections 13, 14, 15 and 17.", "text": "18. Exclusion of spot delivery contracts from sections 13, 14, 15 and 17.—(1) Nothing contained in\nsections 13, 14, 15 and 17 shall apply to spot delivery contracts.\n(2) Notwithstanding anything contained in sub-section (1), if the Central Government is of opinion that\nin the interest of the trade or in the public interest it is expedient to regulate and control the business of\ndealing in spot delivery contracts also in any State or area (whether section 13 has been declared to apply\nto that State or area or not), it may, by notification in the Official Gazette, declare that the provisions of\nsection 17 shall also apply to such State or area in respect of spot delivery contracts generally or in respect\nof spot delivery contracts for the sale or purchase of such securities as may be specified in the notification,\nand may also specify the manner in which, and the extent to which, the provisions of that section shall so\napply." }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "18A", "section_title": "Contracts in derivative.", "text": "2[18A. Contracts in derivative .—Notwithstanding anything contained in any other law for the time\nbeing in force, contracts in derivative shall be legal and valid if such contracts are—\n(a) traded on a recognised stock exchange;\n(b) settled on the clearing house of the recognised 3[stock exchange; or],\nin accordance with the rules and bye-laws of such stock exchange.]\n4[(c) between such parties and on such terms as the Central Government may, by notification in the\nOfficial Gazette, specify.]" }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "19", "section_title": "Stock exchanges other than recognised stock exchanges prohibited.", "text": "19. Stock exchanges other than recognised stock exchanges prohibited .—(1) No person shall,\nexcept with the permission of the Central Government, organise or assist in organising or be a member of\n\nany stock exchange (other t han a recognised stock exchange ) for purpose of assisting in, entering into or\nperforming any contracts in securities.\n(2) This section shall come into force in any State or area on such date as the Central Government may,\nby notification in the Official Gazette, appoint." }, { "act_code": "SCRA", "chapter_number": "III", "chapter_title": "CONTRACTS AND OPTIONS IN SECURITIES", "section_number": "20", "section_title": "[Omitted.].", "text": "20. [Prohibition of options in securities .] Omitted by the Securities Laws (Amendment) Act, 1995\n(9 of 1995), s. 22 (w.e.f. 25-1-1995)." }, { "act_code": "SCRA", "chapter_number": "IV", "chapter_title": "LISTING OF SECURITIES BY PUBLIC COMPANIES", "section_number": "21", "section_title": "Conditions for listing.", "text": "2[21. Conditions for listing .—Where securities are listed on the application of any person i n any\nrecognised stock exchange, such person shall comply with the conditions of the listing agreement with that\nstock exchange.]" }, { "act_code": "SCRA", "chapter_number": "IV", "chapter_title": "LISTING OF SECURITIES BY PUBLIC COMPANIES", "section_number": "21A", "section_title": "Delisting of securities.", "text": "3[21A. Delisting of securities .—(1) A recognised stock exchange may delist the securities, after\nrecording the reasons therefor , from any recognised stock exchange on any of the ground or grounds as\nmay be prescribed under this Act:\nProvided that the securities of a company shall not be delisted unless the company concerned has been\ngiven a reasonable opportunity of being heard.\n(2) A listed company or an aggrieved investor may file an appeal before the Securities Appellate\nTribunal against the decision of the recognised stock exchange delisting the securities within fifteen days\nfrom the date of the decision of the recognised stock exchange delisting the securities and the provisions of\nsections 22B to 22E of this Act, shall apply, as far as may be, to such appeals:\nProvided that the Securities Appellate Tribunal may, if it is satisfied that the company was prevented\nby sufficient cause from filing the appeal within the said period, allow it to be filed within a further period\nnot exceeding one month.]" }, { "act_code": "SCRA", "chapter_number": "IV", "chapter_title": "LISTING OF SECURITIES BY PUBLIC COMPANIES", "section_number": "22", "section_title": "Right of appeal against refusal by stock exchanges to list securities of public companies.", "text": "4[22. Right of appeal against refusal by stock exchanges to list securities of public companies .—\nWhere a recognised stock exchange acting in pursuance of any power given to it by its bye-laws, refuses to\nlist the securities of any public company 5[or collective investment scheme], the company 5[or scheme]\nshall be entitled to be furnished with the reasons for such refusal, and may,—\n(a) within fifteen days from the date on which the reasons for such refusal are furnished to it, or\n(b) where the stock exchange has omitted or failed to dispose of, within the time specified in\nsub-section (1) of section 73 of the Companies Act, 1956 (1 of 1956) (hereafter in this section referred\nto as the “specified time”), the application for permission for the shares or debentures to be dealt with\non the stock exchange, within fifteen days from the date of expiry of specified time or within such\nfurther period, not exceeding one month, as the Central Government may, on s ufficient cause being\nshown, allow,\nappeal to the Central Government against such refusal, omission of failure, as the case may be, and\nthereupon the Central Government may, after giving the stock exchange an opportunity of being heard,—\n(i) vary or set aside the decision of the stock exchange, or\n(ii) where the stock exchange has omitted or failed to dispose of the application within the specified\ntime, grant or refuse the permission,\nand where the Central Government sets aside the decision of the recognised stock exchange or grants the\npermission, the stock exchange shall act in conformity with the orders of the Central Government:]\n\n1[Provided that no appeal shall be preferred against refusal, omission or failure, as the case may be,\nunder this section on and after the commencement of the Securities Laws (Second Amendment) Act, 1999\n(32 of 1999).]" }, { "act_code": "SCRA", "chapter_number": "IV", "chapter_title": "LISTING OF SECURITIES BY PUBLIC COMPANIES", "section_number": "22A", "section_title": "Right of appeal to Securities Appellate Tribunal against refusal of stock exchange to list securities of public companies.", "text": "2[22A. Right of appeal to Securities Appellate Tribunal against refusal of stock exchange to list\nsecurities of public companies .—(1) Where a recognised stock exchange, acting in pursuance of any\npower given to it by its bye-laws, refuses to list the securities of any company, the company shall be entitled\nto be furnished with reasons for such refusal, and may,—\n(a) within fifteen days from the date on which the reasons for such refusal are furnished to it, or\n(b) where the stock exchange has omitted or failed to dispose of, within the time specified in\nsub-section (1A) of section 73 of the Companies Act, 1956 (1 of 1956) (hereafter in this section referred\nto as the “specified time”), the application for permission for the shares or debentures to be dealt with\non the stock exchange, within fifteen days from the date of expiry of the specified time or within such\nfurther period, not exceeding one month, as the Securities Appellate Tribunal may, on sufficient cause\nbeing shown, allow,\nappeal to the Securities Appellate Tribunal having jurisdiction in the matter against such refusal, omission\nor failure, as the case may be, and thereupon the Securities Appellate Tribunal may, after giving the stock\nexchange, an opportunity of being heard,—\n(i) vary or set aside the decision of the stock exchange; or\n(ii) where the stock exchange has omitted or failed to dispose of the application within the specified\ntime, grant or refuse the permission,\nand where the Securities Appellate Tribunal sets aside the decision of the recognised stock exchange or\ngrants the permission, the stock exchange shall act in conformity with the orders of the Securities Appellate\nTribunal.\n(2) Every appeal under sub-section (1) shall be in such form and be accompanied by such fee as may\nbe prescribed.\n(3) The Securities Appellate Tribunal shall send a copy of every order made by it to the Board and\nparties to the appeal.\n(4) The appeal filed before the Securities Appellate Tribunal under sub -section (1) shall be dealt with\nby it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within\nsix months from the date of receipt of the appeal." }, { "act_code": "SCRA", "chapter_number": "IV", "chapter_title": "LISTING OF SECURITIES BY PUBLIC COMPANIES", "section_number": "22B", "section_title": "Procedure and powers of Securities Appellate Tribunal.", "text": "22B. Procedure and powers of Securities Appellate Tribunal.