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

Meera, a broker in Pune, sets up a private trading platform where members enter into contracts in securities among themselves. The platform is not a recognised stock exchange and she has no Central Government permission. Which statement reflects the SCRA, 1956 position?

Meera is prohibited. Section 19(1) says no person shall, without Central Government permission, organise or assist in organising, or be a member of, a stock exchange other than a recognised stock exchange for entering into or performing contracts in securities. Member numbers or settlement timing do not change this.

  1. AShe is permitted, as long as the platform has fewer than 100 members
  2. BShe is permitted if contracts are settled within the same day
  3. CShe is prohibited from organising or assisting in organising such an exchange without Central Government permissionCorrect
  4. DShe needs only SEBI registration as a broker to run it

Explanation

Section 19(1) bars any person, except with Central Government permission, from organising or assisting in organising, or being a member of, a stock exchange other than a recognised one for contracts in securities. Member count, same-day settlement and broker registration are not exceptions in the text.

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