The Securities Contracts (Regulation) Act, 1956
The Securities Contracts (Regulation) Act, 1956
INTRODUCTION
Stock market plays a significant role in development of the economy Stock market facilities mobilizations of funds from small savings of investors and channelize these resources into various departments needs of various sectors of the economy Thus stock market facilities transactions in securities . In order to prevent undesirable transaction in securities ,promote healthy stock market . The Securities Contracts (Regulation ) Act ,1956 was enacted by the Parliament Vide Act No.42 .This act is applicable to whole India .
Corporatisation
The Corporatisation intends to make a stock exchange a corporate entity limited by shares. In the new legisatation under section 2 (aa) the term corporatisation has been defined as the sucession of a recognised stock exchange being a body of individual or a society registered under the Societies Registration Act 1860 ,by another stock exchange being acompany incoprporated for the purpose of assisting ,regulating or controlling the business of buying ,selling or dealing in securities carried on by such individual or society
Demutualisation
Demutualisation is the process of seperating the ownership ,trading and managemnt of stock exchange .This process shall prevent conflict of interest , which may arise when stockbroker involved in the managemnt of stock exchange.It is defined under section 2(ab )as the segregation of ownership and management from the trading rights of the members of a recognized stock exchange in accordance with the scheme approved by the Securities and Exchange Board Of India .
12) Stock exchanges are allowed to make fresh issue of the equity share to the public or subject to SEBI Regulations in any other manner can increase its equity share capital to fulfill the Norm above 13) New scheme for Penalty .