SECURITIES CONTRACTS (REGULATION) ACT, 1956

[42 OF 1956]

SECTIONS

PRELIMINARY

1. Short title, extent and commencement  

2. Definitions  

RECOGNISED STOCK EXCHANGES

3. Application for recognition of stock exchanges  

4. Grant of recognition to stock exchanges.  

4A. Corporatisation and demutualisation of stock exchanges

4B. Procedure for corporatisation and demutualisation

5. Withdrawal of recognition  

6. Power of Central Government to call for periodical returns or direct inquiries to be made  7. Annual reports to be furnished to Central Government by stock exchanges  7A. Power of recognised stock exchange to make rules restricting voting rights, etc.

8. Power of Central Government to direct rules to be made or to make rules  8A. Clearing corporation

9. Power of recognised stock exchanges to make bye-laws  

10. Power of Securities and Exchange Board of India to make or amend bye-laws of  recognised stock exchanges  

11. Power of Central Government to supersede governing body of a recognised stock  exchange  

12. Power to suspend business of recognised stock exchanges.  

12A. Power to issue directions

13. Contracts in notified areas illegal in certain circumstances  

13A. Additional trading floor

14. Contracts in notified areas to be void in certain circumstances  

15. Members may not act as principals in certain circumstances  

16. Power to prohibit contracts in certain cases  

17. Licensing of dealers in securities in certain areas

17A. Public issue and listing of securities referred to in sub-clause (ie) of clause (h) of section 2

18. Exclusion of spot delivery contracts from sections 13, 14, 15 and 17  

18A. Contracts in derivative

19. Stock exchanges other than recognised stock exchanges prohibited  

20. Prohibition of options in securities  

21. Conditions for listing  

21A. Delisting of securities

22. Right of appeal against refusal of stock exchanges to list securities of public companies  

22A. Right of appeal to Securities Appellate Tribunal against refusal of stock exchange to list securities of  public companies

22B. Procedure and powers of Securities Appellate Tribunal

22C. Right to legal representation

22D. Limitation

22E. Civil court not to have jurisdiction

22F. Appeal to Supreme Court

PENALTIES AND PROCEDURE

23. Penalties  

23A. Penalty for failure to furnish information, return, etc.

23B. Penalty for failure by any person to enter into an agreement with clients

23C. Penalty for failure to redress investors’ grievances

23D. Penalty for failure to segregate securities or moneys of client or clients

23E. Penalty for failure to comply with provision of listing conditions or delisting conditions or grounds

23F. Penalty for excess dematerialisation or delivery of unlisted securities

23G. Penalty for failure to furnish periodical returns, etc.

23GA Penalty for failure to conduct business in accordance with rules, etc.

23H. Penalty for contravention where no separate penalty has been provided

23-I. Power to adjudicate

23J. Factors to be taken into account while adjudging quantum of penalty

23JA. Settlement of administrative and civil proceedings

23JB. Recovery of amounts

23JC Continuance of proceedings

23K. Crediting sums realised by way of penalties to Consolidated Fund of India

23L. Appeal to Securities Appellate Tribunal

23M. Offences

23N. Composition of certain offences

23-O. Power to grant immunity

24. Contravention by companies

25. Certain offences to be cognizable  

26. Cognizance of offences by courts  

26A. Establishment of Special Courts

26B. Offences triable by Special Courts

26C. Appeal and revision

26D. Application of Code to proceedings before Special Court 26E. Transitional Provisions

MISCELLANEOUS

27. Title to dividends  

27A. Right to receive income from collective investment scheme 27B. Right to receive income from mutual fund

28. Act not to apply in certain cases  

29. Protection of action taken in good faith  

29A. Power to delegate

29B. Powers of Board not to apply to International Financial Services Centre 30. Power to make rules  

30A. Special Provisions related to commodity derivatives 30B. Special provisions related to pooled investment vehicle 31. Power of Securities and Exchange Board of India to make regulations  32. Validation of certain acts

SECURITIES CONTRACTS (REGULATION) ACT, 1956

[42 OF 1956]

[4th September, 1956]

An Act to prevent undesirable transactions in securities by regulating the business of  dealing therein, 1[***] by providing for certain other matters connected therewith.

BE it enacted by Parliament in the Seventh Year of the Republic of India as follows:

PRELIMINARY

Short title, extent and commencement.

1. (1) This Act may be called the Securities Contracts (Regulation) Act, 1956. (2) It extends to the whole of India.  

(3) It shall come into force on such date2as the Central Government may, by notification in the  Official Gazette, appoint.  

Definitions.

2. In this Act, unless the context otherwise requires,—

(a) “contract” means a contract for or relating to the purchase or sale of securities;  

3[(aa) “corporatisation” means the succession of a recognised stock exchange, being a body of  individuals or a society registered under the Societies Registration Act, 1860 (21 of 1860),  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 carried on  by such individuals or society;

(ab) “demutualisation” means 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;]

4[5[(ac)] “derivative”— includes

(A) a security derived from a debt instrument, share, loan, whether secured or unsecured,  risk instrument or contract for differences or any other form of security;

(B) a contract which derives its value from the prices, or index of prices, of underlying  securities;]

6[(C) commodity derivatives; and

(D) such other instruments as may be declared by the Central Government to be  derivatives;]7 

1 Words “by prohibiting options and” omitted by the Securities Laws (Amendment) Act, 1995, w.e.f. 25-01-1995. 2 20-2-1957 vide SRO 528, dated 16-02-1957, published in the Gazette of India, Extra., Pt. II, Sec. 3, p. 549, dated 16- 02-1957.

3Inserted by the Securities Laws (Amendment) Act, 2004, Sec. 2, w.e.f. 12-10-2004.  

4Inserted by the Securities Laws (Amendment) Act, 1999, Sec. 2, w.e.f. 22-2-2000.  

5 Clause (aa) renumbered as clause (ac) by the Securities Laws (Amendment) Act, 2004, Sec. 2, w.r.e.f. 12 10-2004.

6Inserted by Part II of Chapter VIII of the Finance Act 2015, w.e.f. 28.09.2015 vide Gazette Notification F. No.  1/9/SM/2015, Extraordinary, Pt. II, Sec. 3, Sub-section (ii) dated 28.08.2015.

7“A contract for the purchase or sale of a right to buy or sell or a right to buy and sell in future, such  underlying goods, as notified vide number S.O. 3068(E), dated the 27th September, 2016” was declared as a  ‘derivative’ for the purposes of this Act vide Gazette Notification No. S.O. 3743 (E) F. No. 8/9/2018-CD, dated  October 18, 2019. This notification was superseded by Gazette Notification No. S.O. 1003 (E) F. No. 17/2/2016-CD  (part-II) dated March 1, 2024, which provides that “a contract for the purchase or sale of a right to buy or sell, or a  right to buy and sell in future, such underlying goods, as notified under clause (bc) of section 2 of the Securities  Contracts (Regulation) Act, 1956 (42 of 1956), as a derivative for the purposes of the said Act”. Vide Gazette

(b) “Government security” means a security created and issued, whether before or after the  commencement of this Act, by the Central Government or a State Government for the  purpose of raising a public loan and having one of the forms specified in clause (2) of section  2 of the Public Debt Act, 1944 (18 of 1944);

8[(bb) "goods" mean every kind of movable property other than actionable claims, money and  securities;

(bc) "commodity derivative" means a contract —

(i) for the delivery of such goods, as may be notified by the Central Government  in the Official Gazette, and which is not a ready delivery contract; or  

(ii) for differences, which derives its value from prices or indices of prices of  such underlying goods or activities, services, rights, interests and events, as  may be notified by the Central Government, in consultation with the Board,  but does not include securities as referred to in sub-clauses (A) and (B) of  clause (ac);]  

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

9[(ca) "non-transferable specific delivery contract" means a specific delivery contract, the rights  or liabilities under which or under any delivery order, railway receipt, bill of lading,  warehouse receipt or any other documents of title relating thereto are not transferable; ]

(d) “option in securities” means a contract for the purchase or sale of a right to buy or sell, or a  right to buy and sell, securities in future, and includes a teji, a mandi, a teji mandi, a galli,  a put, a call or a put and call in securities;

10[(da) “pooled investment vehicle” means a fund established in India in the form of a trust  or otherwise, such as mutual fund, alternative investment fund, collective investment  scheme or a business trust as defined in sub-section (13A) of section 2 of the Income tax Act, 1961 and registered with the Securities and Exchange Board of India, or such other  fund, which raises or collects monies from investors and invests such funds in accordance  with such regulations as may be made by the Securities and Exchange Board of India in this  behalf;]

(e) “prescribed” means prescribed by rules made under this Act;  

11[(ea) "ready delivery contract" means a contract which provides for the delivery of goods and  the payment of a price therefor, either immediately, or within such period not exceeding  eleven days after the date of the contract and subject to such conditions as the Central  Government may, by notification in the Official Gazette, specify in respect of any goods,  the period under such contract not being capable of extension by the mutual consent of the  parties thereto or otherwise:

Provided that where any such contract is performed either wholly or in part:

(I) by realisation of any sum of money being the difference between the contract rate  and the settlement rate or clearing rate or the rate of any offsetting contract; or  

(II) by any other means whatsoever, and as a result of which the actual tendering of the    

Notification No. S.O. 1002 (E) dated March 1, 2024, the notification dated September 27, 2016 was superseded and  a revised list of goods was notified for the purposes of clause (bc) of section 2 of this Act. 8Inserted by Part II of Chapter VIII of the Finance Act 2015, w.e.f. 28.09.2015 vide Gazette Notification F. No.  1/9/SM/2015, Extraordinary, Pt. II, Sec. 3, Sub-section (ii) dated 28.08.2015.

9Inserted by Part II of Chapter VIII of the Finance Act 2015, w.e.f. 28.09.2015 vide Gazette Notification F. No.  1/9/SM/2015, Extraordinary, Pt. II, Sec. 3, Sub-section (ii) dated 28.08.2015.

10 Inserted by the Finance Act, 2021 (13 of 2021) w.e.f. April 1, 2021.  

11 Inserted by Part II of Chapter VIII of the Finance Act 2015, w.e.f. 28.09.2015 vide Gazette Notification F. No.  1/9/SM/2015, Extraordinary, Pt. II, Sec. 3, Sub-section (ii) dated 28.08.2015.

goods covered by the contract or payment of the full price therefor is dispensed  with, then such contract shall not be deemed to be a ready delivery contract; ]  

(f) “recognised stock exchange” means a stock exchange which is for the time being  recognised by the Central Government under section 4;

(g) “rules”, with reference to the rules relating in general to the constitution and management  of a stock exchange, includes, in the case of a stock exchange which is an incorporated  association, its memorandum and articles of association;

12[(ga) “scheme” means a scheme for corporatisation or demutualisation of a recognised stock  exchange which may provide for—

(i) the issue of shares for a lawful consideration and provision of trading rights in lieu of  membership cards of members of a recognised stock exchange;

(ii) the restrictions on voting rights;

(iii) the transfer of property, business, assets, rights, liabilities, recognitions, contracts of  the recognised stock exchange, legal proceedings by, or against, the recognised stock  exchange, whether in the name of the recognised stock exchange or any trustee or  otherwise and any permission given to, or by, the recognised stock exchange;

(iv) the transfer of employees of a recognised stock exchange to another recognised stock  exchange;

(v) any other matter required for the purpose of, or in connection with, the corporatisation  or demutualisation, as the case may be, of the recognised stock exchange;] 13[14[(gb)] “Securities Appellate Tribunal” means a Securities Appellate Tribunal established  under sub-section (1) of section 15K of the Securities and Exchange Board of India Act,  1992 (15 of 1992);]

(h) “securities”— include

(i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable  securities of a like nature in or of any incorporated company 15[or a pooled  investment vehicle or other body corporate];

16[(ia) derivative;

(ib) units or any other instrument issued by any collective investment scheme to the  investors in such schemes;]

17[(ic) security receipt as defined in clause (zg) of section 2 of the Securitisation and  Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;]

18[(id) units or any other such instrument issued to the investors under any mutual  fund scheme;]

19[Explanation.—For the removal of doubts, it is hereby declared that  

12 Inserted by the Securities Laws (Amendment) Act, 2004, Sec. 2, w.r.e.f. 12-10-2004.

13 Inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 2, w.e.f. 16-12-1999. 14 Clause (ga) renumbered as clause (gb) by the Securities Laws (Amendment) Act, 2004, Sec 2, w.r.e.f. 12-10-2004. 15 Substituted for "or other body corporate " by the Finance Act, 2021 (13 of 2021) w.e.f. April 1, 2021. 16 Inserted by the Securities Laws (Amendment) Act, 1999, Sec. 2, w.e.f. 22-2-2000.

17 Inserted by the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,  2002, Sec. 41 and Schedule, w.r.e.f. 21-6-2002.

18 Inserted by the Securities Laws (Amendment) Act, 2004, Sec. 2, w.e.f. 12-10-2004.

19 Inserted by the Securities and Insurance Laws (Amendment and Validation) Act, 2010, Sec 4, w.r.e.f. 09-04-2010.  Chapter VI of the Securities and Insurance Laws (Amendment and Validation) Act, 2010, read as under :  "CHAPTER VI

MISCELLANEOUS

6. Validation.—Notwithstanding anything contained in any judgment, decree or order of any Court, Tribunal or  other authority, the provisions of section 2 of the Insurance Act, 1938 (4 of 1938) or section 2 of the Securities

"securities" shall not include any unit linked insurance policy or scrips or any  such instrument or unit, by whatever name called, which provides a combined  benefit risk on the life of the persons and investment by such persons and issued  by an insurer referred to in clause (9) of section 2 of the Insurance Act, 1938 (4  of 1938);]

20[(ida) units or any other instrument issued by any pooled investment vehicle;] 21[(ie) any certificate or instrument (by whatever name called), issued to an investor  by any issuer being a special purpose distinct entity which possesses any debt  or receivable, including mortgage debt, assigned to such entity, and  acknowledging beneficial interest of such investor in such debt or receivable,  including mortgage debt, as the case may be;]

22[(ii) Government securities;

(iia) such other instruments as may be declared23 by the Central

Government to be securities; and]

(iii) rights or interest in securities;

24[(ha) "specific delivery contract" means a commodity derivative which provides for the actual  delivery of specific qualities or types of goods during a specified future period at a price  fixed thereby or to be fixed in the manner thereby agreed and in which the names of both  the buyer and the seller are mentioned;]

25[(i) “spot delivery contract” means a contract which provides for,-

Contracts (Regulation) Act, 1956 (42 of 1956) or section 12 of the Securities and Exchange Board of India Act, 1992  (15 of 1992), as amended by this Act, shall have and shall be deemed to always have effect for all purposes as if the  provisions of the said Acts, as amended by this Act, had been in force at all material times and accordingly, any unit  linked insurance policy or scrips or any such instrument or unit, by whatever name called, issued or purported to  have been issued at any time before the 9th day of April, 2010, shall be deemed and always deemed to have been  validly issued and shall not be called in question in any court of law or other authority solely on the ground that it  was issued without a certificate of registration under any law for the time being in force or without following any  procedure under any law for the time being in force, by an insurer or any other person.  

