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Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
Securities contract act
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Securities contract act

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  • 1. Pavithra Sachin Maria Vidhayaarshini Philip
  • 2. INTRODUCTION  The securities contracts(regulation)Act ,1956,is an Act to present undesirable in securities by regulating the business of dealing therein by providing for certain other matters connected therewith.  It was enacted by parliament in the seventh year of the Republic of India(1956) & extends to the whole of India .
  • 3. DEFINITIONS OF CERTAIN IMPORTANT TERMS In this act,  Contract  Derivative  Government security  Member  Prescribed  Recognized stock exchange  Rules  Securities appellate tribunal  Securities  Stock exchange
  • 4. WHAT IT DEALS WITH ? The [SC(R)A]- Securities contracts (Regulation) Act deals with :  Stock exchanges ,through a process of recognition & continued supervision.  Contracts in securities  Listing of securities on stock exchanges.
  • 5. WHY DID IT COME INTO EXISTENCE ?  Stock market plays a significant role in development of the economy.  Stock market facilitates mobilization of funds from small savings of investors & channelizes these resources into various development needs of various sectors of the economy.  Stock market also provides mechanism for trading of securities thus ensuring liquidity to the investment of investors.
  • 6.  Thus ,stock market facilitates transactions in securities  In order to prevent undesirable transactions in securities ,promote healthy stock market ,the securities contracts(Regulation )Act 1956 enacted by parliament vide act no2  This applying to whole of India
  • 7. WHO IS RESPONSIBLE & THE HISTORY BEHIND IT ?  Before 1800 ,Indian securities transactions were loans from the East Indian company  1830-Bank securities traded in Bombay  Companies act of 1850-Limited liability & Joint stock company  1861 –American civil war –cotton needs , England approached India  Immense fund flow-share mania of 1860-65
  • 8.  End of civil war ,price of cotton fell , Black Friday ,July 1 ,1865,share mania came to a hall  But still no of brokers in Bombay increased  1875-Brokers association  1877-native stock & share Brokers Association ,precursor to Bombay stock exchange  Increase in economic activity due to first world war  1918-19-Several brokers manipulated standard mill & Madhavji mill ,red to crash ,forward trading halted .
  • 9.  1920’s market slump  Bombay legislative council-created committee to look into the Bombay exchange Activities , head- Sir Wilfred  Report stated frequent occurrence of self regulated in the market ,offenses & manipulations  1925-Another crash -> securities contracts control act [but no effective implementation]  1927-1937-5 serious crises on Bombay exchange
  • 10.  W.B.Morrison-enquiry committee was formed  Even with application of the committee’s recommendations ,It failed to stop malpractice  Another committee –headed by A.D.Gorwal(1951)  Securities contract (Regulation)act of 1956
  • 11. INIDAN REGULATORY FRAMEWORK SECURITIES ISSUANCE : REGULATORY FRAMSECURITIES ISSUANCE: REGULATORY FRAMEWORK DEPOSITORI ES ACT SCR ACT SEBI ACT COMPANIES ACT SEBI Rules, guidelines Stock exchanges Intermediarie s ISSUER
  • 12. AMENDMENTS  The scr act was enacted to form a healthy market in India.  It controls the securities ,geographical areas for trading ,licensing of stock exchanges ,constitution & governance of stock exchanges & listing agreements.  It restricts trading of securities that are not covered under its definition . There were several amendments to this act ,its introduction to further include interests of the investor.
  • 13.  Securities contracts (Regulation )Rules,1957  Securities contracts (Regulation)amendments rules,1996  Securities contracts (Regulation)(Appeal to securities appellate tribunal)Rules,2000  Securities contracts(regulation)amendments rules,2001  Securities contracts(regulation)amendments rules,2003
  • 14.  Securities law (amendment)act,2005  Securities contracts (regulation)amendments,2007  Securities contracts(regulation)(amendment)rules,2010  Securities contracts(regulation)(second amendment)rules,2010  Securities contracts(Regulation)(stock exchange & clearing corporations)regulations,2012.
  • 15. THE LATEST AMENDMENT  It was made in the year 2012.securities contracts(regulation )(stock exchanges & clearing corporation)Regulations,2012[Mumbai,20thJune 2012]
  • 16. IMPLICATIONS IN THE SOCIETY:  traditionally ,the stock exchanges in India were organizations formed generally on not-for profit & the trading members besides rendering various services were also owning ,controlling & managing the stock exchanges.  They were essentially not corporatized & working on mutual basis.  This type of system had its own merits & inherent limitations
  • 17.  however with the passage of time & events occurring at the various stock exchanges ,a thought was contemplated as why they should not be allowed to corporatized & work on demutualization basis.  The advantage of the new system is that the public interest of the private interest is regulated to the background  The primary implications is to stop malpractices.  After this Act ,to a certain extent investors started trusting the stock exchange.
  • 18.  There was less means of cheating & the government had control over it .  It reduced serious crises
  • 19. THANK YOU

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