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

A student states that under section 9 of the Securities Contracts (Regulation) Act, 1956, a recognised stock exchange's bye-laws may deal with the listing of securities. Which matter relating to listing can the bye-laws validly cover?

The bye-laws may provide for suspension or withdrawal of securities from dealings. Section 9 empowers them to regulate listing, inclusion of securities for dealings, and suspension or withdrawal of securities, along with suspension or prohibition of trading in specified securities, but not issue price, auditors or dividends.

  1. ASuspension or withdrawal of securities from dealingsCorrect
  2. BFixing the issue price of a company's public offer
  3. CAppointment of the company's statutory auditors
  4. DDetermination of the company's dividend rate

Explanation

Section 9(2)(m) lets bye-laws provide for listing of securities, inclusion of a security for dealings, and the suspension or withdrawal of such securities and suspension or prohibition of trading in specified securities. Issue price, auditors and dividends are company matters not listed there.

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