7. Repeal and savings.—(1) The Securities and Insurance Laws (Amendment and Validation) Ordinance, 2010 (Ord.  3 of 2010) is hereby repealed.  

(2) Notwithstanding such repeal, anything done or any action taken under the Reserve Bank of India Act, 1934 (2 of  1934) or the Insurance Act, 1938 (4 of 1938) or the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the  Securities and Exchange Board of India Act, 1992 (15 of 1992), as amended by the said Ordinance, shall be deemed  to have been done or taken under the corresponding provisions of those Acts, as amended by this Act."  

20 Inserted by the Finance Act, 2021 (13 of 2021) w.e.f. April 1, 2021.

21 Inserted by the Securities Contracts (Regulation) Amendment Act, 2007, Sec 2, w.e.f. 28-5-2007. 22 Substituted by Securities and Exchange Board of India Act, 1992, Sec 33 and Schedule, Pt II, for sub-clause (ii),  w.r.e.f. 30-01-1992.

23 "Onshore Rupee Bonds" issued by multilateral institutions like the Asian Development Bank and the International  Finance Corporation declared as 'securities' vide Gazette Notification No. S. O. 1978 (E) F. No. 1/45/EM/2013, dated  01.08.2014.

“zero coupon zero principal instruments” declared as ‘securities’ vide Gazette Notification No. S.O.3210 (E) F. No.  1/16/SM/2021, dated July 15, 2022. The notification provides that an Explanation that “For the purpose of this  notification, “zero coupon zero principal instrument” means an instrument issued by a Not for Profit Organisation  which shall be registered with Social Stock Exchange segment of a recognised Stock Exchange in accordance with the  regulations made by the Securities and Exchange Board of India”.

“Electronic Gold Receipt” declared as ‘securities’ vide Gazette Notification No. S.O. 5401(E) F. No. 1/16/SM/2021,  dated December 24, 2021. The notification provides that an Explanation that ““Electronic Gold Receipt” means an  electronic receipt issued on the basis of deposit of underlying physical gold in accordance with the regulations  made by the Securities and Exchange Board of India under section 31 of the said Act”.

24 Inserted by Part II of Chapter VIII of the Finance Act 2015, w.e.f. 28.09.2015 vide Gazette Notification F. No.  1/9/SM/2015, Extraordinary, Pt. II, Sec. 3, Sub-section (ii) dated 28.08.2015.

25 Substituted by the Depositories Act, 1996, Sec 30 and Schedule, Pt. III, w.r.e.f. 20-09-1995. Prior to its substitution,  clause (i) read as under :

(a) actual delivery of securities and the payment of a price therefor either on the same day  as the date of the contract or on the next day, the actual period taken for the despatch  of the securities or the remittance of money therefor through the post being excluded  from the computation of the period aforesaid if the parties to the contract do not reside  in the same town or locality;

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

26[(j) “stock exchange” means -

(a) any body of individuals, whether incorporated or not, constituted before  corporatisation and demutualisation under sections 4A and 4B, or

(b) a body corporate incorporated under the Companies Act, 1956 (1 of 1956) whether  under a scheme of corporatisation and demutualisation or otherwise,

for the purpose of assisting, regulating or controlling the business of buying, selling or  dealing in securities.]

27[(k) "transferable specific delivery contract" means a specific delivery contract which is not a  non-transferable specific delivery contract and which is subject to such conditions relating  to its transferability as the Central Government may by notification in the Official Gazette,  specify in this behalf. ]

28[Interpretation of certain words and expressions.

2A. Words and expressions used herein and not defined in this Act but defined in the Companies  Act, 1956 (1 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or  the Depositories Act, 1996 (22 of 1996) shall have the same meanings respectively assigned to  them in those Acts.]

RECOGNISED STOCK EXCHANGES

Application for recognition of stock exchanges.

3. (1) Any stock exchange, which is desirous of being recognised for the purposes of this Act, may  make an application in the prescribed manner to the Central Government.29 (2) Every application under sub-section (1) shall contain such particulars as may be prescribed,  and shall be accompanied by a copy of the bye-laws of the stock exchange for the regulation and  control of contracts and also a copy of the rules relating in general to the constitution of the stock  exchange and in particular, to—

(a) the governing body of such stock exchange, its constitution and powers of management and  the manner in which its business is to be transacted;

‘(i) “spot delivery contract” means a contract which provides for the actual delivery of securities and the payment  of a price therefor either on the same day as the date of the contract or on the next day, the actual period taken for  the despatch of the securities or the remittance of money therefor through the post being excluded from the  computation of the period aforesaid if the parties to the contract do not reside in the same town or locality;’

26 Substituted by the Securities Laws (Amendment) Act, 2004, Sec 2, w.r.e.f. 12-10-2004. Prior to its  substitution, clause (j) read as under:—

‘(j) “stock exchange” means any body of individuals, whether incorporated or not, constituted for the purpose of  assisting, regulating or controlling the business of buying, selling or dealing in securities.’ 27 Inserted by Part II of Chapter VIII of the Finance Act 2015, w.e.f. 28.09.2015 vide Gazette Notification F. No.  1/9/SM/2015, Extraordinary, Pt. II, Sec. 3, Sub-section (ii) dated 28.08.2015.

28 Inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 3, w.e.f. 16-12-1999. 29 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

(b) the powers and duties of the office bearers of the stock exchange;

(c) the admission into the stock exchange of various classes of members, the qualifications for  membership, and the exclusion, suspension, expulsion and re-admission of members  therefrom or thereinto;

(d) the procedure for the registration of partnerships as members of the stock exchange in cases  where the rules provide for such membership; and the nomination and appointment of  authorised representatives and clerks.

Grant of recognition to stock exchanges.

4. (1) If the Central Government30 is satisfied, after making such inquiry as may be necessary in  this behalf and after obtaining such further information, if any, as it may require,— (a) that the rules and bye-laws of a stock exchange applying for registration are in conformity  with such conditions as may be prescribed with a view to ensure fair dealing and to protect  investors;

(b) that the stock exchange is willing to comply with any other conditions (including conditions  as to the number of members) which the Central Government, after consultation with the  governing body of the stock exchange and having regard to the area served by the stock  exchange and its standing and the nature of the securities dealt with by it, may impose for  the purpose of carrying out the objects of this Act; and

(c) that it would be in the interest of the trade and also in the public interest to grant recognition  to the stock exchange;

it may grant recognition to the stock exchange subject to the conditions imposed upon it as  aforesaid and in such form as may be prescribed.

(2) The conditions which the Central Government31 may prescribe under clause (a) of sub-section  (1) for the grant of recognition to the stock exchanges may include, among other matters,  conditions relating to,—

(i) the qualifications for membership of stock exchanges;

(ii) the manner in which contracts shall be entered into and enforced as between members;

(iii) the representation of the Central Government on each of the stock exchange by such number  of persons not exceeding three as the Central Government may nominate in this behalf; and

(iv) the maintenance of accounts of members and their audit by chartered accountants whenever  such audit is required by the Central Government.

(3) Every grant of recognition to a stock exchange under this section shall be published in the  Gazette of India and also in the Official Gazette of the State in which the principal office as of the  stock exchange is situate, and such recognition shall have effect as from the date of its publication  in the Gazette of India.32 

(4) No application for the grant of recognition shall be refused except after giving an  opportunity to the stock exchange concerned to be heard in the matter; and the reasons for such  refusal shall be communicated to the stock exchange in writing.33 

30 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

31 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

32 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

33 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

(5) No rules of a recognised stock exchange relating to any of the matters specified in sub-section  (2) of section 3 shall be amended except with the approval of the Central Government.34 

35[Corporatisation and demutualisation of stock exchanges.

4A. On and from the appointed date, all recognised stock exchanges (if not corporatised and  demutualised before the appointed date) shall be corporatised and demutualised in accordance  with the provisions contained in section 4B :

Provided that the Securities and Exchange Board of India may, if it is satisfied that any recognised  stock exchange was prevented by sufficient cause from being corporatised and demutualised on  or after the appointed date, specify another appointed date in respect of that recognised stock  exchange and such recognised stock exchange may continue as such before such appointed date.

Explanation.— For the purposes of this section, “appointed date” means the date which the  Securities and Exchange Board of India may, by notification in the Official Gazette, appoint and  different appointed dates may be appointed for different recognised stock exchanges.]

36[Procedure for corporatisation and demutualisation.

4B. (1) All recognised stock exchanges referred to in section 4A shall, within such time as may be  specified by the Securities and Exchange Board of India, submit a scheme for corporatisation and  demutualisation for its approval :

Provided that the Securities and Exchange Board of India, may, by notification in the Official  Gazette, specify name of the recognised stock exchange, which had already been corporatised and  demutualised, and such stock exchange shall not be required to submit the scheme under this  section.

(2) On receipt of the scheme referred to in sub-section (1), the Securities and Exchange Board of  India may, after making such enquiry as may be necessary in this behalf and obtaining such further  information, if 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 interest, approve the scheme with or without modification.

(3) No scheme under sub-section (2) shall be approved by the Securities and Exchange Board of  India if the issue of shares for a lawful consideration or provision of trading rights in lieu of  membership card of the members of a recognised stock exchange or payment of dividends to  members have been proposed out of any reserves or assets of that stock exchange.  

(4) Where the scheme is approved under sub-section (2), the scheme so approved shall be  published immediately by—

(a) the Securities and Exchange Board of India in the Official Gazette;

(b) the recognised stock exchange in such two daily newspapers circulating in India, as may be  specified by the Securities and Exchange Board of India,

and upon such publication, notwithstanding anything to the contrary contained in this Act or any  other law for the time being in force or any agreement, award, judgment, decree or other  instrument for the time being in force, the scheme shall have effect and be binding on all persons  and authorities including all members, creditors, depositors and employees of the recognised stock  exchange and on all persons having any contract, right, power, obligation or liability with, against,  over, to, or in connection with, the recognised stock exchange or its members.

34 Powers are exercisable by SEBI also vide S. O. 573 (E), Dated 30-07-1992, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 30-07-1992.

35 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 3, w.r.e.f. 12-10-2004.

36 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 3, w.r.e.f. 12-10-2004.

(5) Where the Securities and Exchange Board of India is satisfied that it would not be in the interest  of the trade and also in the public interest to approve the scheme under sub-section (2), it may, by  an order, reject the scheme and such order of rejection shall be published by it in the Official  Gazette:

Provided that the Securities and Exchange Board of India shall give a reasonable opportunity of  being heard to all the persons concerned and the recognised stock exchange concerned before  passing an order rejecting the scheme.

(6) The Securities and Exchange Board of India may, while approving the scheme under sub section (2), by an order in writing, restrict—

(a) the voting rights of the shareholders who are also stock brokers of the reognised stock  exchange;

(b) the right of shareholders or a stock broker of the recognised stock exchange to appoint  the representatives on the governing board of the stock exchange;

(c) the maximum number of representatives of the stock brokers of the recognised stock  exchange to be appointed on the governing board of the recognised stock exchange,  which shall not exceed one-fourth of the total strength of the governing board.

(7) The order made under sub-section (6) shall be published in the Official Gazette and on the  publication thereof, the order shall, notwithstanding anything to the contrary contained in the  Companies Act, 1956 (1 of 1956), or any other law for the time being in force, have full effect.

(8) Every recognised stock exchange, in respect of which the scheme for corporatisation or  demutualisation has been approved under sub-section (2), shall, either by fresh issue of equity  shares to the public or in any other manner as may be specified by the regulations made by the  Securities and Exchange Board of India37, ensure that at least fifty-one per cent of its equity share  capital is held, within twelve months from the date of publication of the order under sub-section  (7), by the public other than shareholders having trading rights :

Provided that the Securities and Exchange Board of India may, on sufficient cause being shown  to it and in the public interest, extend the said period by another twelve months.]

Withdrawal of recognition.

5. 38[(1)] If the Central Government39 is of opinion that the recognition granted to a stock exchange  under the provisions of this Act should, in the interest of the trade or in the public interest, be  withdrawn, the Central Government may serve on the governing body of the stock exchange a  written notice that the Central Government is considering the withdrawal of the recognition for  the reasons stated in the notice and after giving an opportunity to the governing body to be heard  in the matter, the Central Government may withdraw, by notification in the Official Gazette, the  recognition granted to the stock exchange :

Provided that no such withdrawal shall affect the validity of any contract entered into or made  before the date of the notification, and the Central Government may, after consultation with the  stock exchange, make such provision as it deems fit in the notification of withdrawal or in any  subsequent notification similarly published for the due performance of any contracts outstanding  on that date.

37 See Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012, w.e.f. 20- 06-2012 notified vide Gazette Notification No. LAD-NRO/GN/2012-13/07/13546, Extra., Pt. III, Section 4, dtd 20-06- 2012.

38 Section 5 renumbered as sub-section (1) by the Securities Laws (Amendment) Act, 2004, Sec 4, w.r.e.f. 12-10- 2004.

39 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

40[(2) Where the recognised stock exchange has not been corporatised or demutualised or it fails  to submit the scheme referred to in sub-section (1) of section 4B within the specified time therefor  or the scheme has been rejected by the Securities and Exchange Board of India under sub-section  (5) of section 4B, the recognition granted to such stock exchange under section 4, shall,  notwithstanding anything to the contrary contained in this Act, stand withdrawn and the Central  Government shall publish, by notification in the Official Gazette, such withdrawal of recognition  :

Provided that no such withdrawal shall affect the validity of any contract entered into or made  before the date of the notification, and the Securities and Exchange Board of India may, after  consultation with the stock exchange, make such provisions as it deems fit in the order rejecting  the scheme published in the Official Gazette under sub-section (5) of section 4B.]

