The Securities Contracts (Regulation) Act, 1956
The Securities Contracts (Regulation) Act, 1956, Act No. 42 of 1956, was enacted by Parliament and dated 4 September 1956. It regulates the business of dealing in securities to prevent undesirable transactions, including through recognition and oversight of stock exchanges, regulation of securities contracts, listing appeals and penalties. The supplied text is an amended version as on 16 December 2025.
What the Act governs
The Securities Contracts (Regulation) Act, 1956 applies throughout India. It regulates contracts for the purchase or sale of securities and establishes a framework for recognised stock exchanges, securities trading, listing disputes, enforcement and appeals.
The Act defines securities broadly. The definition includes shares, stocks, bonds, debentures and similar marketable securities of an incorporated company, pooled investment vehicle or other body corporate. It also addresses derivatives, commodity derivatives, government securities, options in securities and pooled investment vehicles.
Who may be affected
The Securities Contracts (Regulation) Act, 1956 may affect:
- Recognised stock exchanges and their members.
- Companies seeking to list securities on a stock exchange.
- Dealers and other persons entering into securities contracts.
- Investors in shares, bonds, derivatives, mutual funds, collective investment schemes and other pooled investment vehicles.
- Persons responsible for client securities, client money, investor grievances, returns or listing compliance.
The Act concerns securities and securities markets. The supplied text does not establish rules for buying, selling, registering or holding land in Tamil Nadu.
Main provisions
The Securities Contracts (Regulation) Act, 1956 provides for:
- Applications for recognition of stock exchanges, grant or withdrawal of recognition, and annual reports.
- Corporatisation and demutualisation of recognised stock exchanges.
- Rules and bye-laws for recognised stock exchanges.
- Clearing corporations and additional trading floors.
- Central Government powers to call for returns, direct inquiries, supersede a governing body or suspend exchange business.
- Securities and Exchange Board of India powers to issue directions and make or amend stock exchange bye-laws.
- Restrictions on securities contracts in notified areas and prohibition of unrecognised stock exchanges.
- Public issue and listing requirements for specified securities.
- Appeals concerning refusal by a stock exchange to list securities of a public company.
Penalties, proceedings and appeals
The Securities Contracts (Regulation) Act, 1956 provides penalties for failures involving information, returns, client agreements, investor grievances, segregation of client assets, listing conditions and business conduct. It also covers adjudication, settlement, recovery, offences by companies, Special Courts and appeals to the Securities Appellate Tribunal or Supreme Court in specified matters.
The supplied version records amendments made by several Acts from 1959 through 2021 and presents the text as on 16 December 2025.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Does this Act regulate the purchase or registration of land in Tamil Nadu?
The supplied text regulates securities contracts, stock exchanges, listing and related enforcement. It does not set out rules for purchasing, registering or holding land.
What is a recognised stock exchange under this Act?
A recognised stock exchange is a stock exchange that is currently recognised by the Central Government under the Act.
Does the Act cover derivatives and pooled investment vehicles?
Yes. The definitions include derivatives and pooled investment vehicles, including specified funds such as mutual funds, alternative investment funds, collective investment schemes and business trusts registered with the Securities and Exchange Board of India.
Can a company appeal if a stock exchange refuses to list its securities?
The Act provides rights of appeal against refusal by a stock exchange to list securities of a public company, including an appeal to the Securities Appellate Tribunal.
