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CS Executive · Capital Market and Securities Laws · Securities Contracts (Regulation) Act, 1956

A clearing corporation has received SEBI approval for taking over clearing functions from a recognised stock exchange. Which statement about the application of the Act's other provisions to it is correct?

Sections 4, 5, 6, 7, 8, 9, 10, 11 and 12 apply, as far as may be, to a clearing corporation as they apply to a recognised stock exchange. So it is not outside those provisions, and they are not restricted to bye-law powers alone.

  1. ASections 4 to 12 apply to it, as far as may be, as they apply to a recognised stock exchangeCorrect
  2. BNo other provisions apply because it is not a stock exchange
  3. COnly section 9 on bye-laws applies, and no other section
  4. DSections 1 to 3 apply, but sections 4 to 12 never apply

Explanation

Section 8A(4) provides that sections 4, 5, 6, 7, 8, 9, 10, 11 and 12 apply, as far as may be, to a clearing corporation as they apply to a recognised stock exchange. Limiting this to section 9 or excluding it entirely contradicts that sub-section.

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