Power of Central Government to call for periodical returns or direct inquiries to be made.

6. (1) Every recognised stock exchange shall furnish to the 41[Securities and Exchange Board of  India] such periodical returns relating to its affairs as may be prescribed.

(2) Every recognised stock exchange and every member thereof shall maintain and preserve for  such periods not exceeding five years such books of account, and other documents as the Central  Government, after consultation with the stock exchange concerned, may prescribe in the interest  of the trade or in the public interest, and such books of account, and other documents shall be  subject to inspection at all reasonable times 42[by the Securities and Exchange Board of India].  

(3) Without prejudice to the provisions contained in sub-sections (1) and (2), the 43[Securities  and Exchange Board of India], if it is satisfied that it is in the interest of the trade or in the public  interest so to do, may, by order in writing,—

(a) call upon a recognised stock exchange or any member thereof to furnish in writing such  information or explanation relating to the affairs of the stock exchange or of the member in  relation to the stock exchange as the 44[Securities and Exchange Board of India] may  require; or

(b) appoint one or more persons to make an inquiry in the prescribed manner in relation to the  affairs of the governing body of a stock exchange or the affairs of any of the members of  the stock exchange in relation to the stock exchange and submit a report of the result of such  inquiry to the 45[Securities and Exchange Board of India] within such time as may be  specified in the order or, in the case of an inquiry in relation to the affairs of any of the  members of a stock exchange, direct the governing body to make the inquiry and submit its  

40 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 4, w.r.e.f. 12-10-2004.

41 Substituted for "Central Government" by Securities and Exchange Board of India Act, 1992, Sec 33 and Schedule,  Pt II, w.r.e.f. 30-01-1992.

42 Substituted for "by the Central Government" by Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

43 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

44 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

45 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

report to the 46[Securities and Exchange Board of India].

(4) Where an inquiry in relation to the affairs of a recognised stock exchange or the affairs of any  of its members in relation to the stock exchange has been undertaken under sub-section (3),—

(a) every director, manager, secretary or other officer of such stock exchange; (b) every member  of such stock exchange;

(c) if the member of the stock exchange is a firm, every partner, manager, secretary or other  officer of the firm; and

(d) every other person or body of persons who has had dealings in the course of business with  any of the persons mentioned in clauses (a), (b) and (c), whether directly or indirectly;

shall be bound to produce before the authority making the inquiry all such books of account, and  other documents in his custody or power relating to or having a bearing on the subject-matter of  such inquiry and also to furnish the authorities within such time as may be specified with any such  statement or information relating thereto as may be required of him.

47Annual reports to be furnished to Central Government by stock exchanges. 7. Every recognised stock exchange shall furnish the Central Government with a copy of the  annual report, and such annual report shall contain such particulars as may be prescribed.

48[Power of recognised stock exchange to make rules restricting voting rights, etc. 7A. (1) A recognised stock exchange may make rules or amend any rules made by it to provide  for all or any of the following matters, namely :—

(a) the restriction of voting rights to members only in respect of any matter placed before the  stock exchange at any meeting;

(b) the regulation of voting rights in respect of any matter placed before the stock exchange at  any meeting so that each member may be entitled to have one vote only, irrespective of his  share of the paid-up equity capital of the stock exchange;

(c) the restriction on the right of a member to appoint another person as his proxy to attend and  vote at a meeting of the stock exchange;

(d) such incidental, consequential and supplementary matters as may be necessary to give  effect to any of the matters specified in clauses (a), (b) and (c).

(2) No rules of a recognised stock exchange made or amended in relation to any matter referred to  in clauses (a) to (d) of sub-section (1) shall have effect until they have been approved by the  Central Government49 and published by that Government in the Official Gazette and, in approving  the rules so made or amended, the Central Government may make such modifications therein as  it thinks fit, and on such publication, the rules as approved by the Central Government shall be  deemed to have been validly made, notwithstanding anything to the contrary contained in the  Companies Act, 1956 (1 of 1956).]

Power of Central Government50 to direct rules to be made or to make rules. 8. (1) Where, after consultation with the governing bodies of stock exchanges generally or with    

46 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

47 Powers are exercisable by SEBI also vide S. O. 573 (E), Dated 30-07-1992, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 30-07-1992.

48 Inserted by Securities Contracts (Regulation) Amendment Act, 1959 (Act No. 49 of 1959), Sec 2, w.e.f. 08-12-1959. 49 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

50 Powers are exercisable by SEBI also vide S. O. 573 (E), Dated 30-07-1992, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 30-07-1992.

the governing body of any stock exchange in particular, the Central Government is of opinion that  it is necessary or expedient so to do, it may, by order in writing together with a statement of the  reasons therefor, direct recognised stock exchanges generally or any recognised stock exchange  in particular, as the case may be, to make any rules or to amend any rules already made in respect  of all or any of the matters specified in sub-section (2) of section 3 within a period of 51[two  months] from the date of the order.

(2) If any recognised stock exchange fails or neglects to comply with any order made under sub section (1) within the period specified therein, the Central Government may make the rules for, or  amend the rules made by, the recognised stock exchange, either in the form proposed in the order  or with such modifications thereof as may be agreed to between the stock exchange and the Central  Government.  

(3) Where in pursuance of this section any rules have been made or amended, the rules so made  or amended shall be published in the Gazette of India and also in the Official Gazette or Gazettes  of the State or States in which the principal office or offices of the recognised stock exchange or  exchanges is or are situate, and, on the publication thereof in the Gazette of India, the rules so  made or amended shall, notwithstanding anything to the contrary contained in the Companies Act,  1956 (1 of 1956), or in any other law for the time being in force, have effect as if they had been  made or amended by the recognised stock exchange or stock exchanges, as the case may be.  

52[Clearing corporation.

8A. (1) A recognised stock exchange may, with the prior approval of the Securities and Exchange  Board of India, transfer the duties and functions of a clearing house to a clearing corporation,  being a company incorporated under the Companies Act, 1956 (1 of 1956), for the purpose of—

(a) the periodical settlement of contracts and differences thereunder; (b) the delivery of, and  payment for, securities;

(c) any other matter incidental to, or connected with, such transfer.

(2) Every clearing corporation shall, for the purpose of transfer of the duties and functions of  a clearing house to a clearing corporation referred to in sub-section (1), make bye-laws and submit  the same to the Securities and Exchange Board of India for its approval.  

(3) The Securities and Exchange Board of India may, on being satisfied that it is in the interest of  the trade and also in the public interest to transfer the duties and functions of a clearing house to a  clearing corporation, grant approval to the bye-laws submitted to it under sub-section (2) and  approve the transfer of the duties and functions of a clearing house to a clearing corporation  referred to in sub-section (1).  

(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 corporation referred to in sub-section (1) as they apply in relation to a recognised stock  exchange.]  

Power of recognised stock exchanges to make bye-laws.

9. (1) Any recognised stock exchange may, subject to the previous approval of the53[Securities  and Exchange Board of India], make bye-laws for the regulation and control of contracts.

51 Substituted for “six months” by the Securities Laws (Amendment) Act, 1995, Sec 19, w.e.f. 25-01-1995. 52 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 5, w.r.e.f. 12-10-2004.

53 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

(2) In particular, and without prejudice to the generality of the foregoing power, such bye-laws  may provide for :

(a) the opening and closing of markets and the regulation of the hours of trade;

(b) a clearing house for the periodical settlement of contracts and differences thereunder, the  delivery of and payment for securities, the passing on of delivery orders and the regulation  and maintenance of such clearing house;

(c) the submission to the 54[Securities and Exchange Board of India] by the clearing house as  soon as may be after each periodical settlement of all or any of the following particulars as  the 55[Securities and Exchange Board of India] may, from time to time, require, namely:—

(i) the total number of each category of security carried over from one settlement period  to another;

(ii) the total number of each category of security, contracts in respect of which have been  squared up during the course of each settlement period;

(iii) the total number of each category of security actually delivered at each clearing; (d) the publication by the clearing house of all or any of the particulars submitted to the  56[Securities and Exchange Board of India] under clause (c) subject to the directions, if any,  issued by the 57[Securities and Exchange Board of India] in this behalf;

(e) the regulation or prohibition of blank transfers;

(f) the number and classes of contracts in respect of which settlements shall be made or  differences paid through the clearing house;

(g) the regulation, or prohibition of budlas or carry-over facilities; (h) the fixing, altering or  postponing of days for settlements;

(i) the determination and declaration of market rates, including the opening, closing highest and  lowest rates for securities;

(j) the terms, conditions and incidents of contracts, including the prescription of margin  requirements, if any, and conditions relating thereto, and the forms of contracts in writing;

(k) the regulation of the entering into, making, performance, rescission and termination, of  contracts, including contracts between members or between a member and his constituent  or between a member and a person who is not a member, and the consequences of default  or insolvency on the part of a seller or buyer or intermediary, the consequences of a breach  or omission by a seller or buyer, and the responsibility of members who are not parties to  such contracts;

(l) the regulation of taravani business including the placing of limitations thereon;

(m) the listing of securities on the stock exchange, the inclusion of any security for the purpose  of dealings and the suspension or withdrawal of any such securities, and the suspension or  prohibition of trading in any specified securities;

(n) the method and procedure for the settlement of claims or disputes, including settlement by  arbitration;

54 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

55 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

56 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

57 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

(o) the levy and recovery of fees, fines and penalties;

(p) the regulation of the course of business between parties to contracts in any capacity; (q) the fixing of a scale of brokerage and other charges;

(r) the making, comparing, settling and closing of bargains;

(s) the emergencies in trade which may arise, whether as a result of pool or syndicated operations  or cornering or otherwise, and the exercise of powers in such emergencies, including the  power to fix maximum and minimum prices for securities;

(t) the regulation of dealings by members for their own account; (u) the separation of the  functions of jobbers and brokers;

(v) the limitations on the volume of trade done by any individual member in exceptional  circumstances;

(w) the obligation of members to supply such information or explanation and to produce such  documents relating to the business as the governing body may require.

(3) The bye-laws made under this section may—

(a) specify the bye-laws the contravention of which shall make a contract entered into otherwise  than in accordance with the bye-laws void under sub-section (1) of section 14;

(b) provide that the contravention of any of the bye-laws shall render the member concerned  liable to one or more of the following punishments, namely:—

(i) fine,

(ii) expulsion from membership,

(iii) suspension from membership for a specified period,

(iv) any other penalty of a like nature not involving the payment of money.

(4) Any bye-laws made under this section shall be subject to such conditions in regard to previous  publication as may be prescribed, and, when approved by the 58[Securities and Exchange Board  of India], shall be published in the Gazette of India and also in the Official Gazette of the State in  which the principal office of the recognised stock exchange is situate, and shall have effect as from  the date of its publication in the Gazette of India:

Provided that if the 59[Securities and Exchange Board of India] is satisfied in any case that in the  interest of the trade or in the public interest any bye-law should be made immediately, it may, by  order in writing specifying the reasons therefor, dispense with the condition of previous  publication.

Power of 60[Securities and Exchange Board of India] to make or amend bye-laws of  recognised stock exchanges.

10. (1) The 61[Securities and Exchange Board of India] may, either on a request in writing received  by it in this behalf from the governing body of a recognised stock exchange or on its own motion,  

58 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

59 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

60 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

61 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

if it is satisfied after consultation with the governing body of the stock exchange that it is necessary  or expedient so to do and after recording its reasons for so doing, make bye-laws for all or any of  the matters specified in section 9 or amend any bye-laws made by such stock exchange under that  section.

(2) Where in pursuance of this section any bye-laws have been made or amended the bye-laws so  made or amended shall be published in the Gazette of India and also in the Official Gazette of the  State in which the principal office of the recognised stock exchange is situate, and on the  publication thereof in the Gazette of India, the bye-laws so made or amended shall have effect as  if they had been made or amended by the recognised stock exchange concerned.  

(3) Notwithstanding anything contained in this section, where the governing body of a recognised  stock exchange objects to any bye-laws made or amended under this section by the 62[Securities  and Exchange Board of India] on its own motion, it may, within 63[two months] of the publication  thereof in the Gazette of India under sub-section (2), apply to the 64[Securities and Exchange Board  of India] for revision thereof, and the 65[Securities and Exchange Board of India] may, after giving  an opportunity to the governing body of the stock exchange to be heard in the matter, revise the  bye-laws so made or amended, anywhere any bye-laws so made or amended are revised as a result  of any action taken under this sub-section, the bye-laws so revised shall be published and shall  become effective as provided in sub-section (2).  

(4) The making or the amendment or revision of any bye-laws under this section shall in all cases  be subject to the condition of previous publication :  

Provided that if the 66[Securities and Exchange Board of India] is satisfied in any case that in the  interest of the trade or in the public interest any bye-laws should be made, amended or revised  immediately, it may, by order in writing specifying the reasons therefor, dispense with the  condition of previous publication.

Power of Central Government67 to supersede governing body of a recognised stock exchange.

11. (1) Without prejudice to any other powers vested in the Central Government under this Act,  where the Central Government is of opinion that the governing body of any recognised stock  exchange should be superseded, then, notwithstanding anything contained in any other law for the  time being in force, in the Central Government may serve on the governing body a written notice  that the Central Government is considering the supersession of the governing body for the reasons  specified in the notice and after giving an opportunity to the governing body to be heard in the  matter, it may, by notification in the Official Gazette, declare the governing body of such stock  exchange to be superseded, and may appoint any person or persons to exercise and perform all the  powers and duties of the governing body, and, where more persons than one are appointed, may  appoint one of such persons to be the chairman and another to be the vice-chairman thereof.

(2) On the publication of a notification in the Official Gazette under sub-section (1), the following  

62 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

63 Substituted for “six months” by the Securities Laws (Amendment) Act, 1995, Sec 20, w.e.f. 25-01-1995. 64 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

65 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

66 Substituted for "Central Government" by the Securities and Exchange Board of India Act, 1992, Sec 33 and  Schedule, Pt II, w.r.e.f. 30-01-1992.

