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

While considering Kaveri Stock Exchange's application, which conditions may the Central Government prescribe under Section 4(2) for grant of recognition?

The Central Government may prescribe a condition for its representation on the exchange through nominated persons not exceeding three. Section 4(2)(iii) lists this, along with membership qualifications, contract rules and audit of members' accounts.

  1. AFixing the price at which listed securities must trade daily
  2. BRepresentation of the Central Government on the exchange by not more than three nominated personsCorrect
  3. CCompulsory merger with the nearest stock exchange
  4. DProhibition on admitting any corporate member

Explanation

Section 4(2)(iii) permits conditions on Central Government representation on each exchange by persons not exceeding three. The other options are not among the listed conditions.

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