—(1) The Securities Appellate\nTribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908),\nbut shall be guided by the principles of natural justice and, subject to the other provisions of this Act and\nof any rules, the Securities Appellate Tribunal shall have powers to regulate their own procedure including\nthe places at which they shall have their sittings.\n(2) The Securities Appellate Tribunal shall have, for the purpose of discharging their functions under\nthis Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908),\nwhile trying a suit, in respect of the following matters, namely:—\n(a) summoning and enforcing the attendance of any person and examining him on oath;\n(b) requiring the discovery and production of documents;\n(c) receiving evidence on affidavits;\n(d) issuing commissions for the examination of witnesses or documents;\n(e) reviewing its decisions;\n\n(f) dismissing an application for default or deciding it ex parte;\n(g) setting aside any order of dismissal of any application for default or any order passed by it\nex parte; and\n(h) any other matter which may be prescribed.\n(3) Every proceeding before the Securities Appellate Tribunal shall be deemed to be a judicial\nproceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the\nIndian Penal Code (45 of 1860) and the Securities Appellate Tribunal shall be deemed to be a civil\ncourt for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973\n(2 of 1974)." }, { "act_code": "SCRA", "chapter_number": "IV", "chapter_title": "LISTING OF SECURITIES BY PUBLIC COMPANIES", "section_number": "22C", "section_title": "Right to legal representation.", "text": "22C. Right to legal representation.—The appellant may either appear in person or authorise one or\nmore chartered accountants or company secretaries or cost accountants or legal practitioners or any of its\nofficers to present his or its case before the Securities Appellate Tribunal.\nExplanation.—For the purposes of this section,—\n(a) “chartered accountant” means a chartered accountant as defined in clause ( b) of\nsub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained\na certificate of practice under sub-section (1) of section 6 of that Act;\n(b) “company secretary” means a company secretary as defined in clause (c) of sub-section (1) of\nsection 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a certificate of\npractice under sub-section (1) of section 6 of that Act;\n(c) “cost accountant” means a cost accountant as defined in clause ( b) of sub -section ( 1) of\nsection 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate\nof practice under sub-section (1) of section 6 of that Act;\n(d) “legal practitioner” means an advocate, vakil or an attorney of any High Court, and includes a\npleader in practice." }, { "act_code": "SCRA", "chapter_number": "IV", "chapter_title": "LISTING OF SECURITIES BY PUBLIC COMPANIES", "section_number": "22D", "section_title": "Limitation.", "text": "22D. Limitation.—The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be,\napply to an appeal made to a Securities Appellate Tribunal." }, { "act_code": "SCRA", "chapter_number": "IV", "chapter_title": "LISTING OF SECURITIES BY PUBLIC COMPANIES", "section_number": "22E", "section_title": "Civil court not to have jurisdiction.", "text": "22E. Civil court not to have jurisdiction.—No civil court shall have jurisdiction to entertain any suit\nor proceeding in respect of any matter which a Securities Appellate Tribunal is empowered by or under this\nAct to determine and no injunction shall be granted by any court or other authority in respect of any action\ntaken or to be taken in pursuance of any power conferred by or under this Act." }, { "act_code": "SCRA", "chapter_number": "IV", "chapter_title": "LISTING OF SECURITIES BY PUBLIC COMPANIES", "section_number": "22F", "section_title": "Appeal to Supreme Court.", "text": "1[22F. Appeal to Supreme Court.—Any person aggrieved by any decision or order of the Securities\nAppellate Tribunal may file an appeal to the Supreme Court within sixty days from the date of\ncommunication of the decision or order of the Securities Appellate Tribunal to him on any question of law\narising out of such order:\nProvided that the Supreme Court may, if it is satisfied that the appellant was prevented by sufficient\ncause from filing the appeal within the said period, allow it to be filed within a further period not exceeding\nsixty days.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23", "section_title": "Penalties.", "text": "23. Penalties.—(1) Any person who—\n(a) without reasonable excuse (the burden of proving which shall be on him) fails to comply with\nany requisition made under sub-section (4) of section 6; or\n(b) enters into any contract in contravention of any of the provisions contained in section 13 or\nsection 16; or\n(c) contravenes the provisions contained in 2[section 17 or section 17A] or section 19; or\n3[(d) enters into any contract in derivative in contravention of section 18A or the rules made under\nsection 30.]\n\n(e) owns or keeps a place other than that of a recognised stock exchange which is used for the\npurpose of entering into or performing any contracts in contravention of any of the provisions of this\nAct and knowingly permits such place to be used for such purposes; or\n(f) manages, controls, or assists in keeping any place other than that of a recognised stock exchange\nwhich is used for the purpose of entering into or performing any contracts in contravention of any of\nthe provisions of this Act or at which contracts are r ecorded or adjusted or rights or liabilities arising\nout of contracts are adjusted, regulated or enforced in any manner whatsoever; or\n(g) not being a member of a recognised stock exchange or his agent authorised as such under the\nrules or bye-laws of such stock exchange or not being a dealer in securities licensed under section 17\nwilfully represents to or induces any person to believe that contracts can be entered into or performed\nunder this Act through him; or\n(h) not being a member of a recognised stock exchange or his agent authorised as such under the\nrules or bye-laws of such stock exchange or not being a dealer in securities licensed under section 17,\ncanvasses, advertises or touts in any manner , either for himself or on behalf of any other persons for\nany business connected with contracts in contravention of any of the provisions of this Act; or\n(i) joins, gathers or assists in gathering at any place other than the place of business specified in the\nbye-laws of a recognised stock exchange, any person or persons for making bids or offers or for entering\ninto or performing any contracts in contravention of any of the provisions of this Act,\n1[shall, without prejudice to any award of pena lty by the Adjudicating Officer 2[or the Securities and\nExchange Board of India] under this Act, on conviction, be punishable with imprisonment for a term which\nmay extend to ten years or with fine, which may extend to twenty-five crore rupees or with both].\n(2) Any person who enters into any contract in contravention of the provisions contained in section 15\n3[or who fails to comply with the provisions of 4[section 21 or section 21A] or with the orders of]\n5[Securities and Exchange Board 4[section 21 or section 21A ] of India or the Central Government under\nsection 22] 6[or with the orders of the Securities Appellate Tribunal] 7[shall, without prejudice to any award\nof penalty by the Adjudicating Officer under this Act, on conviction, be punishable with imprisonment for\na term which may extend to ten years or with fine, which may extend to twenty -five crore rupees, or with\nboth.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23A", "section_title": "Penalty for failure to furnish information, return, etc.", "text": "8[23A. Penalty for failure to furnish information, return, etc.—Any person, who is required under\nthis Act or any rules made thereunder,—\n(a) to furnish any information, document, books, returns or 9[report to a recognised stock exchange\nor to the Board, fails to furnish the same within the time specified therefor in the listing agreement or\nconditions or bye-laws of the recognised stock exchange or the Act or rules made thereunder, or who\nfurnishes] 10[false, incorrect or incomplete information, document, books, return or report], shall be\nliable to a penalty 11[which shall not be less than one lakh rupees but which may extend to one lakh\nrupees for each during which such failure continues subject to a maximum of one crore rupees],\nwhichever is less for each such failure;\n(b) to maintain books of account or records, as per the listing agreement or conditions, or\nbye-laws of a recognised stock exchange, fails to maintain the same, shall be liable to a penalty\n11[which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day\nduring which such failure continues subject to a maximum of one crore rupees]." