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

The Bombay-based recognised stock exchange Meridian Exchange wants to frame bye-laws for the regulation and control of contracts. Under section 9 of the SCRA, what must it do before such bye-laws are made?

A recognised stock exchange must obtain the previous approval of the Securities and Exchange Board of India before making bye-laws for the regulation and control of contracts under section 9(1). The Central Government was replaced by SEBI in this role in 1992.

  1. AObtain the previous approval of the Securities and Exchange Board of IndiaCorrect
  2. BObtain the previous approval of the Central Government
  3. CObtain the consent of all its listed companies
  4. DFile a notice with the Registrar of Companies

Explanation

Section 9(1) allows a recognised stock exchange to make bye-laws subject to the previous approval of SEBI. The words 'Central Government' were substituted by SEBI in 1992, so the Central Government option is outdated. Listed companies and the Registrar of Companies have no role in this section.

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