67 Powers are exercisable by SEBI also vide S. O. 573 (E), Dated 30-07-1992, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 30-07-1992.

consequences shall ensue, namely:—

(a) the members of the governing body which has been superseded shall, as from the date of the  notification of supersession, cease to hold office as such members;

(b) the person or persons appointed under sub-section (1) may exercise and perform all the  powers and duties of the governing body which has been superseded;

(c) all such property of the recognised stock exchange as the person or persons appointed under  sub-section (1) may, by order in writing, specify in this behalf as being necessary for the  purpose of enabling him or them to carry on the business of the stock exchange, shall vest  in such person or persons.

(3) Notwithstanding anything to the contrary contained in any law or the rules or bye-laws of the  recognised stock exchange the governing body of which is superseded under sub-section (1), the  person or persons appointed under that sub-section shall hold office for such period as may be  specified in the notification published under that sub-section and the Central Government may  from time to time, by like notification, vary such period.  

(4) The Central Government may at any time before the determination of the period of office of  any person or persons appointed under this section call upon the recognised stock exchange to re constitute the governing body in accordance with its rules and on such re-constitution all the  property of the recognised stock exchange which has vested in, or was in the possession of, the  person or persons appointed under sub-section (1), shall re-vest or vest, as the case may be, in the  governing body so re-constituted:

Provided that until a governing body is so re-constituted, the person or persons appointed under  sub-section (1) shall continue to exercise and perform their powers and duties.

Power to suspend business of recognised stock exchanges. 68 

12. If in the opinion of the Central Government an emergency has arisen and for the purpose of  meeting the emergency the Central Government considers it expedient so to do, it may, by  notification in the Official Gazette, for reasons to be set out therein, direct a recognised stock  exchange to suspend such of its business for such period not exceeding seven days and subject to  such conditions as may be specified in the notification, and, if, in the opinion of the Central  Government, the interest of the trade or the public interest requires that the period should be  extended, may, by like notification extend the said period from time to time :

Provided that where the period of suspension is to be extended beyond the first period, no  notification extending the period of suspension shall be issued unless the governing body of the  69[recognised stock exchange] has been given an opportunity of being heard in the matter.

70[Power to issue directions.

12A. 71[(1)] If, after making or causing to be made an inquiry, the Securities and Exchange Board  of India is satisfied that it is necessary—

(a) in the interest of investors, or orderly development of securities market; or

(b) to prevent the affairs of any recognised stock exchange or clearing corporation, or such other  agency or person, providing trading or clearing or settlement facility in respect of securities,  being conducted in a manner detrimental to the interests of investors or securities market;  

 68 Powers are exercisable by SEBI also vide S. O. 573 (E), Dated 30-07-1992, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 30-07-1992.

69 Substituted by the Repealing and Amending Act, 1974 (Act No. 56 of 1974), Sec 3 and Sch II, for "recognized  association" w.e.f. 20-12-1974.

70 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 6, w.r.e.f. 12-10-2004.

71 Renumbered by the Finance Act, 2018 w.e.f. 08-03-2019.

or

(c) to secure the proper management of any such stock exchange or clearing corporation or  agency or person, referred to in clause (b),

it may issue such directions,—

(i) to any stock exchange or clearing corporation or agency or person referred to in clause (b)  or any person or class of persons associated with the securities market; or

(ii) to any company whose securities are listed or proposed to be listed in a recognised stock  exchange,

as may be appropriate in the interests of investors in securities and the securities market.]

72[Explanation. — For the removal of doubts, it is hereby declared that power to issue directions  under this section shall include and always be deemed to have been included the power to direct  any person, who made profit or averted loss by indulging in any transaction or activity in  contravention of the provisions of this Act or regulations made thereunder, to disgorge an amount  equivalent to the wrongful gain made or loss averted by such contravention.]

73[(2) Without prejudice to the provisions of sub-section (1) and section 23-I, the Securities and  Exchange Board of India may, by an order, for reasons to be recorded in writing, levy penalty  under sections 23A, 23B, 23C, 23D, 23E, 23F, 23G, 23GA and 23H after holding an inquiry in  the prescribed manner.]

CONTRACTS AND OPTIONS IN SECURITIES

Contracts in notified areas illegal in certain circumstances.

13. If the Central Government74 is satisfied, having regard to the nature or the volume of  transactions in securities in any 75[State or States or area] that it is necessary so to do, it may, by  notification in the Official Gazette, declared this section to apply to such 76[State or States or area],  and thereupon every contract in such 77[State or States or area] which is entered into after the date  of the notification otherwise than 78[between members of a recognised stock exchange or  recognised stock exchanges] in such 79[State or States or area] or through or with such member  shall be illegal :

80[Provided that any contract entered into between members of two or more recognised stock  exchanges in such State or States or area, shall—

(i) be subject to such terms and conditions as may be stipulated by the respective stock  exchanges with prior approval of Securities and Exchange Board of India;

(ii) require prior permission from the respective stock exchanges if so stipulated by the stock  exchanges with prior approval of Securities and Exchange Board of India.]

72 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013.

73 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.

74 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

75 Substituted for “State or area” by the Securities Laws (Amendment) Act, 2004, Sec 7, w.r.e.f. 12-10-2004. 76 Substituted for “State or area” by the Securities Laws (Amendment) Act, 2004, Sec 7, w.r.e.f. 12-10- 2004. 77 Substituted for “State or area” by the Securities Laws (Amendment) Act, 2004, Sec 7, w.r.e.f. 12-10-2004. 78 Substituted by the Securities Laws (Amendment) Act, 2004, Sec 7, w.r.e.f. 12- 10-2004 for "between members of  

a recognised stock exchange".

79 Substituted for “State or area” by the Securities Laws (Amendment) Act, 2004, Sec 7, w.r.e.f. 12-10-2004. 80 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 7, w.r.e.f. 12-10-2004.

81[Additional trading floor.

13A. A stock exchange may establish additional trading floor with the prior approval of the  Securities and Exchange Board of India in accordance with the terms and conditions stipulated by  the said Board.

Explanation: For the purposes of this section, “additional trading floor” means a trading ring or  trading facility offered by a recognised stock exchange outside its area of operation to enable the  investors to buy and sell securities through such trading floor under the regulatory framework of  that stock exchange.]

Contracts in notified areas to be void in certain circumstances.

14. (1) Any contract entered into in any State or area specified in the notification under section 13  which is in contravention of any of the bye-laws specified in that behalf under clause (a) of sub section (3) of section 9 shall be void:

(i) as respects the rights of any member of the recognised stock exchange who has entered into  such contract in contravention of any such bye-law, and also

(ii) as respects the rights of any other person who has knowingly participated in the transaction  entailing such contravention.

(2) Nothing in sub-section (1) shall be construed to affect the right of any person other than a  member of the recognised stock exchange to enforce any such contract or to recover any sum  under or in respect of such contract if such person had no knowledge that the transaction was in  contravention of any of the bye-laws specified in clause (a) of sub-section (3) of section 9.

Members may not act as principals in certain circumstances.

15. No member of a recognised stock exchange shall in respect of any securities enter into any  contract as a principal with any person other than a member of a recognised stock exchange, unless  he has secured the consent or authority of such person and discloses in the note, memorandum or  agreement of sale or purchase that he is acting as a principal:

Provided that where the member has secured the consent or authority of such person otherwise  than in writing he shall secure written confirmation by such person or such consent or authority  within three days from the date of the contract:

Provided further that no such written consent or authority of such person shall be necessary for  closing out any outstanding contract entered into by such person in accordance with the bye-laws,  if the member discloses in the note, memorandum or agreement of sale or purchase in respect of  such closing out that he is acting as a principal.

Power to prohibit contracts in certain cases. 82 

16. (1) If the Central Government is of opinion that it is necessary to prevent undesirable  speculation in specified securities in any State or area, it may, by notification in the Official  Gazette, declare that no person in the State or area specified in the notification shall, save with the  permission of the Central Government, enter into any contract for the sale or purchase of any  security specified in the notification except to the extent and in the manner, if any, specified  therein.

(2) All contracts in contravention of the provisions of sub-section (1) entered into after the date of  

81 Inserted by the Securities Laws (Amendment) Act, 1995, Sec 21, w.e.f. 25-01-1995.

82 Powers are exercisable by SEBI also vide S. O. 573 (E), Dated 30-07-1992, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 30-07-1992. Powers are exercisable by RBI also vide Government of India Notification No.  183 (E), Dated 01-03-2000 in relation to any contracts in government securities, money market securities etc.

notification issued thereunder shall be illegal.

Licensing of dealers in securities in certain areas.

17. (1) Subject to the provisions of sub-section (3) and to the other provisions contained in this  Act, no person shall carry on or purport to carry on, whether on his own behalf or on behalf of any  other person, the business of dealing in securities in any State or area to which section 13 has not  been declared to apply and to which the Central Government may, by notification in the Official  Gazette, declare this section to apply, except under the authority of a 83[licence granted by the  Securities and Exchange Board of India] in this behalf.

(2) No notification under sub-section (1) shall be issued with respect to any State or area unless  the Central Government is satisfied, having regard to the manner in which securities are being  dealt with in such State or area, that it is desirable or expedient in the interest of the trade or in the  public interest that such dealings should be regulated by a system of licensing.  

(3) The restrictions imposed by sub-section (1) in relation to dealings in securities shall not apply  to the doing of anything by or on behalf of a member of any recognised stock exchange.  

84[Public issue and listing of securities referred to in sub-clause (ie) of clause (h) of section 2.

17A. (1) Without prejudice to the provisions contained in this Act or any other law for the time  being in force, no securities of the nature referred to in sub-clause (ie) of clause (h) of section 2  shall be offered to the public or listed on any recognised stock exchange unless the issuer fulfils  

such eligibility criteria and complies with such other requirements as may be specified by  regulations made by the Securities and Exchange Board of India.

(2) Every issuer referred to in sub-clause (ie) of clause (h) of section 2 intending to offer the  certificates or instruments referred therein to the public shall make an application, before issuing  the offer document to the public, to one or more recognised stock exchanges for permission for  such certificates or instruments to be listed on the stock exchange or each such stock exchange.  

(3) Where the permission applied for under sub-section (2) for listing has not been granted or  refused by the recognised stock exchanges or any of them, the issuer shall forthwith repay all  moneys, if any, received from applicants in pursuance of the offer document, and if any such  money is not repaid within eight days after the issuer becomes liable to repay it, the issuer and  every director or trustee thereof, as the case may be, who is in default shall, on and from the expiry  of the eighth day, be jointly and severally liable to repay that money with interest at the rate of  fifteen per cent per annum.  

Explanation.—In reckoning the eighth day after another day, any intervening day which is a public  holiday under the Negotiable Instruments Act, 1881 (26 of 1881), shall be disregarded, and if the  eighth day (as so reckoned) is itself such a public holiday, there shall for the said purposes be  substituted the first day thereafter which is not a holiday.

(4) All the provisions of this Act relating to listing of securities of a public company on a  recognised stock exchange shall, mutatis mutandis, apply to the listing of the securities of the  nature referred to in sub-clause (ie) of clause (h) of section 2 by the issuer, being a special purpose  distinct entity.]

Exclusion of spot delivery contracts from sections 13, 14, 15 and 17.

 83 Substituted by the Securities and Exchange Board of India Act, 1992, Sec 33 and Schedule, Pt II, w.r.e.f. 30-01- 1992 for "licence granted by the Central Government".

84 Inserted by the Securities Contracts (Regulation) Amendment Act, 2007, Sec 3, w.e.f. 28-05-2007.

18. (1) Nothing contained in sections 13, 14, 15 and 17 shall apply to spot delivery contracts.

(2) Notwithstanding anything contained in sub-section (1), if the Central Government85 is of  opinion that in the interest of the trade or in the public interest it is expedient to regulate and  control the business of dealing in spot delivery contracts also in any State or area (whether section  13 has been declared to apply to that State or area or not), it may, by notification in the Official  Gazette, declare that the provisions of section 17 shall also apply to such State or area in respect  of spot delivery contracts generally or in respect of spot delivery contracts for the sale or purchase  of such securities as may be specified in the notification, and may also specify the manner in  which, and the extent to which, the provisions of that section shall so apply.

86[Contracts in derivative.

18A. Notwithstanding anything contained in any other law for the time being in force, contracts  in derivative shall be legal and valid if such contracts are—

(a) traded on a recognised stock exchange;

(b) settled on the clearing house of the recognised 87[stock exchange; or]  

in accordance with the rules and bye-laws of such stock exchange.]

88[(c) between such parties and on such terms as the Central Government may, by notification in  the Official Gazette, specify,]

Stock exchanges other than recognised stock exchanges prohibited.

19. (1) No person shall, except with the permission of the Central Government, organise or assist  in organising or be a member of any stock exchange (other than a recognised stock exchange) for  the purpose of assisting in, entering into or performing any contracts in securities.

(2) This section shall come into force in any State or area on such date as the Central Government  may, by notification in the Official Gazette, appoint.

Prohibition of options in securities.  

20. 89[*****]

LISTING OF SECURITIES 90[***]

85 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

86 Inserted by the Securities Laws (Amendment) Act, 1999, Sec 3, w.e.f. 22-2-2000.

87 Substituted for "stock exchange," by the Part II of Chapter VIII of the Finance Act 2015, w.e.f. 28.09.2015 vide  Gazette Notification F. No. 1/9/SM/2015, Extraordinary, Pt. II, Sec. 3, Sub-section (ii) dtd 28.08.2015. 88 Inserted by the Part II of Chapter VIII of the Finance Act 2015, w.e.f. 28.09.2015 vide Gazette Notification F. No.  1/9/SM/2015, Extraordinary, Pt. II, Sec. 3, Sub-section (ii) dtd 28.08.2015. Section 134 of the Finance Act, 2015  states: “In section 18A of the Securities Contracts Act,—

(i) in clause (b), for the words "stock exchange,", the words ''stock exchange; or" shall be substituted; (ii) after clause (b) as so amended, and after the long line, the following clause shall be inserted, namely:— "(c) between such parties and on such terms as the Central Government may, by notification in the Official Gazette,  specify,".