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23B", "section_title": "Penalty for failure by any person to enter into an agreement with clients.", "text": "23B. Penalty for failure by any person to enter into an agreement with clients .—If any person,\nwho is required under this Act or any bye -laws of a recognised stock exchange made thereunder, to enter\ninto an agreement with his client, fails to enter into such an agreement, he shall be liable to a penalty\n1[which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during\nwhich such failure continues subject to a maximum of one crore rupees] for every such failure." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23C", "section_title": "Penalty for failure to redress Investors, grievances.", "text": "23C. Penalty for failure to redress Investors , grievances.—If any stock broker or sub -broker or a\ncompany whose securities are listed or proposed to be listed in a recognised stock exchange, after having\nbeen called upon by the Securities and Exchange Board of India or a recognised stock exchange in writing,\nto redress the grievances of the investors, fails to redress such grievances within the time stipulated by the\nSecurities and Exchange Board of India or a recognised stock exchange, he or it shall be liable to a\npenalty 2[which shall not be less than one lakh rupees but which may extend to one lakh rupees for each\nday during which such failure continues subject to a maximum of one crore rupees]." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23D", "section_title": "Penalty for failure to segregate securities or moneys of client or clients.", "text": "23D. Penalty for failure to segregate securities or moneys of client or clients.—If any person, who\nis registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) , as a\nstock broker or sub -broker, fails to segregate securities or moneys of the client or clients or uses the\nsecurities or moneys of a client or clients for self or for any other client, he shall be 3[liable to a penalty\nwhich shall not be less than one lakh rupees but which may extend to one crore rupees]." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23E", "section_title": "Penalty for failure to comply with listing conditions or delisting conditions or grounds.", "text": "23E. Penalty for failure to comply with listing conditions or delisting conditions or grounds.—If\na company or any person managing collective investment scheme or mutual fund 4[or real estate investment\ntrust or infrastructure investment trust or alternative investment fund ], fails to comply with the listing\nconditions or delisting conditions or grounds or commits a breach thereof, it or he shall be 5[liable to a\npenalty which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees]." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23F", "section_title": "Penalty for excess dematerialisation or delivery of unlisted securities.", "text": "23F. Penalty for excess dematerialisation or delivery of unlisted securities .—If any issuer\ndematerialises securities more than the issued securities of a company or delivers in the stock exchanges\nthe securities which are not listed in the recognised stock exchange or delivers securities where no trading\npermission has been given by the recognised stock exchange, he shall be 6[liable to a penalty which shall\nnot be less than five lakh rupees but which may extend to twenty-five crore rupees]." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23G", "section_title": "Penalty for failure to furnish periodical returns, etc.", "text": "23G. Penalty for failure to furnish periodical returns, etc.—If a recognised stock exchange fails or\nneglects to furnish periodical returns 7[or furnishes false, incorrect or incomplete periodical returns] to the\nSecurities and Exchange Board of India or fails or neglects to make or amend its rules or bye -laws as\ndirected by the Securities and Exchange Board of India or fails to comply with directions issued by the\nSecurities and Exchange Board of India, such recognised stock exchange shall be 8[liable to a penalty which\nshall not be less than five lakh rupees but which may extend to twenty-five crore rupees]." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23GA", "section_title": "Penalty for failure to conduct business in accordance with rules, etc.", "text": "9[23GA. Penalty for failure to conduct business in accordance with rules, etc .—Where a stock\nexchange or a clearing corporation fails to conduct its business with its members or any issuer or its agent\nor any person associated with the securities markets in accordance with the rules or regulations mad e by\nthe Securities and Exchange Board of India and the directions issued by it under this Act, the stock exchange\nor the clearing corporations, as the case may be, shall be liable to penalty which shall not be less than five\ncrore rupees but which may extend to twenty-five crore rupees or three times the amount of gains made out\nof such failure, whichever is higher.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23H", "section_title": "Penalty for contravention where no separate penalty has been provided.", "text": "23H. Penalty for contravention where no separate penalty has been provided.—Whoever fails to\ncomply with any provision of this Act, the rules or articles or bye-laws or the regulations of the recognised\nstock exchange or directions issued by the Securities and Exchange Board of India for which no separate\npenalty has been provided , shall be 1[liable to a penalty which shall not be less than one lakh rupees but\nwhich may extend to one crore rupees]." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23-I", "section_title": "Power to adjudicate.", "text": "23-I. Power to adjudicate.—(1) For the purpose of adjudging under sections 23A, 23B, 23C, 23D,\n23E, 23F, 23G and 23H, the Securities and Exchange Board of India 2[may] appoint any officer not below\nthe rank of a Division Chief of the Securities and Exchange Board of India to be an adjudicating officer for\nholding an inquiry in the prescribed manner after giving any person concerned a reasonable opportunity of\nbeing heard for the purpose of imposing any penalty.\n(2) While holding an inquiry, the adjudicating officer shall have power to summon and enforce the\nattendance of any person acquainted with the facts and circumstances of the case to give evidence or to\nproduce any document, which in the opinion of the adjudi cating officer, may be useful for or relevant to\nthe subject-matter of the inquiry and if, on such inquiry, he is satisfied that the person has failed to comply\nwith the provisions of any of the sections specified in sub-section (1), he may impose such penalty as he\nthinks fit in accordance with the provisions of any of those sections.\n3[(3) The Board may call for and examine the record of any proceedings under this section and if it\nconsiders that the order passed by the adjudicating officer is erroneous to the extent it is not in the interests\nof the securities market, it may, after making or causing to be made such inquiry as it deems necessary,\npass an order enhancing the quantum of penalty, if the circumstances of the case so justify:\nProvided that no such order shall be passed unless the person concerned has been given an opportunity\nof being heard in the matter:\nProvided further that nothing contained in this sub-section shall be applicable after an expiry of a period\nof three months from the date of the order passed by the adjudicating officer or disposal of the appeal under\nsection 23L, whichever is earlier.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23J", "section_title": "Factors to be taken into account while adjudicating quantum of penalty.", "text": "23J. 4[Factors to be taken into account while adjudging quantum of penalty.]—While adjudging\nthe quantum of penalty under 5[section 12A or section 23-I], 6[the Securities and Exchange Board of India\nor the adjudicating officer] shall have due regard to the following factors, namely:—\n(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result\nof the default;\n(b) the amount of loss caused to an investor or group of investors as a result of the default;\n(c) the repetitive nature of the default.\n7[Explanation.—For the removal of doubts, it is clarified that the power of an adjudicating officer to\nadjudge the quantum of penalty under sections 23A to 23C shall be and shall always be deemed to have\nexercised under the provisions of this section.