Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018

Oct 09, 2018 | by Avantis RegTech Legal Research Team

Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 to regulate recognition, ownership and governance in stock exchanges and clearing corporations and matters connected therewith or incidental thereto.

A “stock exchange” means

         i.            any  body  of  individuals,  whether  incorporated  or  not,  constituted  before corporatisation and demutualisation under sections 4A and 4B, or

       ii.            a body corporate incorporated under the Companies Act, 1956 whether  under  a  scheme   of  corporatisation  and  demutualisationor otherwise,

for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities.

A "clearing corporation" means an entity that is established to undertake the activity of clearing and settlement of trades in securities or other instruments or products that are dealt with or traded on a recognized stock exchange and includes a clearing house.

On  and  from  the  commencement  of  these  regulations,  the  Securities  Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 and the following circulars, shall stand rescinded:

(a)    Circular  No.  CIR/MRD/DSA/33/2012,  dated  December  13,  2012 -Procedural norms  on  Recognitions,  Ownership  and  Governance  for  Stock  Exchanges  and Clearing Corporations;

(b)   Circular   No.   SEBI/HO/MRD/DSA/CIR/P/2016/30   dated   January   22,   2016 -Amendment to SEBI Circular CIR/MRD/DSA/33/2012 dated December 13, 2012 pursuant to amendment in Regulation 2(1)(b) of SECC Regulations, 2012

The Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, have been divided into the following Chapters, they are:

·         Chapter I specifies short title and commencement and Definitions.

·         Chapter II specifies the procedure to be followed by the applicant for seeking recognition as a stock exchange and clearing corporations.

·         Chapter III specifies the requirements for net worth of stock exchange and clearing corporations.

·         Chapter IV specifies the general conditions and eligibility criteria for obtaining ownership of stock exchange and clearing corporations.

·         Chapter V specifies the terms and conditions of governance of Depository i.e. Composition, Appointment, Code of conduct, Compensation and tenure, Segregation of regulatory departments, constitution of statutory committee and Disclosure and corporate governance norms.

·         Chapter VI specifies the general obligations to be followed by the Stock exchange and Clearing Corporations as specified by the SEBI.

·         Chapter VII specifies the conditions to be adhere by recognized stock exchange for listing of Securities on any recognized stock exchange, other than itself.

·         Chapter VIII specifies the power of the SEBI related to the Regulations under the head ‘Inspection, Enquiries and Enforcement’.

·         Chapter IX specifies the power of SEBI to remove difficulties in the interpretation and application of the provisions of the regulations, power to specify procedure and issue clarifications and to repeal and savings.

[No. SEBI/LAD-NRO/GN/2018/41]



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