89 Omitted by the Securities Laws (Amendment) Act, 1995, Sec 22, w.e.f. 25-01-1995. Prior to omission, section 20  read as under :  

“20. Prohibition. of options in securities.—(1) Notwithstanding anything contained in this Act or in any other law  for the time being in force, all options in securities entered into after the commencement of this Act shall be illegal.  (2) Any option in securities which has been entered into before such commencement and which remains to be  performed, whether wholly or in part, after such commencement shall, to that extent, become void.“

90 Words “By Public Companies” omitted by the Securities Laws (Amendment) Act, 1999, Sec 4, w.e.f.  22-02-2000.

91[Conditions for listing.

21. Where securities are listed on the application of any person in any recognised stock exchange,  such person shall comply with the conditions of the listing agreement with that stock exchange.]

92[Delisting of securities.

21A. (1) A recognised stock exchange may delist the securities, after recording the reasons  therefor, from any recognised stock exchange on any of the ground or grounds as may be  prescribed under this Act :

Provided that the securities of a company shall not be delisted unless the company concerned has  been given a reasonable opportunity of being heard.

(2) A listed company or an aggrieved investor may file an appeal before the Securities Appellate  Tribunal against the decision of the recognised stock exchange delisting the securities within  fifteen days from the date of the decision of the recognised stock exchange delisting the securities  and the provisions of sections 22B to 22E of this Act, shall apply, as far as may be, to such appeals:

Provided that the Securities Appellate Tribunal may, if it is satisfied that the company was  prevented by sufficient cause from filing the appeal within the said period, allow it to be filed  within a further period not exceeding one month.]

93[Right of appeal against refusal of stock exchanges to list securities of public companies.

9422. Where a recognised stock exchange acting in pursuance of any power given to it by its bye laws, refuses to list the securities of any public company 95[or collective investment scheme], the  company 96[or scheme] shall be entitled to be furnished with reasons for such refusal, and may,— (a) within fifteen days from the date on which the reasons for such refusal are furnished to it,  or

(b) where the stock exchange has omitted or failed to dispose of, within the time specified in  sub-section (1) of section 73 of the Companies Act, 1956 (1 of 1956)

(hereafter in this section referred to as the “specified time”), the application for permission  for the shares or debentures to be dealt with on the stock exchange,

within fifteen days from the date of expiry of the specified time or within such further  period, not exceeding one month, as the Central Government may, on sufficient cause being  shown, allow,

appeal to the Central Government against such refusal, omission or failure, as the case may be,  and thereupon the Central Government may, after giving the stock exchange an opportunity of  being heard,—

 91 Substituted by the Securities Laws (Amendment) Act, 1995, Sec 33, w.e.f. 25-01-1995. Prior to substitution,  section 21 read as under:

“21. Power to compel listing of securities by public companies.—Notwithstanding anything contained in any other  law for the time being in force, if the Securities and Exchange Board of India is of opinion, having regard to the  nature of the securities issued by any public company as defined in the Companies Act, 1956 (1 of 1956), or to the  dealings in them, that it is necessary or expedient in the interest of the trade or in the public interest so to do, it  may require the company, after giving it an opportunity of being heard in the matter, to comply with such  requirements as may be prescribed with respect to the listing of its securities on any recognised stock exchange.”

92 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 8, w.r.e.f. 12-10-2004.

93 Substituted by The Companies (Amendment) Act, 1974 (Act No. 41 of 1974), Sec 42, w.e.f. 01-02-1975. 94 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

95 Inserted by the Securities Laws (Amendment) Act, 1999, Sec 5, w.e.f. 22-02-2000.; Substituted by The Repealing  and Amending Act, 1974 (Act No. 56 of 1974), Sec 3 and Sch II, for "recognized association" w.e.f. 20-12-1974. 96 Inserted by the Securities Laws (Amendment) Act, 1999, Sec 5, w.e.f. 22-02-2000.

(i) vary or set aside the decision of the stock exchange, or

(ii) where the stock exchange has omitted or failed to dispose of the application within the  specified time, grant or refuse the permission,

and where the Central Government sets aside the decision of the recognised stock exchange or  grants the permission, the stock exchange shall act in conformity with the orders of the Central  Government]:

97[Provided that no appeal shall be preferred against refusal, omission or failure, as the case may  be, under this section on and after the commencement of the Securities Laws (Second  Amendment) Act, 1999.]

98[Right of appeal to Securities Appellate Tribunal against refusal of stock exchange to list  securities of public companies.

22A. (1) Where a recognised stock exchange, acting in pursuance of any power given to it by its  bye-laws, refuses to list the securities of any company, the company shall be entitled to be  furnished with reasons for such refusal, and may,—

(a) within fifteen days from the date on which the reasons for such refusal are furnished to it,  or

(b) where the stock exchange has omitted or failed to dispose of, within the time specified in sub section (1A) of section 73 of the Companies Act, 1956 (1 of 1956), (hereafter in this section  referred to as the “specified time”), the application for permission or for the shares or debentures  to be dealt with on the stock exchange, within fifteen days from the date of expiry of the specified  time or within such further period, not exceeding one month, as the Securities Appellate Tribunal  may, on sufficient cause being shown, allow,

appeal to the Securities Appellate Tribunal having jurisdiction in the matter against such refusal,  omission or failure, as the case may be, and thereupon the Securities Appellate Tribunal may, after  giving the stock exchange, an opportunity of being heard,—

(i) vary or set aside the decision of the stock exchange; or

(ii) where the stock exchange has omitted or failed to dispose of the application within the  specified time, grant or refuse the permission,

and where the Securities Appellate Tribunal sets aside the decision of the recognised stock  exchange or grants the permission, the stock exchange shall act in conformity with the orders of the Securities Appellate Tribunal.

(2) Every appeal under sub-section (1) shall be in such form and be accompanied by such fee as  may be prescribed.  

(3) The Securities Appellate Tribunal shall send a copy of every order made by it to the Board  and parties to the appeal.  

(4) The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall be dealt  with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal  finally within six months from the date of receipt of the appeal.]  

99[Procedure and powers of Securities Appellate Tribunal.

 97 Inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 4, w.e.f. 16-12-1999. 98 Sections 22A, 22B, 22C, 22D, 22E and 22F inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 5,  w.e.f. 16-12-1999. Earlier section 22A was inserted by the Securities Contracts (Regulation) Amendment Act, 1985  (Act No. 40 of 1985), Sec 2, w.e.f. 17-01-1986, and omitted by the Depositories Act, 1996, Sec 30 and Sch., Pt.III,  w.r.e.f. 20-09-1995.

99 Inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 5, w.e.f. 16-12-1999.

22B. (1) The Securities Appellate Tribunal shall not be bound by the procedure laid down by the  Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice  and, subject to the other provisions of this Act and of any rules, the Securities Appellate Tribunal  shall have powers to regulate their own procedure including the places at which they shall have  their sittings.

(2) The Securities Appellate Tribunal shall have, for the purpose of discharging their functions  under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure,  1908 (5 of 1908), while trying a suit, in respect of the following matters, namely :—

(a) summoning and enforcing the attendance of any person and examining him on oath ;

(b) requiring the discovery and production of documents; (c) receiving evidence on affidavits; (d) issuing commissions for the examination of witnesses or documents; (e) reviewing its  decisions;

(f) dismissing an application for default or deciding it ex parte;

(g) setting aside any order of dismissal of any application for default or any order passed by it  ex parte; and

(h) any other matter which may be prescribed.

(3) Every proceeding before the Securities Appellate Tribunal shall be deemed to be a judicial  proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the  Indian Penal Code (45 of 1860) and the Securities Appellate Tribunal shall be deemed to be a civil  court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure,  1973 (2 of 1974).]

100[Right to legal representation.

22C. The appellant may either appear in person or authorise one or more chartered accountants or  company secretaries or cost accountants or legal practitioners or any of its officers to present his  or its case before the Securities Appellate Tribunal.

Explanation.—For the purposes of this section,—

(a) “chartered accountant” means a chartered accountant as defined in clause b)of sub-section  (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained  a certificate of practice under sub-section (1) of section 6 of that Act;

(b) “company secretary” means a company secretary as defined in clause (c) of sub- section (1)  of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has obtained a  certificate of practice under sub-section (1) of section 6 of that Act;

(c) “cost accountant” means a cost accountant as defined in clause (b)of sub section (1) of  section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who has obtained a  certificate of practice under sub-section (1) of section 6 of that Act;

(d) “legal practitioner” means an advocate, vakil or an attorney of any High Court, and includes  a pleader in practice.]

101[Limitation.

22D. The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to an  appeal made to a Securities Appellate Tribunal.]

100 Inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 5, w.e.f. 16-12-1999. 101 Inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 5, w.e.f. 16-12-1999.

102[Civil court not to have jurisdiction.

22E. No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any  matter which a Securities Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to  be taken in pursuance of any power conferred by or under this Act.]

103[Appeal to Supreme Court.

22F. Any person aggrieved by any decision or order of the Securities Appellate Tribunal may file  an appeal to the Supreme Court within sixty days from the date of communication of the decision  or order of the Securities Appellate Tribunal to him on any question of law arising out of such  order:

Provided that the Supreme Court may, if it is satisfied that the appellant was prevented by  sufficient cause from filing the appeal within the said period, allow it to be filed within a further  period not exceeding sixty days.]

PENALTIES AND PROCEDURE

Penalties.

23. (1) Any person who-

(a) without reasonable excuse (the burden of proving which shall be on him) fails to comply  with any requisition made under sub-section (4) of section 6; or

(b) enters into any contract in contravention of any of the provisions contained in section 13 or  section 16; or

(c) contravenes the provisions contained in 104[section 17 or section 17A], or section 19; or 105 [(d) enters into any contract in derivative in contravention of section 18A or the rules made  under section 30;]

(e) owns or keeps a place other than that of a recognised stock exchange which is used for the  purpose of entering into or performing any contracts in contravention of any of the  provisions of this Act and knowingly permits such place to be used for such purposes; or

(f) manages, controls, or assists in keeping any place other than that of a recognised stock  exchange which is used for the purpose of entering into or performing any contracts in  contravention of any of the provisions of this Act or at which contracts are recorded or  adjusted or rights or liabilities arising out of contracts are adjusted, regulated or enforced in  any manner whatsoever; or

(g) not being a member of a recognised stock exchange or his agent authorised as such under  

 102 Inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 5, w.e.f. 16-12-1999. 103 Substituted by the Securities Laws (Amendment) Act, 2004, Sec 9, w.r.e.f. 12-10-2004. Earlier section 22F as  inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 5, read as under:-

“22F. Appeal to High Court.-Any person aggrieved by any decision or order of the Securities Appellate Tribunal may  file an appeal to the High Court within sixty days from the date of communication of the decision or order of the  Securities Appellate Tribunal to him on any question of fact or law arising out of such order :  Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing  the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.” 104 Inserted by the Securities Contracts (Regulation) Amendment Act, 2007, Sec 4, w.e.f. 28-05-2007 for "section  17".

105 Inserted by the Securities Laws (Amendment) Act, 1999, Sec 6, w.e.f. 22-02-2000. Earlier clause (d) was omitted  by the Securities Laws (Amendment) Act, 1995, Sec 24, w.e.f. 25-01-1995.

the rules or bye-laws of such stock exchange or not being a dealer in securities licensed  under section 17 wilfully represents to or induces any person to believe that contracts can  be entered into or performed under this Act through him; or

(h) not being a member of a recognised stock exchange or his agent authorised as such under  the rules or bye-laws of such stock exchange or not being a dealer in securities licensed  under section 17, canvasses, advertises or touts in any manner either for himself or on behalf  of any other persons for any business connected with contracts in contravention of any of  the provisions of this Act; or

(i) joins, gathers or assists in gathering at any place other than the place of business specified in  the bye-laws of a recognised stock exchange any person or persons for making bids or offers  or for entering into or performing any contracts in contravention of any of the provisions of  this Act;

106[shall, without prejudice to any award of penalty by the Adjudicating Officer 107[or the  Securities and Exchange Board of India] under this Act, on conviction, be punishable with  imprisonment for a term which may extend to ten years or with fine, which may extend to twenty five crore rupees, or with both.]

(2) Any person who enters into any contract in contravention of the provisions contained in section  15 108[or who fails to comply with the provisions of 109[section 21 or section 21A] or with the  orders of] or section 22 110[or with the orders of the Securities Appellate Tribunal] 111[shall,  without prejudice to any award of penalty by the Adjudicating Officer under this Act, on  conviction, be punishable with imprisonment for a term which may extend to ten years or with  fine, which may extend to twenty-five crore rupees, or with both.]

112[Penalty for failure to furnish information, return, etc.

23A. Any person, who is required under this Act or any rules made thereunder,—

(a) to furnish any information, document, books, returns or 113[report to the recongnised stock  exchange or to the Board, fails to furnish the same within the time specified therefor in the  listing agreement or conditions or bye-laws of the recongnised stock exchange or the Act or  rules made thereunder, or who furnishes]114[*** false, incorrect or incomplete information,  

106 Substituted for “shall, on conviction, be punishable with imprisonment for a term which may extend to one year,  or with fine, or with both” by the Securities Laws (Amendment) Act, 2004, Sec 10, w.r.e.f. 12-10- 2004. 107 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.

108 Substituted for “or who fails to comply with the orders of the Securities and Exchange Board of India under  Section 21” by the Securities Laws (Amendment) Act 1995, Sec 24 w.e.f.25-01-1995.Prior to 1995, "Securities and  Exchange Board of India under section 21 or Central Government under section 22" were substitutes for “Central  Government under Section 21 or section 22” vide The Schedule, Part II of Securities and Exchange Board of India  Act, 1992, w.e.f. 30-01-1992.

109 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 10, w.r.e.f. 12-10-2004. 110 Inserted by the Securities Laws (Second Amendment) Act, 1999, Sec 6, w.e.f. 16-12-1999. 111 Substituted for “shall, on conviction, be punishable with fine which may extend to one thousand rupees” by the  Securities Laws (Amendment) Act, 2004, Sec 10, w.r.e.f. 12-10-2004.

112 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 11, w.r.e.f. 12-10-2004. 113 Substituted for the words “report to a recognised stock exchange, fails to furnish the same within the time  specified therefor in the listing agreement or conditions or bye-laws of the recognised stock exchange or who  furnishes”, by the Finance (No. 2) Act, 2019 w.e.f. 20-01-2020.