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23JA", "section_title": "Settlement of administrative and civil proceedings.", "text": "8[23JA. Settlement of adminis trative and civil proceedings. —(1) Notwithstanding anything\ncontained in any other law for the time being in force, any person, against whom any proceedings have\nbeen initiated or may be initiated under section 12A or section 23-1, may file an application in writing to\nthe Board proposing for settlement of the proceedings initiated or to be initiated for the alleged defaults.\n\n(2) The Board may, after taking into consideration the nature, gravity and impact of defaults, agree, to\nthe proposal for settlement, on payment of such sum by the defaulter or on such other terms as may be\ndetermined by the Board in accordance with the regulations made under the Securities and Exchange Board\nof India Act, 1992 (15 of 1992).\n(3) For the purposes of settlement under this section, the procedure as specified by the Board under the\nSecurities and Exchange Board of India Act, 1992 (15 of 1992) shall apply.\n(4) No appeal shall lie under section 23L against any order passed by the Board or the adjudicating\nofficer, as the case may be, under this section.]\n1[(5) All settlement amounts, excluding the disgorgement amount and legal costs, reali sed under this\nAct shall be credited to the Consolidated Fund of India.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23JB", "section_title": "Recovery of amounts.", "text": "2[23JB. Recovery of amounts.—(1) If a person fails to pay the penalty imposed 3[under this Act] or\nfails to comply with a direction of disgorgement order issued under section 12A or fails to pay any fees due\nto the Board, the Recovery Officer may draw up under his signature a statement in the specified form\nspecifying the amount due from the person (such statement being hereafter in this Chapter referred to as\ncertificate) and shall proceed to recover from such person the amount specified in the certificate by one or\nmore of the following modes, namely:—\n(a) attachment and sale of the person’s movable property;\n(b) attachment of the person’s bank accounts;\n(c) attachment and sale of the person’s immovable property;\n(d) arrest of the person and his detention in prison;\n(e) appointing a receiver for the management of the person’s movable and immovable properties,\nand for this purpose, the provisions of sections 220 to 227, 228A, 229, 232, the Second and Third\nSchedules to the Income -tax Act, 1961 (43 of 1961) and the Income -tax (Certificate Proceedings)\nRules, 1962, as in force from time to time, in so far as may be, apply with necessary modifications as\nif the said provisions and the rules thereunder were the provisions of this Act and referred to the amount\ndue under this Act instead of to income-tax under the Income-tax Act, 1961.\nExplanation 1.—For the purposes of this sub-section, the person’s movable or immovable property or\nmonies held in bank accounts shall include any property or monies held in bank accounts which has been\ntransferred, directly or indirectly on or after the date when the amount specified in certificate had become\ndue, by t he person to his spouse or minor child or son ’s wife or son ’s minor child, otherwise than for\nadequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid; and so\nfar as the movable or immovable property or monies held in bank accounts so transferred to his minor child\nor his son’s minor child is concerned, it shall, even after the date of attainment of majority by such minor\nchild or son ’s minor child, as the case may be, continue to be included in the person ’s movable or\nimmovable property or monies held in bank accounts for recovering any amount due from the person under\nthis Act.\nExplanation 2.—Any reference under the provisions of the Second and Third Schedules to the Income-\ntax Act, 1961 (43 of 1961) and the Income-tax (Certificate Proceedings) Rules, 1962 to the assessee shall\nbe construed as a reference to the person specified in the certificate.\nExplanation 3.—Any reference to appeal in Chapter XVIID and the Second Schedule to the\nIncome-tax Act, 1961 (43 of 1961), shall be construed as a reference to appeal before the Securities\nAppellate Tribunal under section 23L of this Act.\n(2) The Recovery Officer shall be empowered to seek the assistance of the local district administration\nwhile exercising the powers under sub-section (1).\n\n(3) Notwithstanding anything contained in any other law for the time being in force, the recovery of\namounts by a Recovery Officer under sub-section (1), pursuant to non-compliance with any direction issued\nby the Board under section 12A, shall have precedence over any other claim against such person.\n(4) For the purposes of sub -sections (1), (2) and ( 3), the expression “Recovery Officer” means any\nofficer of the Board who may be authorised, by general or special order in writing to exercise the powers\nof a Recovery Officer.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23JC", "section_title": "Continuance of proceedings.", "text": "1[23JC. Continuance of proceedings.—(1) Where a person dies, his legal representative shall be liable\nto pay any sum which the deceased would have been liable to pay, if he had not died, in the like manner\nand to the same extent as the deceased:\nProvided that, in case of any penalty payable under this Act, a legal representative shall be liable only\nin case the penalty has been imposed before the death of the deceased person.\n(2) For the purposes of sub-section (1),—\n(a) any proceeding for disgorgement, refund or an action for recovery before the Recovery Officer\nunder this Act, except a proceeding for levy of penalty, initiated against the deceased before his death\nshall be deemed to have been initiated against the legal representative, and may be continued against\nthe legal representative from the stage at which it stood on the date of the death of the deceased and all\nthe provisions of this Act shall apply accordingly;\n(b) any proceeding for disgorgement, refund or an action for recovery before the Recovery Officer\nunder this Act, except a proceeding for levy of penalty, which could have been initiated against the\ndeceased if he had survived, may be initiated against the legal represe ntative and all the provisions of\nthis Act shall apply accordingly.\n(3) Every legal representative shall be personally liable for any sum payable by him in his capacity as\nlegal representative if, while his liability for such sum remains undercharged, he creates a charge on or\ndisposes of or pa rts with any assets of the estate of the deceased, which are in, or may come into, his\npossession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with.\n(4) The liability of a legal representative under this section shall, be limited to the extent to which the\nestate of the decreased is capable of meeting the liability.\nExplanation.—For the purpose s of this section “Legal representative” means a person who in law\nrepresents the estate of a deceased person, and includes any person who intermeddles with the estate of the\ndeceased and where a party sue s or is sued in a representative character, the person on whom the estate\ndevolves on the death of the party so suing or sued.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23K", "section_title": "Crediting sum realised by way of penalties to Consolidated Fund of India.", "text": "23K. Crediting sum realised by way of penalties to Consolidated Fund of India.—All sums realised\nby way of penalties under this Act shall be credited to the Consolidated Fund of India." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23L", "section_title": "Appeal to Securities Appellate Tribunal.", "text": "23L. Appeal to Securities Appellate Tribunal.—(1) Any person aggrieved, by the order or decision\nof the recognised stock exchange or the adjudicating officer or any order made by the Securities and\nExchange Board of India under section 4B 2[or sub-section (3) of section 23-I], may prefer an appeal before\nthe Securities Appellate Tribunal and the provisions of sections 22B, 22C, 22D and 22E of this Act, shall\napply, as far as may be, to such appeals.\n(2) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on\nwhich a copy of the order or decision is received by the appellant and it shall be in such form and be\naccompanied by such fee as may be prescribed:\nProvided that the Securities Appellate Tribunal may entertain an appeal after the expiry of the said\nperiod of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.\n(3) On receipt of an appeal under sub -section (1), the Securities Appellate Tribunal may, after giving\nthe parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming,\nmodifying or setting aside the order appealed against.\n\n(4) The Securities Appellate Tribunal shall send a copy of every order made by it to the parties to the\nappeal and to the concerned adjudicating officer.