Securities Contracts (Regulation) Act 1956 Quiz and Flashcards

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Questions and Answers

What is the primary purpose of the Securities Contracts (Regulation) Act, 1956?

To establish a mechanism for the recovery of amounts realised by way of penalties

To provide a framework for the settlement of administrative and civil proceedings

To delegate powers to the Securities and Exchange Board of India

To regulate the business of dealing in securities and prevent undesirable transactions (correct)

Under which section of the Act can the Securities Appellate Tribunal hear appeals?

Section 23L

Section 23M

Section 23L

Section 23JB (correct)

What is the purpose of Section 23K of the Act?

To provide a framework for the composition of certain offences

To credit sums realised by way of penalties to the Consolidated Fund of India (correct)

To establish a mechanism for the recovery of amounts realised by way of penalties

To settle administrative and civil proceedings

What is the purpose of Section 23N of the Act?

To grant immunity to those who disclose violations, fraud, or malpractices Signup and view all the answers

Under which section of the Act can the Securities and Exchange Board of India make regulations?

Section 31 Signup and view all the answers

What is the purpose of Section 28 of the Act?

To exempt certain cases from the application of the Act Signup and view all the answers

Under which section of the Act can the Central Government delegate powers to the Securities and Exchange Board of India?

Section 29A Signup and view all the answers

What is the purpose of Section 26A of the Act?

To establish Special Courts for the trial of certain offences Signup and view all the answers

What is the maximum time period for the Central Government to supersede the governing body of a recognised stock exchange?

7 days Signup and view all the answers

What is the purpose of Section 6 of the Securities Contracts (Regulation) Act, 1956?

To call for periodical returns or direct inquiries to be made Signup and view all the answers

What is the provision that deals with the power of the Central Government to issue directions to stock exchanges?

Section 12A Signup and view all the answers

What is the purpose of Section 7 of the Securities Contracts (Regulation) Act, 1956?

To furnish annual reports to the Central Government by stock exchanges Signup and view all the answers

What is the provision that deals with the power of the recognised stock exchange to make rules restricting voting rights?

Section 7A Signup and view all the answers

What is the purpose of Section 4A of the Securities Contracts (Regulation) Act, 1956?

Corporatisation and demutualisation of stock exchanges Signup and view all the answers

What is the provision that deals with the power of the Central Government to suspend the business of recognised stock exchanges?

Section 12 Signup and view all the answers

What is the purpose of Section 3 of the Securities Contracts (Regulation) Act, 1956?

Application for recognition of stock exchanges Signup and view all the answers

What is the purpose of a Government security as per the Securities Contracts (Regulation) Act, 1956?

To raise a public loan Signup and view all the answers

What is meant by 'demutualisation' under the Securities Contracts (Regulation) Act, 1956?

The segregation of ownership and management from the trading rights of members of a recognised stock exchange Signup and view all the answers

What is included in the definition of a 'contract' under the Securities Contracts (Regulation) Act, 1956?

Contracts for or relating to the purchase or sale of securities Signup and view all the answers

What is meant by 'corporatisation' under the Securities Contracts (Regulation) Act, 1956?

The succession of a recognised stock exchange by another stock exchange Signup and view all the answers

What is a 'commodity derivative' under the Securities Contracts (Regulation) Act, 1956?

A contract for the delivery of goods as notified by the Central Government Signup and view all the answers

What does 'goods' mean under the Securities Contracts (Regulation) Act, 1956?

Every kind of movable property excluding actionable claims, money and securities Signup and view all the answers

When does the Securities Contracts (Regulation) Act, 1956 come into force?

On a date notified by the Central Government in the Official Gazette Signup and view all the answers

What is a 'derivative' under the Securities Contracts (Regulation) Act, 1956?

All of the above Signup and view all the answers

Study Notes

The Securities Contracts (Regulation) Act, 1956

Preliminary

The Securities Contracts (Regulation) Act, 1956 is an Act to prevent undesirable transactions in securities by regulating the business of dealing therein.
The Act extends to the whole of India and came into force on a date appointed by the Central Government.
The Act defines various terms, including "contract", "corporatisation", "demutualisation", "derivative", "Government security", "goods", and "commodity derivative".

Definitions

A "contract" refers to a contract for or relating to the purchase or sale of securities.
"Corporatisation" means the succession of a recognised stock exchange by another stock exchange, being a company incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities.
"Demutualisation" refers to the segregation of ownership and management from the trading rights of the members of a recognised stock exchange in accordance with a scheme approved by the Securities and Exchange Board of India.
A "derivative" includes a security derived from a debt instrument, share, loan, contract for differences, or any other form of security.
A "Government security" means a security created and issued by the Central Government or a State Government for the purpose of raising a public loan.
"Goods" means every kind of movable property other than actionable claims, money, and securities.
A "commodity derivative" refers to a contract for the delivery of notified goods, which is not a ready delivery contract.

Arrangement of Sections

The Act consists of 32 sections, divided into three parts: Preliminary, Recognised Stock Exchange, and Miscellaneous.
The sections deal with topics such as application for recognition of stock exchanges, grant of recognition, withdrawal of recognition, powers of Central Government, and powers of recognised stock exchanges.
The Act also provides for the establishment of Special Courts, appeal and revision, and validation of certain acts.

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Description

This quiz is based on the Securities Contracts (Regulation) Act, 1956, which deals with the regulation of securities contracts in India. It covers the preliminary sections, definitions, and interpretation of key terms.

Securities Contracts Regulation Act, 1956

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