114 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.

document, books, return or report], shall be liable to a penalty 115[which shall not be less  than one lakh rupees but which may extend to one lakh rupees for each day during which  such failure continues subject to a maximum of one crore rupees] for each such failure;

(b) to maintain books of account or records, as per the listing agreement or conditions, or bye laws of a recognised stock exchange, fails to maintain the same, shall be liable to a penalty  116[which shall not be less than one lakh rupees but which may extend to one lakh rupees  for each day during which such failure continues subject to a maximum of one crore rupees.]

117[Penalty for failure by any person to enter into an agreement with clients. 23B. If any person, who is required under this Act or any bye-laws of a recognised stock exchange  made thereunder, to enter into an agreement with his client, fails to enter into such an agreement,  he shall be liable to a penalty 118[which shall not be less than one lakh rupees but which may  extend to one lakh rupees for each day during which such failure continues subject to a maximum  of one crore rupees] for every such failure.]

119[Penalty for failure to redress investors’ grievances.  

23C. If any stock broker or sub-broker or a company whose securities are listed or proposed to be  listed in a recognised stock exchange, after having been called upon by the Securities and  Exchange Board of India or a recognised stock exchange in writing, to redress the grievances of  the investors, fails to redress such grievances within the time stipulated by the Securities and  Exchange Board of India or a recognised stock exchange, he or it shall be liable to a penalty  120[which shall not be less than one lakh rupees but which may extend to one lakh rupees for each  day during which such failure continues subject to a maximum of one crore rupees.]

121[Penalty for failure to segregate securities or moneys of client or clients. 23D. If any person, who is registered under section 12 of the Securities and Exchange Board of  India Act, 1992 (15 of 1992) as a stock broker or sub-broker, fails to segregate securities or moneys  of the client or clients or uses the securities or moneys of a client or clients for self or for any other  client, he shall be 122[liable to a penalty which shall not be less than one lakh rupees but which  may extend to one crore rupees.]

123[Penalty for failure to comply with provision of listing conditions or delisting conditions  or grounds.

23E. If a company or any person managing collective investment scheme or mutual fund 124[or  real estate investment trust or infrastructure investment trust or alternative investment fund], fails  

115 Substituted for the words "‘of one lakh rupees for each day during which such failure continues or one crore  rupees, whichever is less" by the Securities Laws (Amendment) Act, 2014, w.e.f 08-09-2014. 116 Substituted for the words "‘of one lakh rupees for each day during which such failure continues or one crore  rupees, whichever is less" by the Securities Laws (Amendment) Act, 2014, w.e.f 08-09-2014. 117 Inserted by the Securities Laws (Amendment) Act, 2004, w.r.e.f. 12-10-2004.

118 Substituted for the words "of one lakh rupees for each day during which such failure continues or one crore  rupees, whichever is less" by the Securities Laws (Amendment) Act, 2014, w.e.f 08-09-2014. 119 Inserted by the Securities Laws (Amendment) Act, 2004, w.r.e.f. 12-10-2004.

120 Substituted for the words "of one lakh rupees for each day during which such failure continues or one crore  rupees, whichever is less" by the Securities Laws (Amendment) Act, 2014, w.e.f 08-09-2014. 121 Inserted by the Securities Laws (Amendment) Act, 2004, w.r.e.f. 12-10-2004.

122 Substituted for the words "liable to a penalty not exceeding one crore rupees" by the Securities Laws  (Amendment) Act, 2014, w.e.f 08-09-2014.

123 Inserted by the Securities Laws (Amendment) Act, 2004, w.r.e.f. 12-10-2004.

124 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.

to comply with the listing conditions or delisting conditions or grounds or commits a breach  thereof, it or he shall be 125[liable to a penalty which shall not be less than five lakh rupees but  which may extend to twenty-five crore rupees.]

126[Penalty for excess dematerialisation or delivery of unlisted securities. 23F. If any issuer dematerialises securities more than the issued securities of a company or delivers  in the stock exchanges the securities which are not listed in the recognised stock exchange or  delivers securities where no trading permission has been given by the recognised stock exchange,  he shall be 127[liable to a penalty which shall not be less than five lakh rupees but which may  extend to twenty-five crore rupees.]

128[Penalty for failure to furnish periodical returns, etc.

23G. If a recognised stock exchange fails or neglects to furnish periodical returns 129[or furnishes  false, incorrect or incomplete periodical returns] to the Securities and Exchange Board of India or  fails or neglects to make or amend its rules or bye-laws as directed by the Securities and Exchange  Board of India or fails to comply with directions issued by the Securities and Exchange Board of  India, such recognised stock exchange shall be 130[liable to a penalty which shall not be less than  five lakh rupees but which may extend to twenty-five crore rupees.]

131[Penalty for failure to conduct business in accordance with rules, etc. 23GA. Where a stock exchange or a clearing corporation fails to conduct its business with its  members or any issuer or its agent or any person associated with the securities markets in  accordance with the rules or regulations made by the Securities and Exchange Board of India and  the directions issued by it under this Act, the stock exchange or the clearing corporations, as the  case may be, shall be liable to penalty which shall not be less than five crore rupees but which  may extend to twenty-five crore rupees or three times the amount of gains made out of such failure,  whichever is higher.]

132[Penalty for contravention where no separate penalty has been provided. 23H. Whoever fails to comply with any provision of this Act, the rules or articles or bye- laws or  the regulations of the recognised stock exchange or directions issued by the Securities and  Exchange Board of India for which no separate penalty has been provided, shall be 133[liable to a  penalty which shall not be less than one lakh rupees but which may extend to one crore rupees.]

134[Power to adjudicate.

23-I. (1) For the purpose of adjudging under sections 23A, 23B, 23C, 23D, 23E, 23F, 23G and  23H, the Securities and Exchange Board of India 135[may] appoint any officer not below the rank  

125 Substituted for the words "liable to a penalty not exceeding twenty-five crore rupees" by the Securities Laws  (Amendment) Act, 2014, w.e.f 08-09-2014.

126 Inserted by the Securities Laws (Amendment) Act, 2004, w.r.e.f. 12-10-2004.

127 Substituted for the words "liable to a penalty not exceeding twenty-five crore rupees" by the Securities Laws  (Amendment) Act, 2014, w.e.f 08-09-2014.

128 Inserted by the Securities Laws (Amendment) Act, 2004, w.r.e.f. 12-10-2004.

129 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.

130 Substituted for the words "liable to a penalty not exceeding twenty-five crore rupees" by the Securities Laws  (Amendment) Act, 2014, w.e.f 08-09-2014.

131 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.

132 Inserted by the Securities Laws (Amendment) Act, 2004, w.r.e.f. 12-10-2004.

133 Substituted for the words "liable to a penalty which may extend to one crore rupees" by the Securities Laws  (Amendment) Act, 2014, w.e.f 08-09-2014.

134 Inserted by the Securities Laws (Amendment) Act, 2004, w.r.e.f. 12-10-2004.

135 Substituted for the word " shall" by the Finance Act, 2018 w.e.f. 08-03-2019.

of a Division Chief of the Securities and Exchange Board of India to be an adjudicating officer for  holding an inquiry in the prescribed manner after giving any person concerned a reasonable  opportunity of being heard for the purpose of imposing any penalty.

(2) While holding an inquiry, the adjudicating officer shall have power to summon and enforce  the attendance of any person acquainted with the facts and circumstances of the case to give  evidence or to produce any document, which in the opinion of the adjudicating officer, may be  useful for or relevant to the subject-matter of the inquiry and if, on such inquiry, he is satisfied  that the person has failed to comply with the provisions of any of the sections specified in sub

section (1), he may impose such penalty as he thinks fit in accordance with the provisions of any  of those sections.

136[(3) The Board may call for and examine the record of any proceedings under this section and  if it considers that the order passed by the adjudicating officer is erroneous to the extent it is not  in the interests of the securities market, it may, after making or causing to be made such inquiry  as it deems necessary, pass an order enhancing the quantum of penalty, if the circumstances of the  case so justify:

Provided that no such order shall be passed unless the person concerned has been given an  opportunity of being heard in the matter:

Provided further that nothing contained in this sub-section shall be applicable after an expiry of a  period of three months from the date of the order passed by the adjudicating officer or disposal of  the appeal under section 23L, whichever is earlier.]

137[ 138[ Factors to be taken into account while adjudging quantum of penalty.] 23J. While adjudging the quantum of penalty under 139[section 12A or section 23-I], the 140[ the Securities and Exchange Board of India or the adjudicating officer] shall have due regard to the  following factors, namely:—

(a) the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a  result of the default;

(b) the amount of loss caused to an investor or group of investors as a result of the default; (c) the repetitive nature of the default.]

141[Explanation.—For the removal of doubts, it is clarified that the power of an adjudicating officer  to adjudge the quantum of penalty under sections 23A to 23C shall be and shall always be deemed  to have exercised under the provisions of this section.]

142[Settlement of administrative and civil proceedings.

23JA. (1) Notwithstanding anything contained in any other law for the time being in force, any  person, against whom any proceedings have been initiated or may be initiated under section 12A  or section 23-I, may file an application in writing to the Board proposing for settlement of the  proceedings initiated or to be initiated for the alleged defaults.

136 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 28-03-2014.

137 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 11, w.r.e.f. 12-10-2004. 138 Substituted for the words " Factors to be taken into account by adjudicating officer." by the Finance Act, 2018  w.e.f. 08-03-2019.

139 Substituted for the word, figures and letter "section 23-I" by the Finance Act, 2018 w.e.f. 08-03-2019. 140 Substituted for the words "adjudicating officer" by the Finance Act, 2018 w.e.f. 08-03-2019. 141 Inserted by Part V of Chanpter VI of the Finance Act, 2017, w.e.f. 01.04.2017 vide Gazette Notification No. 7 , Extraordinary, Pt II Section I dated March 31, 2017 142 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 20-04-2007.

(2) The Board may, after taking into consideration the nature, gravity and impact of defaults, agree  to the proposal for settlement, on payment of such sum by the defaulter or on such other terms as  may be determined by the Board in accordance with the regulations made under the Securities and  Exchange Board of India Act, 1992.  

(3) For the purposes of settlement under this section, the procedure as specified by the Board  under the Securities and Exchange Board of India Act, 1992 shall apply.  

(4) No appeal shall lie under section 23L against any order passed by the Board or the  adjudicating officer, as the case may be, under this section.]

143[(5) All settlement amounts, excluding the disgorgement amount and legal costs, realised  under this Act shall be credited to the Consolidated Fund of India.]

144[Recovery of amounts.

23JB. (1) If a person fails to pay the penalty imposed 145[ under this Act] or fails to comply with  a direction of disgorgement order issued under section 12A or fails to pay any fees due to the  Board, the Recovery Officer may draw up under his signature a statement in the specified form  specifying the amount due from the person (such statement being hereafter in this Chapter referred  to as certificate) and shall proceed to recover from such person the amount specified in the  certificate by one or more of the following modes, namely:—

(a) attachment and sale of the person's movable property;  

(b) attachment of the person's bank accounts;  

(c) attachment and sale of the person's immovable property;  

(d) arrest of the person and his detention in prison;  

(e) appointing a receiver for the management of the person's movable and immovable  properties,  

and for this purpose, the provisions of sections 220 to 227, 228A, 229, 232, the Second and Third  Schedules to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962,  as in force from time to time, in so far as may be, apply with necessary modifications as if the said  provisions and the rules thereunder were the provisions of this Act and referred to the amount due  under this Act instead of to income-tax under the Income-tax Act, 1961.

Explanation 1.— For the purposes of this sub-section, the person's movable or immovable  property or monies held in bank accounts shall include any property or monies held in bank  accounts which has been transferred, directly or indirectly on or after the date when the amount  specified in certificate had become due, by the person to his spouse or minor child or son's wife  or son's minor child, otherwise than for adequate consideration, and which is held by, or stands in  the name of, any of the persons aforesaid; and so far as the movable or immovable property or  monies held in bank accounts so transferred to his minor child or his son's minor child is  concerned, it shall, even after the date of attainment of majority by such minor child or son's minor  child, as the case may be, continue to be included in the person's movable or immovable property  or monies held in bank accounts for recovering any amount due from the person under this Act.

Explanation 2. — Any reference under the provisions of the Second and Third Schedules to  the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962 to the assessee  shall be construed as a reference to the person specified in the certificate.

Explanation 3.— Any reference to appeal in Chapter XVIID and the Second Schedule to the  Income-tax Act, 1961, shall be construed as a reference to appeal before the Securities Appellate   143 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019

144 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 20-04-2007.

145 Substituted for the words "by the adjudicating officer" by the Finance Act, 2018 w.e.f. 08-03-2019.

Tribunal under section 23L of this Act.

(2) The Recovery Officer shall be empowered to seek the assistance of the local district  administration while exercising the powers under sub-section (1).  

(3) Notwithstanding anything contained in any other law for the time being in force, the recovery  of amounts by a Recovery Officer under sub-section (1), pursuant to non-compliance with any  direction issued by the Board under section 12A, shall have precedence over any other claim  against such person.  

(4) For the purposes of sub-sections (1), (2) and (3), the expression “Recovery Officer” means any  officer of the Board who may be authorised, by general or special order in writing to exercise the  powers of a Recovery Officer.]

146[Continuance of proceedings.

23JC. (1) Where a person dies, his legal representative shall be liable to pay any sum which the  deceased would have been liable to pay, if he had not died, in the like manner and to the same  extent as the deceased:

Provided that, in case of any penalty payable under this Act, a legal representative shall be  liable only in case the penalty has been imposed before the death of the deceased person.

(2) For the purposes of sub-section (1),—

(a) any proceeding for disgorgement, refund or an action for recovery before the Recovery  Officer under this Act, except a proceeding for levy of penalty, initiated against the deceased  before his death shall be deemed to have been initiated against the legal representative, and may  be continued against the legal representative from the stage at which it stood on the date of the  death of the deceased and all the provisions of this Act shall apply accordingly;

(b) any proceeding for disgorgement, refund or an action for recovery before the Recovery  Officer under this Act, except a proceeding for levy of penalty, which could have been initiated  against the deceased if he had survived, may be initiated against the legal representative and all  the provisions of this Act shall apply accordingly.