\n(5) The appeal filed before the Securities Appellate Tribunal under sub -section (1) shall be dealt with\nby it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within\nsix months from the date of receipt of the appeal." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23M", "section_title": "Offences.", "text": "23M. Offences.—(1) Without prejudice to any award of penalty by the adjudicating officer 1[or the\nSecurities and Exchange Board of India] under this Act, if any person contravenes or attempts to contravene\nor abets the contravention of the provisions of this Act or of any rules or regulations or\nbye-laws made thereunder, for which no punishment is provided elsewhere in this Act, he shall be\npunishable with imprisonment for a term which may extend to ten years, or with fine, which may extend to\ntwenty-five crore rupees or with both.\n(2) If any person fails to pay the penalty imposed by the adjudicating officer 1[or the Securities and\nExchange Board of India] or fails to comply with 2[the direction or order ], he shall be punishable with\nimprisonment for a term which shall not be less than one month but which may extend to ten years, or with\nfine, which may extend to twenty-five crore rupees, or with both." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23N", "section_title": "Composition of certain offences.", "text": "23N. Composition of certain offences.—Notwithstanding anything contained in the Code of Criminal\nProcedure, 1973 (2 of 1974), any offence punishable under this Act, not being an offence punishable with\nimprisonment only, or with imprisonment and also with fine, may either before or after the i nstitution of\nany proceeding, be compounded by a Securities Appellate Tribunal or a court before whic h such\nproceedings are pending." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "23-O", "section_title": "Power to grant immunity.", "text": "23-O. Power to grant immunity .—(1) The Central Government may, on recommendation by the\nSecurities and Exchange Board of India, if the Central Government is satisfied, that any person, who is\nalleged to have violated any of the provisions of this Act or the rules or the regulations made thereunder,\nhas made a full and true disclosure in respect of alleged violation, grant to such person, subject to such\nconditions as it may think fit to impose, immunity from prosecution for any offence under this Act, or the\nrules or the regulations made thereunder or also from the imposition of any penalty under this Act with\nrespect to the alleged violation:\nProvided that no such immunity shall be granted by the Central Government in cases where the\nproceedings for the prosecution for any such offence have been instituted before the date of receipt of\napplication for grant of such immunity:\nProvided further that the recommendations of the Securities and Exchange Board of India under this\nsub-section shall not be binding upon the Central Government.\n(2) An immunity granted to a person under sub -section (1) may, at any time, be withdrawn by the\nCentral Government, if it is satisfied that such person had, in the course of the proceedings, not complied\nwith the condition on which the immunity was granted or had given f alse evidence, and thereupon su ch\nperson may be tried for the offence with respect to which the immunity was granted or for any other offence\nof which he appears to have been guilty in connection with the contravention and shall also become liable\nto the imposition of any penalty under this Act to which such person would have been liable, had not such\nimmunity been granted.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "24", "section_title": "Contravention by companies.", "text": "24. 3[Contravention by companies].—(1) Where 4[a contravention of any of the provisions of this Act\nor any rule, regulation, direction or order made thereunder] has been committed by a company, every person\nwho, at the time when the 5[contravention] was committed, was in charge of, and was responsible to, the\ncompany for the conduct of the business of the company, as well as the company, shall be deemed to be\nguilty of the 5[contravention], and shall be liable to be proceeded against and punished accordingly:\nProvided that nothing contained in this sub -section shall render any such person liable to any\npunishment provided in this Act, if he proves that the 5[contravention] was committed without his\nknowledge or that he exercised all due diligence to prevent the commission of such 5[contravention].\n(2) Notwithsta nding anything contained in sub -section ( 1), where 6[a con travention of any of the\nprovisions of this Act or any rule, regulation, direction or order made thereunder] has been committed by a\n\ncompany and is proved that the 1[contravention] has been committed with the consent or connivance of, or\nis attributable to any gross negligence on the part of any director, manager, secretary or other officer of the\ncompany, such director, manager, secretary or other officer of the company, shall also be deemed to be\nguilty of that 1[contravention] and shall be liable to be proceeded against and punished accordingly.\nExplanation.—For the purpose of this section,—\n(a) “company” means any body corporate and includes a firm or other association of individuals,\nand\n2[(b) “director”, in relation to—\n(i) a firm, means a partner in the firm;\n(ii) any association of perso ns or a body of individuals, me ans any member controlling the\naffairs thereof.]\n3[(3) The provisions of this section shall be in addition to , and not in derogation of, the provisions of\nsection 22A.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "25", "section_title": "Certain offences to be cognizable.", "text": "25. Certain offences to be cognizable.—Notwithstanding anything contained in the Code of Criminal\nProcedure, 1898 (5 of 1898), any offence punishable under 4*** section 23 shall be deemed to be cognizable\noffence within the meaning of that Code." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "26", "section_title": "Cognizance of offences by courts.", "text": "5[26. Cognizance of offences by courts.—(1) No court shall take cognizance of any offence punishable\nunder this Act or any rules or regulations or bye -laws made thereunder, save on a complaint made by the\nCentral Government or State Government or the Securities and Exchange Board of India or a rec ognised\nstock exchange or by any person.]\n6* * * * *]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "26A", "section_title": "Establishment of Special Courts.", "text": "7[26A. Es tablishment of Special Courts. —(1) The Central Government may, for the purpose of\nproviding speedy trial of offences under this Act, by notification, establish or designate as many Special\nCourts as may be necessary.\n(2) A Special Court shall consist of a single judge who shall be appointed by the Central Government\nwith the concurrence of the Chief Justice of the High Court within whose jurisdiction the judge to be\nappointed is working.\n(3) A person shall not be qualified for appointment as a judge of a Special Court unless he is,\nimmediately before such appointment, holding the office of a Sessions Judge or an Additional Sess ions\nJudge, as the case may be." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "26B", "section_title": "Offences triable by Special Courts.", "text": "26B. Offen ces triable by Special Courts. —Notwithstanding anything contained in the Code of\nCriminal Procedure, 1973 (2 of 1974), all offences under this Act committed prior to the date of\ncommencement of the Securities Laws (Amendment) Act, 2014 (27 of 2014)\nor on or after the date of such commencement, shall be taken cognizance of and tried by the Special Court\nestablished for the area in which the offence is committed or where there are more Special Courts than one\nfor such area, by such one of them as may be specified in this behalf by the High Court concerned.]" }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "26C", "section_title": "Appeal and Revision.", "text": "26C. Appeal and Revision.—The High Court may exercise, so far as may be applicable, all the powers\nconferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 (2 of 1974) on a High\nCourt, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court of\nSession trying cases within the local limits of the jurisdiction of the High Court." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "26D", "section_title": "Application of Code to proceedings before Special Court.", "text": "26D. Application of Code to proceedings before Special Court.—(1) Save as otherwise provided in\nthis Act, the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply to the proceedings\n\nbefore a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be\na Court of Session and the person conducting prosecution before a Special Court shall be deemed to be a\nPublic Prosecutor within the meaning of clause (u) of section 2 of the Code of Criminal Procedure, 1973.