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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Legal and Regulatory Environment

Under the securities law framework for Indian derivatives markets, which of the following is the primary statute that governs the regulation of contracts in securities, including derivatives, and recognises derivatives as 'securities'?

The Securities Contracts (Regulation) Act, 1956 is the main law governing derivatives in India because it includes derivatives within the definition of securities and regulates their trading on recognised stock exchanges, unlike the Companies Act, Contract Act or Banking Regulation Act.

  1. ASecurities Contracts (Regulation) Act, 1956Correct
  2. BCompanies Act, 2013
  3. CIndian Contract Act, 1872
  4. DBanking Regulation Act, 1949

Explanation

The Securities Contracts (Regulation) Act, 1956 defines 'securities' to include derivatives and regulates their trading on recognised stock exchanges. The Companies Act, Contract Act and Banking Regulation Act do not primarily govern derivative contracts in securities.

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