(3) Every legal representative shall be personally liable for any sum payable by him in his  capacity as legal representative if, while his liability for such sum remains undischarged, he creates  a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or  may come into, his possession, but such liability shall be limited to the value of the asset so  charged, disposed of or parted with.

(4) The liability of a legal representative under this section shall, be limited to the extent  to which the estate of the deceased is capable of meeting the liability.

Explanation.—For the purposes of this section ‘‘Legal representative” means a person who  in law represents the estate of a deceased person, and includes any person who intermeddles with  the estate of the deceased and where a party sues or is sued in a representative character, the person  on whom the estate devolves on the death of the party so suing or sued.]

147[Crediting sums realised by way of penalties to Consolidated Fund of India. 23K. All sums realised by way of penalties under this Act shall be credited to the Consolidated  Fund of India.]

146 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.

147 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013.

148[Appeal to Securities Appellate Tribunal.

23L. (1) Any person aggrieved, by the order or decision of the recognized stock exchange or the  adjudicating officer or any order made by the Securities and Exchange Board of India under 149[or  sub-section (3) of section 23-I], may prefer an appeal before the Securities Appellate Tribunal and  the provisions of sections 22B, 22C, 22D and 22E of this Act, shall apply, as far as may be, to  such appeals.

(2) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the  date on which a copy of the order or decision is received by the appellant and it shall be in such  form and be accompanied by such fee as may be prescribed:

Provided that the Securities Appellate Tribunal may entertain an appeal after the expiry of the said  period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that  period.

(3) On receipt of an appeal under sub-section (1), the Securities Appellate Tribunal may, after  giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks  fit, confirming, modifying or setting aside the order appealed against.  

(4) The Securities Appellate Tribunal shall send a copy of every order made by it to the parties to  the appeal and to the concerned adjudicating officer.  

(5) The appeal filed before the Securities Appellate Tribunal under sub-section (1) shall be dealt  with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal  finally within six months from the date of receipt of the appeal.]  

150[Offences.

23M. (1) Without prejudice to any award of penalty by the adjudicating officer 151[or the Securities  and Exchange Board of India] under this Act, if any person contravenes or attempts to contravene  or abets the contravention of the provisions of this Act or of any rules or regulations or bye-laws  made thereunder, for which no punishment is provided elsewhere in this Act, he shall be  punishable with imprisonment for a term which may extend to ten years, or with fine, which may  extend to twenty-five crore rupees or with both.

(2) If any person fails to pay the penalty imposed by the adjudicating officer 152[or the Securities  and Exchange Board of India] or fails to comply with 153[the direction or order], he shall be  punishable with imprisonment for a term which shall not be less than one month but which may  extend to ten years, or with fine, which may extend to twenty-five crore rupees, or with both.]

154[Composition of certain offences.

23N. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),  any offence punishable under this Act, not being an offence punishable with imprisonment only,  or with imprisonment and also with fine, may either before or after the institution of any  proceeding, be compounded by a Securities Appellate Tribunal or a court before which such  proceedings are pending.]

148 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 11, w.r.e.f. 12-10-2004. 149 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 28-03-2014.

150 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 11, w.r.e.f. 12-10-2004. 151 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.

152 Inserted by the Finance Act, 2018 w.e.f. 08-03-2019.

153 Substituted for the words "any of his directions or orders" by the Finance Act, 2018 w.e.f. 08-03-2019 154 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 11, w.r.e.f. 12-10-2004.

155[Power to grant immunity.

23-O. (1) The Central Government may, on recommendation by the Securities and Exchange  Board of India, if the Central Government is satisfied, that any person, who is alleged to have  violated any of the provisions of this Act or the rules or the regulations made thereunder, has made  a full and true disclosure in respect of alleged violation, grant to such person, subject to such  conditions as it may think fit to impose, immunity from prosecution for any offence under this  Act, or the rules or the regulations made thereunder or also from the imposition of any penalty  under this Act with respect to the alleged violation:

Provided that no such immunity shall be granted by the Central Government in cases where the  proceedings for the prosecution for any such offence have been instituted before the date of receipt  of application for grant of such immunity:

Provided further that the recommendation of the Securities and Exchange Board of India under  this sub-section shall not be binding upon the Central Government.

(2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the  Central Government, if it is satisfied that such person had, in the course of the proceedings, not  complied with the condition on which the immunity was granted or had given false evidence, and  thereupon such person may be tried for the offence with respect to which the immunity was granted  or for any other offence of which he appears to have been guilty in connection with the  contravention and shall also become liable to the imposition of any penalty under this Act to which  such person would have been liable, had not such immunity been granted.]

156[Contravention by companies;]

24. (1) Where 157[a contravention of any of the provisions of this Act or any rule, regulation,  direction or order made thereunder] has been committed by a company, every person who, at the time when the 158[contravention] was committed, was in charge of, and was responsible to, the  company for the conduct of the business of the company, as well as the company, shall be deemed  to be guilty of the 159[contravention], and shall be liable to be proceeded against and punished  accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any  punishment provided in this Act, if he proves that the 160[contravention] was committed without  his knowledge or that he exercised all due diligence to prevent the commission of such  161[contravention].

(2) Notwithstanding anything contained in sub-section (1), where 162[ a contravention of any of  the provisions of this Act or any rule, regulation, direction or order made thereunder] has been  committed by a company and it is proved that the 163[contravention] has been committed with the  consent or connivance of, or is attributable to any gross negligence on the part of any director,  manager, secretary or other officer of the company, such director, manager, secretary or other  officer of the company, shall also be deemed to be guilty of that 164[contravention] and shall be  liable to be proceeded against and punished accordingly.

 155 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 11, w.r.e.f. 12-10-2004. 156 Substituted for the words "Offences by companies." by the Finance Act, 2018 w.e.f. 08-03-2019. 157 Substituted for the words "an offence" by the Finance Act, 2018 w.e.f. 08-03-2019.

158 Substituted for the words "offence" by the Finance Act, 2018 w.e.f. 08-03-2019.

159 Substituted for the words " offence" by the Finance Act, 2018 w.e.f. 08-03-2019.

160 Substituted for the words " offence" by the Finance Act, 2018 w.e.f. 08-03-2019.

161 Substituted for the words " offence" by the Finance Act, 2018 w.e.f. 08-03-2019.

162 Substituted for the words " an offence under this Act" by the Finance Act, 2018 w.e.f. 08-03-2019. 163 Substituted for the words " offence" by the Finance Act, 2018 w.e.f. 08-03-2019.

164 Substituted for the words " offence" by the Finance Act, 2018 w.e.f. 08-03-2019.

Explanation.—For the purpose of this section,—

(a) “company” means any body corporate and includes a firm or other association of individuals,  and

165[(b) “director”, in relation to -

(i) a firm, means a partner in the firm;

(ii) any association of persons or a body of individuals, means any member controlling  the affairs thereof.]

166[(3) The provisions of this section shall be in addition to, and not in derogation of, the provisions  of section 22A.]

Certain offences to be cognizable.

25. Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898)167,  any offence punishable under 168[***] section 23 shall be deemed to be a cognizable offence within  the meaning of that Code.

169 [Cognizance of offences by courts.

26. (1) No court shall take cognizance of any offence punishable under this Act or any rules or  regulations or bye-laws made thereunder, save on a complaint made by the Central Government  or State Government or the Securities and Exchange Board of India or a recognised stock exchange  or by any person.

170[(2)********]

171[Establishment of Special Courts.

26A. (1) The Central Government may, for the purpose of providing speedy trial of offences under  this Act, by notification, establish or designate as many Special Courts as may be necessary.

(2) A Special Court shall consist of a single judge who shall be appointed by the Central  Government with the concurrence of the Chief Justice of the High Court within whose jurisdiction  the judge to be appointed is working.  

(3) A person shall not be qualified for appointment as a judge of a Special Court unless he is,  immediately before such appointment, holding the office of a Sessions Judge or an Additional  Sessions Judge, as the case may be.  

 165 Substituted by the Securities Laws (Amendment) Act, 1999, Sec 7, w.e.f. 22-2-2000. Prior to its substitution, sub clause (b) read as under:  ‘(b) “director”, in relation to a firm, means a partner in the firm'

166 Inserted by The Securities Contracts (Regulation) Amendment Act, 1985 (Act No. 40 of 1985), Sec 3, w.e.f. 17- 01-1986.

167 See now the Code of Criminal Procedure, 1973 (2 of 1974)

168 Words “sub- section (1) of” omitted by the Securities Laws (Amendment) Act, 2004, w.e.f. 12-10-2004. 169 Substituted by the Securities Laws (Amendment) Act, 2004, Sec 13, w.r.e.f. 12-10-2004. Prior to its substitution  section 26 read as under :—

“26 Jurisdiction. to try offences under this Act.—No court inferior to that of a presidency magistrate or a magistrate  of the first class shall take cognizance of or try any offence punishable under this Act. “ 170 Omitted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013. Prior to omission, Sub-section (2)  read as under:  

“No court inferior to that of a Court of Session shall try any offence punishable under this Act.” 171 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f. 18-07-2013.

Offences triable by Special Courts.

26B. Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences  under this Act committed prior to the date of commencement of the Securities Laws (Amendment)  Act, 2014 or on or after the date of such commencement, shall be taken cognizance of and tried  by the Special Court established for the area in which the offence is committed or where there are  more Special Courts than one for such area, by such one of them as may be specified in this behalf  by the High Court concerned.

Appeal and Revision.

26C. The High Court may exercise, so far as may be applicable, all the powers conferred by  Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 on a High Court, as if a Special  Court within the local limits of the jurisdiction of the High Court were a Court of Session trying  cases within the local limits of the jurisdiction of the High Court.

Application of Code to proceedings before Special Court.

26D. (1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure,  1973 shall apply to the proceedings before a Special Court and for the purposes of the said  provisions, the Special Court shall be deemed to be a Court of Session and the person conducting  prosecution before a Special Court shall be deemed to be a Public Prosecutor within the meaning  of clause (u) of section 2 of the Code of Criminal Procedure, 1973.

(2) The person conducting prosecution referred to in sub-section (1) should have been in practice  as an Advocate for not less than seven years or should have held a post, for a period of not less  than seven years, under the Union or a State, requiring special knowledge of law.

Transitional provisions.

26E. Any offence committed under this Act, which is triable by a Special Court shall, until a  Special Court is established, be taken cognizance of and tried by a Court of Session exercising  jurisdiction over the area, notwithstanding anything contained in the Code of Criminal Procedure,  1973:

Provided that nothing contained in this section shall affect the powers of the High Court under  section 407 of the Code to transfer any case or class of cases taken cognizance by a Court of  Session under this section.]

MISCELLANEOUS

Title to dividends.

27. (1) It shall be lawful for the holder of any security whose name appears on the books of the  company issuing the said security to receive and retain any dividend declared by the company in  respect thereof for any year, notwithstanding that the said security has already been transferred by  him for consideration, unless the transferee who claims the dividend from the transferor has lodged  the security and all other documents relating to the transfer which may be required by the company  with the company for being registered in his name within fifteen days of the date on which the  dividend became due.

Explanation.—The period specified in this section shall be extended—

(i) in case of death of the transferee, by the actual period taken by his legal representative to

establish his claim to the dividend;

(ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the  transferee, by the actual period taken for the replacement thereof; and

(iii) in case of delay in the lodging of any security and other documents relating to the transfer  due to causes connected with the post, by the actual period of the delay.

(2) Nothing contained in sub-section (1) shall affect—

(a) the right of a company to pay any dividend which has become due to any person whose name  is for the time being registered in the books of the company as the holder of the security in  respect of which the dividend has become due; or

(b) the right of the transferee of any security to enforce against the transferor or any other person  his rights, if any, in relation to the transfer in any case where the company has refused to  register the transfer of the security in the name of the transferee.

172[Right to receive income from collective investment scheme.

27A. (1) It shall be lawful for the holder of any securities, being units or other instruments issued  by the collective investment scheme, whose name appears on the books of the collective  investment scheme issuing the said security to receive and retain any income in respect of units or  other instruments issued by the collective investment scheme declared by the collective investment  scheme in respect thereof for any year, notwithstanding that the said security, being units or other  instruments issued by the collective investment scheme, has already been transferred by him for  consideration, unless the transferee who claims the income in respect of units or other instruments  issued by the collective investment scheme from the transfer or has lodged the security and all  other documents relating to the transfer which may be required by the collective investment  scheme with the collective investment scheme for being registered in his name within fifteen days  of the date on which the income in respect of units or other instruments issued by the collective  investment scheme became due.

Explanation.—The period specified in this section shall be extended—

(i) in case of death of the transferee, by the actual period taken by his legal representative to  establish his claim to the income in respect of units or other instrument issued by the  collective investment scheme;

(ii) in case of loss of the transfer deed by theft or any other cause beyond the control of the  transferee, by the actual period taken for the replacement thereof; and

(iii) in case of delay in the lodging of any security, being units or other instruments issued by the  collective investment scheme, and other documents relating to the transfer due to causes  connected with the post, by the actual period of the delay.

(2) Nothing contained in sub-section (1) shall affect—

(a) the right of a collective investment scheme to pay any income from units or other instruments  issued by the collective investment scheme which has become due to any person whose  name is for the time being registered in the books of the collective investment scheme as  the holder of the security being units or other instruments issued by the collective investment  scheme in respect of which the income in respect of units or other instruments issued by the  collective scheme has become due; or

(b) the right of transferee of any security, being units or other instruments issued by the  

172 Inserted by the Securities Laws (Amendment) Act, 1999, Sec 8, w.e.f. 22-2-2000. Earlier clause (d) was omitted  by the Securities Laws (Amendment) Act, 1995, w.e.f. 25-01-1995.

collective investment scheme, to enforce against the transferor or any other person his rights,  if any, in relation to the transfer in any case where the company has refused to register the  transfer of the security being units or other instruments issued by the collective investment  scheme in the name of the transferee.]

173[Right to receive income from mutual fund.

27B. (1) It shall be lawful for the holder of any securities, being units or other instruments issued  by any mutual fund, whose name appears on the books of the mutual fund issuing the said security  to receive and retain any income in respect of units or other instruments issued by the mutual fund  declared by the mutual fund in respect thereof for any year, notwithstanding that the said security,  being units or other instruments issued by the mutual fund, has already been transferred by him  for consideration, unless the transferee who claims the income in respect of units or other  instruments issued by the mutual fund from the transferor has lodged the security and all other  documents relating to the transfer which may be required by the mutual fund with the mutual fund  for being registered in his name within fifteen days of the date on which the income in respect of  units or other instruments issued by the mutual fund became due.