\n(2) The person conducting prosecution referred to in sub-section (1) should have been in practice as an\nadvocate for not less than seven years or should have held a post, for a period of not less than seven years,\nunder the Union or a State, requiring special knowledge of law." }, { "act_code": "SCRA", "chapter_number": "V", "chapter_title": "PENALTIES AND PROCEDURE", "section_number": "26E", "section_title": "Transitional provisions.", "text": "26E. Transitional provisions.—Any offence committed under this Act, which is triable by a Special\nCourt shall, until a Special Court is established, be taken cognizance of and tried by a Court of Session\nexercising jurisdiction over the area, notwithstanding anything contained in the C ode of Criminal\nProcedure, 1973 (2 of 1974):\nProvided that nothing contained in this section shall affect the powers of the High Court under\nsection 407 of the Code to transfer any case or class of cases taken cognizance by a Court of Session under\nthis section.]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "27", "section_title": "Title to dividends.", "text": "27. Title to dividends.—(1) It shall be lawful for the holder of any security whose name appears on\nthe books of the company issuing the said security to receive and retain any dividend declared by the\ncompany in respect thereof for any year, notwithstanding that the said security has already been transferred\nby him for consideration, unless the transferee who claims the dividend from the transferor has lodged the\nsecurity and all other documents relating to the transfer which may be required by the company , with the\ncompany for being registered in his name within fifteen days of the date on which the dividend became\ndue.\nExplanation.—The period specified in this section shall be extended—\n(i) in case of death of the transferee, by the actual period taken by his legal representative to\nestablish his claim to the dividend;\n(ii) in case of loss of the transfer deed by theft or any other cause beyond the control of\nthe transferee, by the actual period taken for the replacement thereof; and\n(iii) in case of delay in the lodging of any security and other documents relating to the transfer due\nto causes connected with the post, by the actual period of the delay.\n(2) Nothing contained in sub-section (1) shall affect—\n(a) the right of a company to pay the dividend which has become due to any person whose name\nis for the time being registered in the books of the company as the holder of the security in respect of\nwhich the dividend has become due; or\n(b) the right of the transferee of any security to enforce against the transferor or any other person\nhis rights, if any, in relation to the transfer in any case where the company has refused to register the\ntransfer of the security in the name of the transferee." }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "27A", "section_title": "Right to receive income from collective investment scheme.", "text": "1[27A. Right to receive income from collective investment scheme .—(1) It shall be lawful for the\nholder of any securities, being units or other instruments issued by the collective investment scheme, whose\nname appears on the books of the collective investment scheme issuing the said security to receive and\nretain any inco me in respect of units or other instruments issued by the collective investment scheme\ndeclared by the collective investment scheme in respect thereof for any year, notwithstanding that the said\nsecurity, being units or other instruments issued by the coll ective investment scheme, has already been\ntransferred by him for consideration, unless the transferee who claims the income in respect of units or\nother instruments issued by the collective investment scheme from the transfer or has lodged the security\nand all other documents relating to the transfer which may be required by the collective investment scheme\nwith the collective investment scheme for being registered in his name within fifteen days of the date on\nwhich the income in respect of units or other instruments issued by the collective investment scheme\nbecame due.\n\nExplanation.—The period specified in this section shall be extended—\n(i) in case of death of the transferee, by the actual period taken by his legal representative to\nestablish his claim to the income in respect of units or other instrument issued by the collective\ninvestment scheme;\n(ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the\ntransferee, by the actual period taken for the replacement thereof; and\n(iii) in case of delay in the lodging of any security, being units or other instruments issued by the\ncollective investment scheme, and other documents relating to the transfer due to causes connected\nwith the post, by the actual period of the delay.\n(2) Nothing contained in sub-section (1) shall affect—\n(a) the right of a collective investment scheme to pay any income from units or other instruments\nissued by the collective investment scheme which has become due to any person whose name is for the\ntime being registered in the books of the collective investm ent scheme as the holder of the security\nbeing units or other instruments issued by the collective investment scheme in respect of which the\nincome in respect of units or other instruments issued by the collective scheme has become due; or\n(b) the right of transferee of any security, being units or other instruments issued by the collective\ninvestment scheme, to enforce against the transferor or any other person his rights, if any, in relation to\nthe transfer in any case where the company has refused to register the transfer of the security being\nunits or other instruments issued by the collective investment scheme in the name of the transferee.]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "27B", "section_title": "Right to receive income from mutual fund.", "text": "1[27B. Right to receive income from mutual fund .—(1) It shall be lawful for the holder of any\nsecurities, being units or other instruments issued by any mutual fund, whose name appears on the books\nof the mutual fund issuing the said security to receive and retain any income in respect of units or other\ninstruments issued by the mutual fund declared by the mutual fund in respect thereof for any year,\nnotwithstanding that the said security, being units or other instruments issued by the mutual fund, has\nalready been transferred by him for consideration, unle ss the transferee who claims the income in respect\nof units or other instruments issued by the mutual fund from the transferor has lodged the security and all\nother documents relating to the transfer which may be required by the mutual fund with the mutual fund\nfor being registered in his name within fifteen days of the date on which the income in respect of units or\nother instruments issued by the mutual fund became due.\nExplanation.—The period specified in this section shall be extended—\n(i) in case of death of the transferee, by the actual period taken by his legal representative to\nestablish his claim to the income in respect of units or other instrument issued by the mutual fund;\n(ii) in case of loss of the transfer deed by theft or any other cause beyond the control of transferee,\nby the actual period taken for the replacement thereof; and\n(iii) in case of delay in the lodging of any security, being units or other instruments issued by the\nmutual fund, and other documents relating to the transfer due to causes connected with the post, by the\nactual period of the delay.\n(2) Nothing contained in sub-section (1) shall affect—\n(a) the right of a mutual fund to pay any income from units or other instruments issued by the\nmutual fund which has become due to any person whose name is for the time being registered in the\nbooks of the mutual fund as the holder of the security being unit s or other instruments issued by the\nmutual fund in respect of which the income in respect of units or other instruments issued by mutual\nfund has become due; or\n(b) the right of transferee of any security, being units or other instruments issued by the mutual\nfund, to enforce against the transferor or any other person , his rights, if any, in relation to the transfer\n\nin any case where the mutual fund has refused to register the transfer of the security being units or other\ninstruments issued by the mutual fund in the name of the transferee.]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "28", "section_title": "Act not to apply in certain cases.", "text": "1[28. Act not to apply in certain cases.