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CS Executive · Capital Market and Securities Laws · Basics of Capital Market

A company wants to know which legislation governs the recognition and regulation of stock exchanges, including the power to grant recognition and to regulate listing and trading of securities. Which Act is this?

The Securities Contracts (Regulation) Act, 1956 governs recognition and regulation of stock exchanges and dealings in securities, including listing and trading. Banking, foreign exchange and general contract statutes serve different purposes and do not provide the framework for recognising stock exchanges.

  1. ASecurities Contracts (Regulation) Act, 1956Correct
  2. BBanking Regulation Act, 1949
  3. CForeign Exchange Management Act, 1999
  4. DIndian Contract Act, 1872

Explanation

The Securities Contracts (Regulation) Act, 1956 regulates dealings in securities and provides for recognition and regulation of stock exchanges. The Banking Regulation Act deals with banks and FEMA with foreign exchange, so they do not govern exchange recognition.

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