Explanation.—The period specified in this section shall be extended—

(i) in case of death of the transferee, by the actual period taken by his legal representative to  establish his claim to the income in respect of units or other instrument issued by the mutual  fund;

(ii) in case of loss of the transfer deed by theft or any other cause beyond the control of  transferee, by the actual period taken for the replacement thereof; and

(iii) in case of delay in the lodging of any security, being units or other instruments issued by the  mutual fund, and other documents relating to the transfer due to causes connected with the  post, by the actual period of the delay.

(2) Nothing contained in sub-section (1) shall affect—

(a) the right of a mutual fund to pay any income from units or other instruments issued by the  mutual fund which has become due to any person, whose name is for the time being  registered in the books of the mutual fund as the holder of the security being units or other  instruments issued by the mutual fund in respect of which the income in respect of units or  other instruments issued by the mutual fund has become due; or

(b) the right of transferee of any security, being units or other instruments issued by the mutual  fund, to enforce against the transferor or any other person, his rights, if any, in relation to  the transfer in any case where the mutual fund has refused to register the transfer of the  security being units or other instruments issued by the mutual fund in the name of the  transferee.]

174[Act not to apply in certain cases.

28. (1) The provisions of this Act shall not apply to—

(a) the Government, the Reserve Bank of India, any local authority or any corporation set up by  a special law or any person who has effected any transaction with or through the agency of  any such authority as is referred to in this clause;

 173 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 14, w.r.e.f. 12-10-2004. 174 Substituted by Securities Contracts (Regulation) Amendment Act, 1959 (Act No. 49 of 1959), Sec 3, w.e.f. 08-12- 1959.

(b) any convertible bond or share warrant or any option or right in relation thereto, in so far as  it entitles the person in whose favour any of the foregoing has been issued to obtain at his  option from the company or other body corporate, issuing the same or from any of its  shareholders or duly appointed agents’ shares of the company or other body corporate,  whether by conversion of the bond or warrant or otherwise, on the basis of the price agreed  upon when the same was issued.

(2) Without prejudice to the provisions contained in sub-section (1), if the Central Government175 is satisfied that in the interests of trade and commerce or the economic development of the country  it is necessary or expedient so to do, it may, by notification in the Official Gazette, specify any  class of contracts as contracts to which this Act or any provision contained therein shall not apply,  and also the conditions, limitations or restrictions, if any, subject to which it shall not so apply.]

Protection of action taken in good faith.

29. No suit, prosecution or other legal proceeding whatsoever shall lie in any court against the  governing body or any member, office bearer or servant of any recognised stock exchange or  against any person or persons appointed under sub-section (1) of section 11 for anything which is  in good faith done or intended to be done in pursuance of this Act or of any rules or bye-laws made  thereunder.

176[Power to delegate.

29A. The Central Government may, by order published in the Official Gazette, direct that the  powers (except the power under section 30) exercisable by it under any provision of this Act shall,  in relation to such matters and subject to such conditions, if any, as may be specified in the order,  be exercisable also by the Securities and Exchange Board of India or the Reserve Bank of India  constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934).]

177[Powers of Board not to apply to International Financial Services Centre.

29B. Notwithstanding anything contained in any other law for the time being in force,  the powers exercisable by the Board under this Act,—

(a) shall not extend to an International Financial Services Centre set up under sub section (1) of section 18 of the Special Economic Zones Act, 2005;

(b) shall be exercisable by the International Financial Services Centres Authority  established under sub-section (1) of section 4 of the International Financial Services  Centres Authority Act, 2019,

in so far as regulation of financial products, financial services and financial institutions that are permitted in the International Financial Services Centres are concerned.]

175 Powers are exercisable by SEBI also vide S. O. 672 (E), Dated 13-09-1994, published in the Gazette of India, Extra.,  Pt. II, Section 3 (ii), Dated 13-09-1994.

176 Inserted by Securities and Exchange Board of India Act, 1992, Sec 33 and Schedule, Pt II, w.r.e.f. 30-01-1992 and  Substituted by the Securities Laws (Amendment) Act, 1999, Sec 9, w.e.f. 22-02-2000. Prior to its substitution, section  29A read as under:

“29APower to delegate.—The Central Government may, by order published in the Official Gazette, direct that the  powers exercisable by it under any provision of this Act shall, in relation to such matters and subject to such  conditions, if any, as may be specified in the order, be exercisable also by the Securities and Exchange Board of  India.”

177 Inserted by the International Financial Services Centers Authority Act, 2019, w.e.f. 01-10-2020.

Power to make rules.

30. (1) The Central Government may, by notification in the Official Gazette, make rules for the  purpose of carrying into effect the objects of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may  provide for,—

(a) the manner in which applications may be made, the particulars which they should contain  and the levy of a fee in respect of such applications;

(b) the manner in which any inquiry for the purpose of recognising any stock exchange may be  made, the conditions which may be imposed for the grant of such recognition, including  conditions as to the admission of members if the stock exchange concerned is to be the only  recognised stock exchange in the area; and the form in which such recognition shall be  granted;

(c) the particulars which should be contained in the periodical returns and annual reports to be  furnished to the Central Government;

(d) the documents which should be maintained and preserved under section 6 and the periods  for which they should be preserved;

(e) the manner in which any inquiry by the governing body of a stock exchange shall be made  under section 6;

(f) the manner in which the bye-laws to be made or amended under this Act shall before being  so made or amended be published for criticism;

(g) the manner in which applications may be made by dealers in securities for licences under  section 17, the fee payable in respect thereof and the period of such licences, the conditions  subject to which licences may be granted, including conditions relating to the forms which  may be used in making contracts, the documents to be maintained by licensed dealers and  the furnishing of periodical information to such authority as may be specified and the  revocation of licences for breach of conditions;

178[(h) the requirements which shall be complied with—

(A) by public companies for the purpose of getting their securities listed on any stock  exchange;

(B) by collective investment scheme for the purpose of getting their units listed on any  stock exchange;] 179[***]

180[(ha) the grounds on which the securities of a company may be delisted from any recognised  stock exchange under sub-section (1) of section 21A;

(hb) the form in which an appeal may be filed before the Securities Appellate Tribunal under sub section (2) of section 21A and the fees payable in respect of such appeal;

(hc) the form in which an appeal may be filed before the Securities Appellate Tribunal under  

 178 Substituted by the Securities Laws (Amendment) Act, 1999, Sec 10, w.e.f. 22-02-2000. Prior to its substitution,  clause (h) read as under:

“(h) the requirements which shall be complied with by public companies for the purpose of getting their securities  listed on any stock exchange;”

179 The word "and" omitted by the Securities Contracts (Regulation) Amendment Act, 1985, Sec 4, w.e.f. 17-01-1986. 180 Substituted for clause (ha) by the Securities Laws (Amendment) Act, 2004, Sec 15, w.r.e.f. 12-10-2004. Earlier  clause (ha), as amended by the Securities Laws (Amendment) Act, 1999, read as under :— “(ha) the form in which an appeal may be filed before the Securities Appellate Tribunal under section 22A  and the fees payable in respect of such appeal; and”

section 22A and the fees payable in respect of such appeal;

(hd) the manner of inquiry under sub-section (1) of section 23-I;

(he) the form in which an appeal may be filed before the Securities Appellate Tribunal under  section 23L and the fees payable in respect of such appeal;]

(i) any other matter which is to be or may be prescribed.

181[(3) Every rule made under this Act shall be laid, as soon as may be after it is made, before each  House of Parliament, while it is in session, for a total period of thirty days which may be  comprised in one session or in two or more successive sessions, and if, before the expiry of  the session immediately following the session or the successive sessions aforesaid, both  Houses agree in making any modification in the rule or both Houses agree that the rule should  not be made, the rule shall thereafter have effect only in such modified form or be of no effect,  as the case may be; so, however, that any such modification or annulment shall be without  prejudice to the validity of anything previously done under that rule.]

182[Special Provisions related to commodity derivatives.

30A. (1) Nothing contained in this Act shall apply to non-transferable specific delivery contracts:

Provided that no person shall organise or assist in organising or be a member of any  association in any area to which the provisions of section 13 have been made applicable (other  than a stock exchange) which provides facilities for the performance of any non-transferable  specific delivery contract by any party thereto without having to make or receive actual  delivery to or from the other party to the contract or to or from any other party named in the  contract.

(2) Where in respect of any area, the provisions of section 13 have been made applicable in  relation to commodity derivatives for the sale or purchase of any goods or class of goods, the  Central Government may, by notification, declare that in the said area or any part thereof as  may be specified in the notification all or any of the provisions of this Act shall not apply to  transferable specific delivery contracts for the sale or purchase of the said goods or class of  goods either generally, or to any class of such contracts in particular.  

(3) Notwithstanding anything contained in sub-section (1), if the Central Government is of  the opinion that in the interest of the trade or in the public interest it is expedient to regulate  and control non-transferable specific delivery contracts in any area, it may, by notification in  the Official Gazette, declare that all or any of the provisions of this Act shall apply to such  class or classes of non-transferable specific delivery contracts in such area in respect of such  goods or class of goods as may be specified in the notification, and may also specify the  manner in which and the extent to which all or any of the said provisions shall so apply. ]

 181 Substituted by the Securities Laws (Amendment) Act, 2004, Sec 15, w.r.e.f. 12-10-2004. Prior to its substitution,  sub-section (3), as amended by the Securities Laws (Amendment) Act, 1995, w.e.f. 25-01-1995, read as under: “(3) Every rule made under this section shall, as soon as may be, after its publication in the Official Gazette, be laid  before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in  one session or in two or more successive sessions, and if, before the expiry of the session immediately following the  session or the successive session aforesaid, both Houses agree in making any modification in the rule or both Houses  agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no  effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the  validity of anything previously done under that rule.”

182 Inserted by Part II of Chapter VIII of the Finance Act 2015, w.e.f. 28.09.2015 vide Gazette Notification F. No.  1/9/SM/2015, Extraordinary, Pt. II, Sec. 3, Sub-section (ii) dtd 28.08.2015.

183[Special provisions related to pooled investment vehicle.

30B. (1) Notwithstanding anything contained in the Indian Trust Act, 1882 or in any other law  for the time being in force or in any judgment, decree or order of any Court, Tribunal or any  other authority, a pooled investment vehicle, whether constituted as a trust or otherwise, and  registered with the Securities and Exchange Board of India shall be eligible to borrow and  issue debt securities in such manner and to such extent as may be specified under the  regulations made by Securities and Exchange Board of India in this behalf.

(2) Every pooled investment vehicle referred to in subsection (1) shall, subject to the  provisions of the trust deed, be permitted to provide security interest to lenders in terms of the  facility documents entered into by such pooled investment vehicle.

(3) Where any pooled investment vehicle referred to in sub-section (1) defaults in repayment  of principal amount or payment of interest or any such amount due to the lender, the lender  shall recover the defaulted amount and enforce security interest, if any, against the trust assets,  by initiating proceedings against the trustee acting on behalf of such pooled investment vehicle  in accordance with the terms and conditions specified in the facility documents:

Provided that on initiation of the proceedings against the trust assets, the trustee shall not  be personally liable and his assets shall not be utilised towards recovery of such debt.

(4) The trust assets, which remain after recovery of defaulted amount, shall be remitted to the  unit holders on proportionate basis.]

184[Power of Securities and Exchange Board of India to make regulations. 31. (1) Without prejudice to the provisions contained in section 30 of the Securities and Exchange  Board of India Act, 1992 (15 of 1992), the Securities and Exchange Board of India may, by  notification in the Official Gazette, make regulations consistent with the provisions of this Act and  the rules made thereunder to carry out the purposes of this Act.

185[(2) In particular, and without prejudice to the generality of the foregoing power, such  regulations may provide for all or any of the following matters, namely:—

(a) the manner, in which at least fifty-one per cent of equity share capital of a recognised stock  exchange is held within twelve months from the date of publication of the order under sub section (7) of section 4B by the public other than the shareholders having trading rights  under sub-section (8) of that section;  

(b) the eligibility criteria and other requirements under section 17A.]

186[(c) the terms determined by the Board for settlement of proceedings under subsection (2) of  section 23JA;

 183 Inserted by the Finance Act, 2021 (13 of 2021) w.e.f. April 1, 2021.

184 Inserted by the Securities Laws (Amendment) Act, 2004, Sec 16, w.r.e.f. 12-10-2004. Earlier it was repealed by  the Repealing and Amending Act, 1960, Sec 2 and First Sch. w.e.f. 28-12-1960.

185 Substituted by the Securities Contracts (Regulation) Amendment Act, 2007, Sec 5, w.e.f. 28-05-2007. Prior to  substitution it read as under:

“(2) In particular and without prejudice to the generality of the foregoing power, such regulations may provide for  the manner in which at least fifty-one per cent of equity share capital of a recognised stock exchange is held within  twelve months from the date of publication of the order under sub-section (7) of section 4B by the public other than  the shareholders having trading rights under sub-section (8) of that section.”

186 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f 18-07-2013.

(d) any other matter which is required to be, or may be, specified by regulations or in respect of  which provision is to be made by regulations.]

(3) Every regulation made under this Act shall be laid, as soon as may be after it is made, before  each House of Parliament, while it is in session for a total period of thirty days which may be  comprised in one session or in two or more successive sessions, and if, before the expiry of the  session immediately following the session or the successive sessions aforesaid, both Houses agree  in making any modification in the regulation or both Houses agree that the regulation should not  be made, the regulation shall thereafter have effect only in such modified form or be of no effect,  as the case may be; so, however, that any such modification or annulment shall be without  prejudice to the validity of anything previously done under that regulation.]

187[Validation of certain acts.

32. Any act or thing done or purporting to have been done under the principal Act, in respect of  settlement of administrative and civil proceedings, shall, for all purposes, be deemed to be valid  and effective as if the amendments made to the principal Act had been in force at all material  times.]

******

187 Inserted by the Securities Laws (Amendment) Act, 2014, w.r.e.f 18-07-2013.