—(1) The provisions of this Act shall not apply to—\n(a) the Government, the Reserve Bank of India, any local authority or any corporation set up by a\nspecial law or any person who has effected any transaction with or through the agency of any such\nauthority as is referred to in this clause;\n(b) any convertible bond or share warrant or any option or right in relation thereto, in so far as it\nentitles the person in whose favour any of the foregoing has been issued to obtain , at his option, from\nthe company or other body corporate issuing the same or from any of its shareholders or duly appointed\nagents shares of the company or other body corporate , whether by conversion of the bond or warrant\nor otherwise, on the basis of the price agreed upon when the same was issued.\n(2) Without prejudice to the provisions contained in sub -section ( 1), if the Central Government is\nsatisfied that in the interests of trade and commerce or the economic development of the country , it is\nnecessary or expedient so to do, it may by notification in the Official Gazette, specify any class of contracts\nas contracts to which this Act or any provision contained therein shall not apply, and also the conditions,\nlimitations or restrictions, if any, subject to which it shall not so apply.]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "29", "section_title": "Protection of action taken in good faith.", "text": "29. Protection of action taken in good faith .—No suit, prosecution or other legal proceeding ,\nwhatsoever shall lie in any court against the governing body or any member, office bearer or servant of any\nrecognised stock exchange or against any person or persons appointed under sub -section (1) of section 11\nfor anything which is in good faith done or intended to be done in pursuance of this Act or of any rules or\nbye-laws made thereunder." }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "29A", "section_title": "Power to delegate.", "text": "2[29A. Power to delegate.—The Central Government may, by order published in the Official Gazette,\ndirect that the powers (except the power under section 30) exercisable by it under any provision of this Act\nshall, in relation to such matters and subject to such conditions, if any, as may be specified in the order, be\nexercisable also by the Securities and Exchange Board of India or the Reserve Bank of India constituted\nunder section 3 of the Reserve Bank of India Act, 1934 (2 of 1934).]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "29B", "section_title": "Powers of the Securities and Exchange Board of India not to apply to International Financial Services Centre.", "text": "3[29B. Powers of the Securities and Exchange Board of India not to apply to International\nFinancial Services Centre.—Notwithstanding anything contained in any other law for the time being in\nforce, the powers exercisable by the Securities and Exchange Board of India under this Act,—\n(a) shall not extend to an International Financial Services Centre set up under sub -section (1)\nof section18 of the Special Economic Zones Act, 2005 (28 of 2005);\n(b) shall be exercisable by the International Financial Services Centres Authority established under\nsub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019,\nin so far as regulation of financial products, financial services and financial institutions that are permitted\nin the International Financial Services Centres are concerned.]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "30", "section_title": "Power to make rules.", "text": "30. Power to make rules.—(1) The Central Government may, by notification in the Official Gazette,\nmake rules for the purpose of carrying into effect the objects of this Act.\n(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide\nfor,—\n(a) the manner in which applications may be made, the particulars which they should contain and\nthe levy of a fee in respect of such applications;\n(b) the manner in which any inquiry for the purpose of recogni sing any stock exchange may be\nmade, the conditions which may be imposed for the grant of such recognition, including conditions as\nto the admission of members if the stock exchange concerned is to be the only recognised stock\nexchange in the area; and the form in which such recognition shall be granted;\n\n(c) the particulars which should be contained in the periodical returns and annual reports to be\nfurnished to the Central Government;\n(d) the documents which should be maintained and preserved under section 6 and the periods for\nwhich they should be preserved;\n(e) the manner in which any inquiry by the governing body of a stock exchange shall be made under\nsection 6;\n(f) the manner in which the bye -laws to be made or amended under this Act shall before being so\nmade or amended be published for criticism;\n(g) the manner in which applications may be made by dealers in securities for licenses under section\n17, the fee payable in respect thereof and the period of such licences, the condition s subject to which\nlicences may be granted, including condition s relating to the forms which may be used in making\ncontracts, the documents to be maintained by licensed dealers and the furnishing of periodical\ninformation to such authority as may be specified and the revocation of licences for breach of\nconditions;\n1[(h) the requirements which shall be complied with—\n(A) by public companies for the purpose of getting their securities listed on any stock exchange;\n(B) by collective investment scheme for the purpose of getting their units listed on any stock\nexchange.]\n2[(ha) the grounds on which the securities of a company may be delisted from any recognised stock\nexchange under sub-section (1) of section 21A;\n(hb) the form in which an appeal may be filed before the Securities Appellate Tribunal under\nsub-section (2) of section 21A and the fees payable in respect of such appeal;\n(hc) the form in which an appeal may be filed before the Securities Appellate Tribunal under\nsection 22A and the fees payable in respect of such appeal;\n(hd) the manner of inquiry under sub-section (1) of section 23-I;\n(he) the form in which an appeal may be filed before the Securities Appellate Tribunal under\nsection 23L and the fees payable in respect of such appeal;]\n(i) any other matter which is to be or may be prescribed.\n3[(3) Every rule made under this Act shall be laid, as soon as may be after it is made, before each House\nof Parliament, while it is in session, for a total period of thirty days which may be comprised in one session\nor in two or more successive sessions, and if, before the expiry of the session immediately following the\nsession or the successive sessions aforesaid, both Houses agree in making any modification in the rule or\nboth Houses agree that the rule should not be made, the rule shall thereafter have effe ct only in such\nmodified form or be of no effect, as the case may be; so, however, that any such modification or annulment\nshall be without prejudice to the validity of anything previously done under that rule.]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "30A", "section_title": "Special provisions related to commodity derivatives.", "text": "4[30A. Special provisions related to commodity derivatives.—(1) Nothing contained in this Act shall\napply to non-transferable specific delivery contracts:\nProvided that no person shall organise or assist in organising or be a member of any association in any\narea to which the provisions of section 13 have been made applicable (other than a stock exchange) which\nprovides facilities for the performance of any non-transferable specific delivery contract by any party\nthereto without having to make or receive actual delivery to or from the other party to the contract or to or\nfrom any other party named in the contract.\n\n(2) Where in respect of any area, the provisions of section 13 have been made applicable in relation to\ncommodity derivatives for the sale or purchase of any goods or class of goods, the Central Government\nmay, by notification, declare that in the said area or any part thereof as may be specified in the notification\nall or any of the provisions of this Act shall not apply to transferable specific delivery contracts for the sale\nor purchase of the said goods or class of goods either generally, or to any class of such contracts in\nparticular.\n(3) Notwithstanding anything contained in sub-section (1), if the Central Government is of the opinion\nthat in the interest of the trade or in the public interest it is expedient to regulate and control non-transferable\nspecific delivery contracts in any area, it may, by notification in the Official Gazette, declare that all or any\nof the provisions of this Act shall apply to such class or classes of non -transferable specific delivery\ncontracts in such area in respect of such goods or class of goods as may be specified in the notification, and\nmay also specify t he manner in which and the extent to which all or any of the said provisions shall so\napply.]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "30B", "section_title": "Special provisions related to pooled investment vehicle.", "text": "1[30B. Special provisions related to pooled investment vehicle .—(1) Notwithstanding anything\ncontained in the Indian Trust Act, 1882 (2 of 1882) or in any other law for the time being in force or in any\njudgment, decree or order of any Court, Tribunal or any other authority, a pooled investment vehicle,\nwhether constituted as a trust or otherwise, and registered with the Securities and Exchange Board of India\nshall be eligible to borrow and issue debt securities in such manner and to such extent as may be specified\nunder the regulations made by Securities and Exchange Board of India in this behalf.\n(2) Every pooled investment vehicle referred to in sub-section (1) shall, subject to the provisions of the\ntrust deed, be permitted to provide security interest to lenders in terms of the facility documents entered\ninto by such pooled investment vehicle.\n(3) Where any pooled investment vehicle referred to in sub -section ( 1) defaults in repayment of\nprincipal amount or payment of interest or any such amount due to the lender, the lender shall recover the\ndefaulted amount and enforce security interest, if any, against the trust assets, by initiating proceedings\nagainst the tr ustee acting on behalf of such pooled investment vehicle in accordance with the terms and\nconditions specified in the facility documents:\nProvided that on initiation of the proceedings against the trust assets, the trustee shall not be personally\nliable and his assets shall not be utilised towards recovery of such debt.\n(4) The trust assets, which remain after recovery of defaulted amount, shall be remitted to the unit\nholders on proportionate basis.]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "31", "section_title": "Power of Securities and Exchange Board of India to make regulations.", "text": "2[31. Power of Securities and Exchange Board of India to make regulations. —(1) Without\nprejudice to the provisions contained in section 30 of the Securities and Exchange Board of India Act, 1992\n(15 of 1992), the Securities and Exchange Board of India, may, by notification in the Official Gazette, make\nregulations consistent with the provisions of this Act and the rules made thereunder to carry out the purposes\nof this Act.\n3[(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may\nprovide for all or any of the following matters, namely:—\n(a) the manner, in wh ich at least fifty -one per cent. of equity share capital of a recognised stock\nexchange is held within twelve months from the date of publication of the order under sub-section (7)\nof section 4B by the public other than the shareholders having trading rights under sub -section (8) of\nthat section;\n(b) the eligibility criteria and other requirements under section 17A.]\n4[(c) the terms determined by the Board for settlement of proceedings under sub -section (2) of\nsection 23JA;\n\n(d) any other matter which is required to be, or may be, specified by regulations or in respect of\nwhich provision is to be made by regulations.]\n(3) Every regulation made under this Act shall be laid, as soon as may be after it is made, before each\nHouse of Parliament, while it is in session for a total period of thirty days which may be comprised in one\nsession or in two or more successive sessions, and if, before the expiry of the session immediately following\nthe session or the successive sessions aforesaid, both Houses agree in making any modification in the\nregulation or both Houses agree that the regulation should not be made, the regulation shall thereafter have\neffect only in such modified form or be of no effect, as the case may be; so, however, that any such\nmodification or annulment shall be without prejudice to the validity of anything previously done under that\nregulation.]" }, { "act_code": "SCRA", "chapter_number": "VI", "chapter_title": "MISCELLANEOUS", "section_number": "32", "section_title": "Validation of certain acts.", "text": "1[32. Validation of certain Acts.—Any act or thing done or purporting to have been done under the\nprincipal Act, in respect of settlement of administrative and civil proceedings, shall, for all purposes, be\ndeemed to be valid and effective as if the amendments made to the principal Act had been in force at all\nmaterial times.]\n\nSTATEMENT OF OBJECTS AND REASONS\n“The object of this Bill is to provide for the regulation of stock exchanges and of transactions\nin securities dealt in on them with a view to preventing undesirable speculation in them. The Bill\nalso seeks to regulate the buying and selling of securities o utside the limits of stock exchanges,\nthrough the licensing of security dealers.\n2. The postwar boom in the stock exchanges between 1945 and 1946 and its aftermath\nemphasised the urgency of stock exchange reform on an all -India basis. Accordingly, the\nGovernment of India asked the then Economic Adviser to the Ministry of Finance to und ertake a\ncomprehensive study on the subject in 1948. Later in the year, an official Committee consisting of\nrepresentatives of the Ministries of Finance and Law, the Reserve Bank of India and the\nGovernment of Bombay was appointed to consider the recommend ations contained in this report\nand to submit detailed proposals for legislation. The report of this Committee indicated the broad\nlines on which such legislation should be framed, while another Informal Committee went into the\ndetails of these proposals a nd prepared a draft Bill for the consideration of Government. As the\nrepresentatives of the business community and stock exchanges were not associated with either\nthe official Committee or the Informal Committee the Government of India considered it\nnecessary, at this stage, to appoint another Committee with a predominantly non -official\nmembership, under , the Chairmanship of Shri A. D. Gorwala. The terms of reference of this\nCommittee were—\n(i) to consider the draft proposals of Government on the subject of Stock Exchange\nregulation;\n(ii) to submit a revised draft Bill; and\n(iii) to make any other recommendations on the subject.\nThis Committee submitted its report in August, 1951 and enclosed. with it a revised draft Bill.\nThe report and the draft Bill prepared by this Committee were circulated to all principal stock\nexchanges in this country, chambers of commerce and other intere sted associations and\nindividuals. The comments from all these bodies and individuals were received in course of 1952\nand were afterwards studied and analysed in this Department. The present Bill is based on the\nresults of this study and analysis.\n3. The Bill, as now drafted, broadly follows the recommendations contained in the report of the\nGorwala Committee. The scheme of regulation contemplated in the Bill provides for (a) the prior\nrecognition of the stock exchanges, subject to the fulfillment by them of certain conditions relating\nto their membership and their rules and bye -laws (Clauses 3, 4 and 5); and (b) a general control\nover their trading methods and practices, to be exercised through the powers proposed to be\nconferred on the Central Government to approve of their rules, regulations , and bye-laws and to\nmake or amend them ( Clauses 8, 9 and 10). Powers are taken in clauses 11 and 12 to deal with\nabnormal situations or emergencies, which may gravely affect the working of the stock exchanges\nand call for urgent and drastic action by the Central Government.\nThe Central Government are also empowered to call for such information as they may require\nin respect of the affairs of a stock exchange or of any of its members and also to direct\ninvestigations to be made into the affairs of a stock exchange, if they con sider that it is in the\ninterest of trade or in the public interest to do so (clause 6).\nClauses 13 and 14 of the Bill impose certain restrictions on transactions in securities carried\non in or outside the recognised stock exchanges, while cl . 19 specifically prohibits dealing in\noptions in securities. Power is also taken in cl . 17 to prohibit transactions in specified securities,\n\nafter consultation with the exchanges concerned, In order to prevent undesirable speculation in\nthem.\nIn order to regulate the buying and selling of securities outside the recognised stock exchanges,\nthe Bill provides for the licensing of all dealers in securities who are not members of a recognised\nstock exchange or are otherwise exempted from the licensi ng requirements , (clause 18). The\nprovisions of the Bill on this subject broadly follow the pattern of control underlying the\nPrevention of Fraud (investments) Act in the U.K. which was passed in 1939, and are intended to\nprotect small and ill-informed investors against unscrupulous share brokers and dealers.\n\nNEW DELHI: C.D. DESHMUKH.\nThe 22nd December, 1954." } ] }